As filed with the Securities and Exchange Commission on January 8, 2025.
Registration No. 333-281991
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 5
to
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PowerUp Acquisition Corp.*
(Exact name of registrant as specified in its charter)
Aspire Biopharma, Inc.**
(Exact name of co-registrant as specified in its charter)
| Cayman Islands* | | 6770 | | N/A |
(State or other jurisdiction of
incorporation or organization) | | (Primary Standard Industrial
Classification Code Number) | | (I.R.S. Employer
Identification Number) |
188 Grand Street, Unit #195
New York, NY 10013
(347) 313-8109
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Surendra Ajjarapu
Chief Executive Officer
188 Grand Street, Unit #195
New York, NY 10013
(347) 313-8109
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies of all communications, including communications sent to agent for service, should be sent to:
Kate L. Bechen Hallie D. Heath Dykema Gossett PLLC 111 E. Kilbourn Ave., Suite 1050 Milwaukee, WI 53202 (414) 488-7300 | | Arthur S. Marcus Chance P. Moore Sichenzia Ross Ference Carmel LLP 1185 Avenue of the Americas, 31st floor
New York, NY 10036
(212) 930-9700 |
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and after all conditions under the business combination agreement described in this proxy statement / prospectus to consummate the business combination are satisfied or waived.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | Large accelerated filer | ☐ | Accelerated Filer | ☐ |
| | | | | |
| | Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| | | | | |
| | | | Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-l(d) (Cross-Border Third-Party Tender Offer) ☐
| * | Prior to the consummation of the Business Combination described herein, the Registrant intends to effect a deregistration under Article 206 of the Cayman Islands Companies Act (as amended) and a domestication under Section 388 of the Delaware General Corporation Law, pursuant to which the Registrant’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. All securities being registered will be issued by the continuing entity following the PowerUp Domestication, which continuing entity following the PowerUp Domestication will be renamed “Aspire Biopharma Holdings, Inc.” |
| ** | For information regarding the Co-Registrant, see “Co-Registrant Table” on the following page. |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
CO-REGISTRANT TABLE
| Exact Name of Co-Registrant as Specified in its Charter(1)(2) | | State or Other Jurisdiction of Incorporation or Organization | | Primary Standard Industrial Classification Code Number | | I.R.S. Employer Identification Number |
| Aspire Biopharma, Inc. | | Puerto Rico | | 2834 | | 66-0991341 |
| (1) | The Co-Registrant has the following principal executive office: |
194 Candelaro Drive, #233, Humacao, Puerto Rico 00791
| (2) | The agent for service for the Co-Registrant is: |
National Registered Agents, Inc. 1209 Orange St., Wilmington, DE 19801
The information in the preliminary proxy statement/prospectus is not complete and may be changed. The registrant may not sell the securities described in the preliminary proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission is declared effective. The preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY — SUBJECT TO COMPLETION, DATED JANUARY 8, 2025
PROXY STATEMENT FOR
EXTRAORDINARY GENERAL MEETING OF
POWERUP ACQUISITION CORP.
(A CAYMAN ISLANDS EXEMPTED COMPANY)
PROSPECTUS FOR
46,515,144 SHARES OF COMMON STOCK,
14,375,000 SHARES OF COMMON STOCK UNDERLYING WARRANTS AND
14,375,000 WARRANTS
OF POWERUP ACQUISITION CORP.
(SUCH SECURITIES TO BE ISSUED AFTER ITS DOMESTICATION AS A CORPORATION INCORPORATED IN THE STATE OF DELAWARE, AND ITS RENAMING AS Aspire Biopharma Holdings, Inc. IN CONNECTION WITH THE POWERUP DOMESTICATION DESCRIBED HEREIN)
The board of directors of PowerUp Acquisition Corp., a Cayman Islands exempted company (“PowerUp”), has unanimously approved the transactions (collectively, the “Business Combination”) contemplated by that certain Agreement and Plan of Merger, dated August 26, 2024, as amended by an Amendment Agreement dated September 5, 2024 and a Second Amendment Agreement dated October 9, 2024 (as it may be further amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among PowerUp, PowerUp Merger Sub II, Inc., a Delaware corporation and wholly owned subsidiary of PowerUp (“Merger Sub”), SRIRAMA Associates, LLC, a Delaware limited liability company (the “Sponsor”), Stephen Quesenberry, in the capacity as the representative from and after the Effective Time for the Aspire stockholders as of immediately prior to the Effective Time (the “Seller Representative”), and Aspire Biopharma, Inc., a Puerto Rico corporation (“Aspire”), a copy of which is attached to this proxy statement/prospectus as Annex A, including the deregistration of PowerUp under Article 206 of the Cayman Islands Companies Act (as amended) and the domestication of PowerUp under Section 388 of the Delaware General Corporation Law, pursuant to which PowerUp’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware (the “PowerUp Domestication”) prior to the Closing (as defined in the accompanying proxy statement/prospectus). The PowerUp Board determined that the Business Combination, the PowerUp Domestication, and the related transactions are fair to and in the best interest of PowerUp’s shareholders, approved and adopted the Business Combination Agreement, the PowerUp Domestication, and the related transactions, and declared their advisability.
As described in the accompanying proxy statement/prospectus, PowerUp’s shareholders are being asked to consider and vote upon each of the PowerUp Domestication and the Business Combination, among other items. As used in the accompanying proxy statement/prospectus, “New Aspire” refers to PowerUp (which, in connection with the PowerUp Domestication, will change its name to “Aspire Biopharma Holdings, Inc.”) after giving effect to the PowerUp Domestication and Business Combination.
In connection with the PowerUp Domestication, prior to the Closing Date (as defined in the accompanying proxy statement/prospectus): (i) each issued and outstanding Class A ordinary share, par value $0.0001 per share (the “Class A ordinary shares”), of PowerUp will convert, on a one-for-one basis, into a duly authorized, validly issued, fully paid and nonassessable share of Class A common stock, par value $0.0001 per share, of New Aspire (the “New Aspire Class A Common Stock”); and (ii) each issued and outstanding whole warrant to purchase Class A ordinary shares of PowerUp will automatically represent the right to purchase one share of New Aspire Class A Common Stock, at an exercise price of $11.50 per share on the terms and conditions set forth in the Warrant Agreement, dated as of February 17, 2022, by and between PowerUp and Equiniti Trust Company, LLC (f/k/a American Stock Transfer & Trust Company), a New York limited purpose trust company, as warrant agent (in such capacity, the “Warrant Agent”, also referred to herein as the “Transfer Agent”) (the “Warrant Agreement”). Immediately following the PowerUp Domestication, (i) the New Aspire Class A Common Stock will be reclassified as common stock, par value $0.0001 per share (the “New Aspire Common Stock”); (ii) each issued and outstanding unit of PowerUp that has not been previously separated into the underlying Class A ordinary share and underlying one-half of one warrant upon the request of the holder thereof will be cancelled and will entitle the holder thereof to one share of New Aspire Common Stock and one-half of one public warrant, with a whole public warrant representing the right to acquire one share of New Aspire Common Stock at an exercise price of $11.50 per share on the terms and conditions set forth in the Warrant Agreement; (iii) the governing documents of PowerUp will be amended and restated and become the certificate of incorporation and the bylaws of New Aspire in the form attached to this proxy statement/prospectus as Annex C and Annex D, respectively; and (iv) the form of the certificate of incorporation and the bylaws will be appropriately adjusted to give effect to any amendments contemplated by the form of certificate of incorporation or the bylaws that are not adopted and approved by the PowerUp shareholders, other than the amendments to the PowerUp governing documents that are contemplated by the Organizational Documents Proposal, which is a condition to the Closing of the Business Combination. No fractional warrants will be issued upon the separation of units and only whole warrants will trade. Accordingly, unless you hold at least two units of PowerUp, you will not be able to receive or trade a warrant when the units are separated.
Also prior to the Closing Date, Aspire will deregister as a Puerto Rican entity and domesticate as a Delaware corporation (the “Aspire Domestication”) in accordance with Section 3746 of the Puerto Rico General Corporations Act (as amended) and Section 388 of the Delaware General Corporation Law. Pursuant to the Aspire Domestication, Aspire’s jurisdiction of incorporation will be changed from Puerto Rico to the State of Delaware. In connection with the Aspire Domestication, all issued and outstanding shares of Aspire’s pre-domestication voting common stock, Series A preferred stock, and any unconverted warrants will automatically convert, on a one-for-one basis, into shares of the post-domesticated entity’s common stock, Series A preferred stock, and warrants, respectively.
On the Closing Date, Merger Sub will merge with and into Aspire, with Aspire being the surviving company. After giving effect to the Business Combination, Aspire shall be a wholly owned subsidiary of New Aspire. In accordance with the terms and subject to the conditions of the Business Combination Agreement and the Proposed Charter (as defined in the accompanying proxy statement/prospectus), at Closing, the Aspire Stockholders (as defined in the accompanying proxy statement/prospectus) shall collectively be entitled to receive, in the aggregate, a number of shares of duly authorized, validly issued, fully paid and nonassessable shares of New Aspire Common Stock with an aggregate value equal to (a) $350 million less (b) the amount by which Aspire’s cash at Closing is less than the Minimum Cash Condition (but only in the event the Minimum Cash Condition is waived by PowerUp), if any, less (c) Aspire’s Indebtedness at Closing. For the purpose of negotiating the amount of merger consideration that the Aspire Stockholders would receive upon completion of the Business Combination, Aspire and PowerUp negotiated and agreed to a $350 million valuation of Aspire. The fairness opinion was delivered by a valuation advisory and consulting firm engaged by PowerUp. For further information about the valuation and how it was determined, see the sections entitled “Business Combination Proposal — Opinion of Financial Advisor to PowerUp” and “Notes to Unaudited Pro Forma Condensed Combined Financial Information.”
It is anticipated that, upon completion of the Business Combination and assuming that none of PowerUp’s outstanding public shares are redeemed in connection with the Business Combination, (i) the Aspire Stockholders (as defined in the accompanying proxy statement/prospectus) will own, collectively, approximately 75.2% of the outstanding New Aspire Common Stock, (ii) PowerUp’s public shareholders (as defined in the accompanying proxy statement/prospectus) will own, collectively, approximately 1.2% of the outstanding New Aspire Common Stock, and (iii) PowerUp’s Initial Shareholders (as defined in the accompanying proxy statement/prospectus) will own approximately 19.8% of the outstanding New Aspire Common Stock, in each case, assuming that none of PowerUp’s outstanding public shares are redeemed in connection with the Business Combination, or approximately 76.2%, 0%, and 20.0%, respectively, assuming that all of PowerUp’s outstanding public shares are redeemed in connection with the Business Combination. See the section entitled “Business Combination Proposal — Ownership of New Aspire” for more details. The parties anticipate needing to raise outside capital through debt or equity financing at, or in connection with, Closing, but the foregoing percentages do not assume successful completion of any such transactions. As of the date of this proxy statement/prospectus no substantive discussions regarding any additional financial arrangements have occurred and whether the parties will be able to identify and then execute upon an outside source of liquidity is not known.
This proxy statement/prospectus covers 46,515,144 shares of New Aspire Common Stock, 14,375,000 shares of New Aspire Common Stock underlying public warrants, and 14,375,000 public warrants to purchase New Aspire Common Stock. This proxy statement/prospectus covers the maximum number of shares of New Aspire Common Stock that may be issued to Aspire Stockholders under the Business Combination Agreement, the shares of New Aspire Common Stock that may be issued upon conversion of the Class A ordinary shares currently held by PowerUp’s public shareholders, and the maximum number of shares that may be issued to the Original Sponsor and the Sponsor (in its capacity as a shareholder of PowerUp, and also inclusive of up to 3,750,000 shares that may be issued to the Sponsor and certain investors as partial consideration for facilitating the extension of certain loans).
On May 18, 2023, PowerUp held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal to amend PowerUp’s Existing Governing Documents to extend the date by which PowerUp must consummate an initial business combination. In connection with the 2023 Extension Meeting, a total of 242 PowerUp shareholders elected to redeem an aggregate of 26,946,271 public shares representing approximately 93.7% of the then outstanding Class A ordinary shares. As a result, approximately $284 million (approximately $10.55 per public share) was removed from the Trust Account to pay such holders and PowerUp had approximately $20 million left in its Trust Account. Following the 2023 Extension Redemption there were 1,803,729 public shares remaining issued and outstanding.
On May 22, 2024, PowerUp held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal to amend PowerUp’s Existing Governing Documents to extend the date by which PowerUp must consummate an initial business combination. In connection with the 2024 Extension Meeting, a total of 84 PowerUp shareholders elected to redeem an aggregate of 1,226,085 public shares representing approximately 68.0% of the outstanding public shares. As a result, approximately $13.8 million (approximately $11.24 per public share) was removed from the Trust Account to pay such holders and PowerUp had approximately $6.5 million left in its Trust Account. Following the 2024 Extension Redemption there are 577,644 public shares remaining issued and outstanding.
As of the date of this proxy statement/prospectus, PowerUp Sponsor LLC (the “Original Sponsor”) and the Sponsor own approximately 92.56% of the issued and outstanding ordinary shares. Because the Initial Shareholders agreed to vote their aggregate 7,187,500 outstanding Class A ordinary shares in favor of each of the proposals, PowerUp will not need any of the public shares to be voted in favor of any of the proposals in order for each proposal to be approved. See “Business Combination Proposal — Related Agreements — Letter Agreement” in the accompanying proxy statement/prospectus for more information related to the Letter Agreement.
At Closing, the Sponsor (i) will hold a total of 6,834,333 warrants of New Aspire, which consists solely of warrants currently held by the Sponsor (which it acquired for less than $0.0001 per warrant) and (ii) may hold a total of up to 6,317,500 shares of New Aspire Common Stock, assuming additional Working Capital Loans (as defined in the accompanying proxy statement/prospectus) are entered into prior to Closing, consisting of (a) 4,317,500 shares currently held by the Sponsor (which it acquired for less than $0.0001 per share) and (b) up to 2,000,000 Working Capital Loan Shares (as defined in the accompanying proxy statement/prospectus) to be issued to the Sponsor as partial consideration for the Sponsor entering into certain Working Capital Loans, with such exact number to be calculated based on the actual dollar amount of principal loaned subsequent to the date of the Business Combination Agreement. As of the date of this proxy statement/prospectus, 567,905 of these Working Capital Loan Shares are issuable at Closing. Additionally, pursuant to an administrative services agreement, the Sponsor will be paid all accrued and unpaid administrative fees at Closing. As of the date of this proxy statement/prospectus, the Sponsor is owed $368,939 in administrative fees. PowerUp has also agreed to pay the Sponsor, at Closing, $1,000,000 under a promissory note fee agreement (the “Promissory Note Fee Agreement”) dated October 2, 2024. Pursuant to the Promissory Note Fee Agreement, PowerUp and the Sponsor agreed that the Sponsor took a significant risk on behalf of PowerUp by loaning $2,000,000 to PowerUp’s former target company via a convertible promissory note and that Sponsor should be compensated for that risk. As consideration for the foregoing, PowerUp agreed to pay the Sponsor the $1,000,000 fee upon the successful closing of the Business Combination. For more information, see “Summary of the Proxy Statement/Prospectus – Compensation Received by the Sponsor, the Original Sponsor, and Their Affiliates” and “Business Combination Proposal — Interests of PowerUp’s Directors and Executive Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination.”
At Closing, the Original Sponsor will hold a total of (i) 2,870,000 shares of New Aspire Common Stock, which consists solely of shares currently held by the Original Sponsor (which it originally acquired for approximately $0.0029 per share) and (ii) 2,929,000 warrants of New Aspire, which consists solely of warrants currently held by the Original Sponsor (which it originally acquired for $1.50 per warrant). Additionally, pursuant to the Sponsor Purchase Agreement (as defined in the accompanying proxy statement/prospectus), $1.00 will become due and payable to the Original Sponsor at Closing. For more information, see “Summary of the Proxy Statement/Prospectus – Compensation Received by the Sponsor, the Original Sponsor, and Their Affiliates” and “Business Combination Proposal — Interests of PowerUp’s Directors and Executive Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination.”
At Closing, pursuant to the Second Subscription Agreements (as defined in the accompanying proxy statement/prospectus), VKSS Capital, LLC (the “Affiliate”) will receive 250,000 shares of PowerUp common stock from the Sponsor. The Affiliate is not receiving additional cash or other compensation in connection with the Business Combination. For more information, see “Summary of the Proxy Statement/Prospectus – Compensation Received by the Sponsor, the Original Sponsor, and Their Affiliates” and “Business Combination Proposal — Interests of PowerUp’s Directors and Executive Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination.”
The retention of shares by the Sponsor, the Original Sponsor, and the Affiliate, and the potential issuance of Working Capital Loan Shares to the Sponsor at Closing will not result in a material dilution of the equity interests of non-redeeming PowerUp shareholders. For more information, see “Questions and Answers for Shareholders of PowerUp – What equity stake will current PowerUp shareholders and current Aspire Stockholders hold in New Aspire immediately after the consummation of the Business Combination?”
When you consider the recommendation of the PowerUp Board in favor of approval of the Business Combination, you should keep in mind that the Initial Shareholders, PowerUp’s directors and officers, and Aspire’s directors and officers may have interests in such proposal that are different from, or in addition to, those of PowerUp shareholders and warrant holders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to shareholders that they approve the Business Combination. PowerUp’s Board concluded that the potentially disparate interests would be mitigated because (i) these interests are disclosed and included in the accompanying proxy statement/prospectus, (ii) most of these disparate interests would exist with respect to a business combination by PowerUp with any other target business or businesses, and (iii) a significant portion of the consideration to PowerUp’s directors and executive officers was structured to be realized based on the future performance of New Aspire’s Common Stock. In addition, PowerUp’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and unanimously approving, as members of the PowerUp Board, the Business Combination Agreement and the transactions contemplated thereby, including the Business Combination. Nonetheless, shareholders should take these disparate interests into account in deciding whether to approve the Business Combination. For more information, see “Business Combination Proposal — Interests of PowerUp’s Directors and Executive Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination.”
PowerUp’s units, public shares and public warrants are currently listed on Nasdaq under the symbols “PWUPU,” “PWUP” and “PWUPW,” respectively. PowerUp will apply for listing, to be effective at the time of the Business Combination, of New Aspire Common Stock and public warrants on Nasdaq under the proposed symbols “ASBP” and “ASBPW,” respectively. It is a condition to the consummation of the Business Combination that PowerUp receive confirmation from Nasdaq that New Aspire has been conditionally approved for listing on Nasdaq, but there can be no assurance such listing condition will be met or that PowerUp will obtain such confirmation from Nasdaq, and you may not know whether the listing condition has been met at the time of the extraordinary general meeting. If such listing condition is not met or if such confirmation is not obtained, the Business Combination will not be consummated.
PowerUp will hold an extraordinary general meeting (the “extraordinary general meeting”) to consider matters relating to the Business Combination at [●], Eastern Time, on [●]. For purposes of the Cayman Islands Companies Act and the Amended and Restated Memorandum and Articles of Association of PowerUp, the physical location of the extraordinary general meeting shall be at the offices of [●] located at [●], or you or your proxyholder will be able to attend and vote at the extraordinary general meeting online by visiting [●] and using a control number assigned by Equiniti Trust Company, LLC (f/k/a American Stock Transfer & Trust Company), our transfer agent. To register and receive access to the extraordinary general meeting, registered shareholders and beneficial shareholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the accompanying proxy statement/prospectus.
Holders of PowerUp’s public shares will have the right to request that PowerUp redeem all or a portion of their public shares for cash. As of September 30, 2024, PowerUp’s Trust Account had a balance of approximately $6.6 million. The parties anticipate needing to raise outside capital through debt or equity financing at, or in connection with, Closing to allow Aspire to meet the $0.00 Minimum Cash Condition, to allow the combined company to meet Nasdaq initial listing requirements as well as demonstrate to Nasdaq its ability to continue to meet the exchange’s on-going listing requirements, and to allow the combined company to satisfy certain obligations and have sufficient working capital. If the parties are unsuccessful at closing a financing concurrent with the Closing of the Business Combination, the Closing likely would not occur even if PowerUp waives the $0.00 Minimum Cash Condition, unless PowerUp and/or Aspire is able to defer, or convert into equity, some or all of their expenses and liabilities. However, as of the date of the proxy statement/prospectus, no parties have affirmatively agreed to waive or convert into equity, any obligations that are, by their terms, repayable in cash. This could result in the parties electing to proceed with the Closing, and the combined company would have to reach an accommodation with its creditors and other counterparties to defer repayment of those obligations and/or the combined company having insufficient cash to fully implement its business and commercialize its products. There is no assurance that any debtors or counterparties will agree to defer obligations owed by the combined company or otherwise agree to accommodations favorable to the combined company.
Moreover, any obligations of the combined company that are not satisfied at closing, or that are deferred at the closing, would result in the combined company carrying additional liabilities on its balance sheet and, in turn, could have an adverse effect on the combined company’s ability to raise additional equity or debt financing after the closing, or result in the combined company raising capital on terms less favorable, and also would result in the combined company needing to reserve or utilize funds for deferred expenses and obligations in lieu of utilizing those funds to further its business operations. Impediments to the combined company’s access to outside capital, and matters that could cause the combined company to scale back or delay the implementation of its business plan would likely delay the on-going development of the combined company’s products and timeline by which hopes to begin generating revenue which would have an adverse effect on the combined company’s results of operations. For more information, see “Summary of the Proxy Statement/Prospectus – Sources and Uses of Funds for the Business Combination.”
PowerUp is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, and has elected to take advantage of certain reduced public company reporting requirements. See “Summary of the Proxy Statement/Prospectus — Emerging Growth Company.”
If you have any questions or need assistance voting your ordinary shares, please contact Issuer Direct Corporation, our proxy solicitor, by calling (919) 481-4000, or banks and brokers can call collect at (919) 481-4000, or by emailing proxy@issuerdirect.com. The notice of the extraordinary general meeting and the proxy statement/prospectus relating to the Business Combination will be available at https://[●].
The accompanying proxy statement/prospectus provides shareholders of PowerUp with detailed information about the Business Combination and other matters to be considered at the extraordinary general meeting of PowerUp. We encourage you to read the entire accompanying proxy statement/prospectus, including the annexes and other documents referred to therein, carefully and in their entirety. In particular, when you consider the recommendation of the board of directors of PowerUp to vote in favor of the proposals described in this proxy statement/prospectus, you should keep in mind that PowerUp’s directors and officers have interests in the Business Combination that are different from, in addition to or may conflict with your interests as a shareholder. For instance, the Sponsor, and the officers and directors of PowerUp who have invested in the Sponsor entity, will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate. See “Business Combination Proposal — Interests of PowerUp’s Directors and Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination” for a further discussion. You should also carefully consider the risk factors described in the section entitled “Risk Factors” beginning on page 63 of the accompanying proxy statement/prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
The accompanying proxy statement/prospectus is dated [●], 2024, and is first being mailed to PowerUp’s shareholders on or about [●], 2024.
POWERUP ACQUISITION CORP.
A Cayman Islands Exempted Company
(Company Number 371384)
188 Grand Street, Unit #195
New York, NY 10013
NOTICE OF EXTRAORDINARY GENERAL MEETING
TO BE HELD ON [●]
TO THE SHAREHOLDERS OF POWERUP ACQUISITION CORP.:
NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the shareholders (the “extraordinary general meeting”) of PowerUp Acquisition Corp., a Cayman Islands exempted company (“PowerUp”), will be held at [●], Eastern Time, on [●], at the offices of [●] located at [●]. The extraordinary general meeting may also be attended virtually over the internet. You will be able to attend the extraordinary general meeting online, vote, and submit your questions during the extraordinary general meeting by visiting [●]. You are cordially invited to attend the extraordinary general meeting, which will be held for the following purposes:
| | ● | Proposal No. 1 — The Business Combination Proposal — to consider and vote upon a proposal to (i) approve and adopt, by an ordinary resolution under the Cayman Islands Companies Act, PowerUp’s entry into the Agreement and Plan of Merger, dated as of August 26, 2024, as amended by an Amendment Agreement dated September 5, 2024 and a Second Amendment Agreement dated October 9, 2024 (as it may be further amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among PowerUp, PowerUp Merger Sub II, Inc., a Delaware corporation and wholly owned subsidiary of PowerUp (“Merger Sub”), SRIRAMA Associates, LLC, a Delaware limited liability company (the “Sponsor”), Stephen Quesenberry, in the capacity as the representative from and after the Effective Time for the Aspire stockholders as of immediately prior to the Effective Time (the “Seller Representative”), and Aspire Biopharma, Inc., a Puerto Rico corporation (“Aspire”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, pursuant to which, among other things, following the deregistration of PowerUp as an exempted company in the Cayman Islands and the continuation and domestication of PowerUp as a corporation in the State of Delaware, at the Effective Time, Merger Sub will merge with and into Aspire, with Aspire being the surviving company; and (ii) approve the transactions contemplated by the Business Combination Agreement (the “Business Combination”). After giving effect to such Business Combination, Aspire shall be a wholly owned subsidiary of New Aspire. At Closing, the Aspire Stockholders shall collectively be entitled to receive, in the aggregate, a number of shares of duly authorized, validly issued, fully paid and nonassessable shares of New Aspire Common Stock with an aggregate value equal to (a) $350 million less (b) the amount by which Aspire’s cash at Closing is less than the Minimum Cash Condition (but only in the event the Minimum Cash Condition is waived by PowerUp), if any, less (c) Aspire’s Indebtedness at Closing, in accordance with the terms of the Business Combination Agreement and certain related agreements (including the 2024 Plan, the Non-Competition Agreements, and the Lock-Up Agreements, each in the form attached to the proxy statement/prospectus as Annex E, Annex F, and Annex G, respectively), and the transactions contemplated thereby. |
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| | ● | Proposal No. 2 — The Domestication Proposal — to consider and vote upon a proposal, as a special resolution under the Cayman Islands Companies Act, that PowerUp be transferred by way of continuation to Delaware pursuant to Article 47 of PowerUp’s Amended and Restated Memorandum and Articles of Association (the “Existing Governing Documents”), Part XII of the Cayman Islands Companies Act, and Section 388 of the Delaware General Corporation Law (the “DGCL”) and, immediately upon being deregistered in the Cayman Islands, PowerUp be continued and domesticated as a corporation under the laws of the State of Delaware and, conditional upon, and with effect from, the registration of PowerUp as a corporation in the State of Delaware, the name of PowerUp be changed from “PowerUp Acquisition Corp.” to “Aspire Biopharma Holdings, Inc.” |
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| | ● | Proposal No. 3 — The Organizational Documents Proposal — to consider and vote upon a proposal, as a special resolution under the Cayman Islands Companies Act, to approve the amendment and restatement of the Existing Governing Documents by their deletion and replacement with the proposed new certificate of incorporation, a copy of which is attached to the proxy statement/prospectus as Annex C (the “Proposed Charter”), and bylaws, a copy of which is attached to the proxy statement/prospectus as Annex D (the “Proposed Bylaws” and, together with the Proposed Charter, the “Proposed Organizational Documents”), of New Aspire, which, if approved, would take effect immediately after the PowerUp Domestication. |
| | ● | Proposal No. 4 — The Advisory Charter Proposals — to consider and vote, on a non-binding advisory basis, upon the following eight (8) separate resolutions to approve material differences between the Proposed Charter and the Existing Governing Documents: |
| | | ● | Advisory Charter Proposal 4A — to increase the authorized share capital of PowerUp from US$35,500 divided into (i) 300,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share, to (ii) 490,000,000 shares of common stock, par value $0.0001 per share, of New Aspire and 10,000,000 shares of preferred stock, par value $0.0001 per share, of New Aspire. |
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| | | ● | Advisory Charter Proposal 4B — to permit removal of a director with or without cause by the affirmative vote of the holders of a majority of the voting power of all of the outstanding shares of voting stock of New Aspire entitled to vote at an election of directors, voting together as a single class. |
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| | | ● | Advisory Charter Proposal 4C — to provide that, subject to the rights of holders of any series of preferred stock, the number of directors will be fixed from time to time by a majority of the board of directors of New Aspire (the “New Aspire Board”). |
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| | | ● | Advisory Charter Proposal 4D — to eliminate the ability of New Aspire stockholders to take action by written consent in lieu of a meeting. |
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| | | ● | Advisory Charter Proposal 4E — to provide that the Proposed Bylaws may be amended, altered, repealed or adopted either (x) by the affirmative vote of a majority of the New Aspire Board then in office or (y) by the approval of at least a majority of the voting power of all of the then-outstanding shares of voting stock of New Aspire. |
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| | | ● | Advisory Charter Proposal 4F — to provide that the Proposed Charter may be amended, altered, repealed or adopted by the approval of at least two-thirds of the voting power of all of the then-outstanding shares of voting stock of New Aspire for amendments for certain provisions of the Proposed Charter relating to: (i) classification and election of the New Aspire Board, removal of directors from office, and filling vacancies on the New Aspire Board, (ii) exculpation of personal liability of a director of New Aspire and indemnification of persons serving as directors or officers of New Aspire, and (iii) amendments to the Proposed Bylaws. |
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| | | ● | Advisory Charter Proposal 4G — to provide that, unless New Aspire otherwise consents in writing, the Court of Chancery for the State of Delaware (or, in the event that the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) will be the sole and exclusive forum for certain stockholder actions and the federal district courts of the United States shall be the exclusive forum for claims arising out of the Securities Act of 1933, as amended (the “Securities Act”), provided that the exclusive forum provision in the Proposed Charter does not apply to claims arising out of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for which the federal district courts of the United States are the exclusive forum. |
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| | | ● | Advisory Charter Proposal 4H — to eliminate certain provisions related to PowerUp’s status as a blank check company, including to remove the requirement to dissolve New Aspire and allow it to continue as a corporate entity with perpetual existence following consummation of the Business Combination. |
| | ● | Proposal No. 5 — The Nasdaq Proposal — to consider and vote upon a proposal to approve, as an ordinary resolution under the Cayman Islands Companies Act, for the purposes of complying with the applicable provisions of Nasdaq Rule 5635, the issuance of shares of New Aspire Common Stock in connection with the Business Combination. |
| | ● | Proposal No. 6 — The Omnibus Incentive Plan Proposal — to consider and vote upon a proposal to approve, as an ordinary resolution under the Cayman Islands Companies Act, the Aspire Biopharma Holdings, Inc. 2024 Omnibus Incentive Plan, a copy of which is attached to the proxy statement/prospectus as Annex E. |
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| | ● | Proposal No. 7 — The Election of Directors Proposal — to consider and vote upon a proposal to approve, as an ordinary resolution under the Cayman Islands Companies Act, the election of seven directors to serve staggered terms on New Aspire’s board of directors. |
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| | ● | Proposal No. 8 — The Adjournment Proposal — to consider and vote upon a proposal to approve, as an ordinary resolution under the Cayman Islands Companies Act, the adjournment of the extraordinary general meeting to a later date or dates (A) to the extent necessary or convenient to ensure that any required supplement or amendment to the proxy statement/prospectus is provided to PowerUp shareholders or, if as of the time for which the extraordinary general meeting is scheduled, there are insufficient PowerUp ordinary shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the extraordinary general meeting or (B) in order to solicit additional proxies from PowerUp shareholders in favor of one or more of the proposals at the extraordinary general meeting. |
Each of the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Nasdaq Proposal, the Election of Directors Proposal, and the Omnibus Incentive Plan Proposal is conditioned on the approval and adoption of each of the other Condition Precedent Proposals. The Advisory Charter Proposals are conditioned upon the approval of the Organizational Documents Proposal. The Adjournment Proposal is not conditioned upon the approval of any other proposal.
These items of business listed above are described in more detail in this proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting.
Only holders of record of ordinary shares at the close of business on December 24, 2024 are entitled to notice of, and to vote and have their votes counted at, the extraordinary general meeting and any adjournment of the extraordinary general meeting.
This proxy statement/prospectus and accompanying proxy card is being provided to PowerUp’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournment of the extraordinary general meeting. Whether or not you plan to attend the extraordinary general meeting, all of PowerUp’s shareholders are urged to read the proxy statement/prospectus, including the annexes and the documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in the section entitled “Risk Factors” beginning on page 63 of the proxy statement/prospectus.
After careful consideration, the board of directors of PowerUp has unanimously approved the Business Combination Agreement and the transactions contemplated thereby, including the Business Combination and PowerUp Domestication, and unanimously recommends that shareholders vote “FOR” the adoption of the Business Combination Agreement and approval of the transactions contemplated thereby, including the Business Combination and PowerUp Domestication, and “FOR” all other proposals presented to PowerUp’s shareholders in the proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of PowerUp, you should keep in mind that PowerUp’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See “Business Combination Proposal — Interests of PowerUp’s Directors and Executive Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination” in the proxy statement/prospectus for a further discussion of these considerations.
Pursuant to the Existing Governing Documents, a public shareholder may request that PowerUp redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:
| | (i) | (a) hold public shares or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares; |
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| | (ii) | submit a written request to Equiniti Trust Company, LLC (f/k/a American Stock Transfer & Trust Company) (“Equiniti”), PowerUp’s transfer agent, in which you (i) request that PowerUp redeem all or a portion of your public shares for cash; (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and (iii) deliver your public shares to Equiniti, PowerUp’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”); and |
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| | (iii) | deliver your certificates for public shares (if any) along with the redemption forms to Equiniti, PowerUp’s transfer agent, physically or electronically through The Depository Trust Company. |
Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to [●], [●] Time, on [●] (two business days before the scheduled vote at the extraordinary general meeting) in order for their shares to be redeemed.
Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. Public holders that hold their units in an account at a brokerage firm or bank must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Equiniti, PowerUp’s transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Equiniti in order to validly redeem its shares. Public shareholders may elect to redeem public shares regardless of if or how they vote in respect of the Business Combination Proposal and regardless of whether they hold public shares on the record date. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Equiniti, PowerUp’s transfer agent, New Aspire will redeem such public shares for a per share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of PowerUp’s initial public offering (the “Trust Account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, based on approximately $6.6 million of funds in the Trust Account and 577,644 shares subject to possible redemption, in each case, as of September 30, 2024, this would have amounted to approximately $11.43 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption will take place following the PowerUp Domestication and, accordingly, it is shares of New Aspire Common Stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of PowerUp — Redemption Rights” in the proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.
Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.
The Original Sponsor, pursuant to the Letter Agreement, and the Sponsor, pursuant to the Sponsor Purchase Agreement, agreed to, among other things, vote all of their shares in favor of the proposals being presented at the extraordinary general meeting in connection with the consummation of the Business Combination and not to redeem any public shares they own. Such shares will be excluded from the pro rata calculation used to determine the per share redemption price. As of the date of the proxy statement/prospectus, the Original Sponsor and the Sponsor own approximately 92.56% of the issued and outstanding ordinary shares. Because the Initial Shareholders agreed to vote their aggregate 7,187,500 outstanding Class A ordinary shares in favor of each of the proposals, PowerUp will not need any of the public shares to be voted in favor of any of the proposals in order for each proposal to be approved. See “Business Combination Proposal — Related Agreements — Letter Agreement” in the accompanying proxy statement/prospectus for more information related to the Letter Agreement.
The Business Combination Agreement is subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the parties to the Business Combination Agreement would waive any such provision of the Business Combination Agreement. The Closing of the Business Combination is conditioned on Aspire having no less than $0.00 of available cash, after giving effect to the payment in full of Aspire’s unpaid transaction expenses and PowerUp’s unpaid expenses and liabilities (including, but not limited to, the Working Capital Loans) (the “Minimum Cash Condition”). Therefore, even if the Business Combination Proposal is approved, the Business Combination will not close if Aspire does not have sufficient cash remaining to meet the Minimum Cash Condition.
The parties anticipate needing to raise outside capital through debt or equity financing at, or in connection with, Closing to allow Aspire to meet the Minimum Cash Condition, to allow the combined company to meet Nasdaq initial listing requirements as well as demonstrate to Nasdaq its ability to continue to meet the exchange’s on-going listing requirements, and to allow the combined company to satisfy certain obligations and have sufficient working capital. If the parties are unsuccessful at closing a financing concurrent with the Closing of the Business Combination, the Closing likely would not occur even if PowerUp waives the $0.00 Minimum Cash Condition, unless PowerUp and/or Aspire is able to defer, or convert into equity, some or all of their expenses and liabilities. However, as of the date of the proxy statement/prospectus, no parties have affirmatively agreed to waive or convert into equity, any obligations that are, by their terms, repayable in cash. This could result in the parties electing to proceed with the Closing, and the combined company would have to reach an accommodation with its creditors and other counterparties to defer repayment of those obligations and/or the combined company having insufficient cash to fully implement its business and commercialize its products. There is no assurance that any debtors or counterparties will agree to defer obligations owed by the combined company or otherwise agree to accommodations favorable to the combined company.
Moreover, any obligations of the combined company that are not satisfied at closing, or that are deferred at the closing, would result in the combined company carrying additional liabilities on its balance sheet and, in turn, could have an adverse effect on the combined company’s ability to raise additional equity or debt financing after the closing, or result in the combined company raising capital on terms less favorable, and also would result in the combined company needing to reserve or utilize funds for deferred expenses and obligations in lieu of utilizing those funds to further its business operations. Impediments to the combined company’s access to outside capital, and matters that could cause the combined company to scale back or delay the implementation of its business plan would likely delay the on-going development of the combined company’s products and timeline by which hopes to begin generating revenue which would have an adverse effect on the combined company’s results of operations. For more information, see “Summary of the Proxy Statement/Prospectus – Sources and Uses of Funds for the Business Combination.”
For further discussion on the Minimum Cash Condition, see “Notes to Unaudited Pro Forma Condensed Combined Financial Information” and “Business Combination Proposal – Conditions to Closing of the Business Combination.”
The approval of the Domestication Proposal and the Organizational Documents Proposal each requires a special resolution under the Cayman Islands Companies Act, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. The approval of each of the Business Combination Proposal, the Advisory Charter Proposals, the Omnibus Incentive Plan Proposal, the Nasdaq Proposal, the Election of Directors Proposal, and the Adjournment Proposal requires an ordinary resolution, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.
Your vote is very important. Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in the proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The Business Combination will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Advisory Charter Proposals are conditioned upon the approval of the Organizational Documents Proposal. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in the proxy statement/prospectus.
If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.
Your attention is directed to the proxy statement/prospectus following this notice (including the annexes and other documents referred to herein) for a more complete description of the Business Combination and related transactions and each of the proposals. You are encouraged to read the proxy statement/prospectus carefully and in its entirety, including the annexes and other documents referred to herein. If you have any questions or need assistance voting your ordinary shares, please contact Issuer Direct Corporation, our proxy solicitor, by calling (919) 481-4000, or banks and brokers can call collect at (919) 481-4000, or by emailing proxy@issuerdirect.com.
Thank you for your participation. We look forward to your continued support.
By Order of the Board of Directors of PowerUp Acquisition Corp.,
Surendra Ajjarapu
Chief Executive Officer and Chairman of the Board of Directors
TABLE OF CONTENTS
ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates important business and financial information about PowerUp that is not included in or delivered with the document. You may request copies of this proxy statement/prospectus and any other publicly available information concerning PowerUp, without charge, by written request to PowerUp Acquisition Corp., 188 Grand Street, Unit #195, New York, NY 10013, or by telephone request at (347) 313-8109; or from Issuer Direct Corporation, our proxy solicitor, by calling (919) 481-4000, or banks and brokers can call collect at (919) 481-4000, or by emailing proxy@issuerdirect.com, or from the SEC through the SEC website at http://www.sec.gov.
In order for PowerUp’s shareholders to receive timely delivery of the documents in advance of the extraordinary general meeting of PowerUp to be held on [●], you must request the information no later than five business days prior to the date of the extraordinary general meeting, or by [●].
MARKET AND INDUSTRY DATA
Certain information contained in this document relates to or is based on studies, publications, surveys and other data obtained from third-party sources and Aspire’s own internal estimates and research. While we are not aware of any misstatements regarding such third-party information and data presented in this proxy statement/prospectus, such information and data involves risks and uncertainties and is subject to change based on various factors, including, potentially, those discussed under the section entitled “Risk Factors.” Furthermore, such information and data cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. Finally, while we believe our own internal estimates and research are reliable, and are not aware of any misstatements regarding such information and data presented in this proxy statement/prospectus, such research has not been verified by any independent source.
TRADEMARKS
This document contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this proxy statement/prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
SELECTED DEFINITIONS
Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, the following terms shall have the following meanings:
| | ● | “2023 Extension Meeting” means the PowerUp extraordinary general meeting of shareholders held on May 18, 2023, at which shareholders voted upon a proposal to amend the Amended and Restated Memorandum and Articles of Association to extend the date by which PowerUp must consummate an initial business combination; |
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| | ● | “2023 Extension Redemption” means the redemption of 26,946,271 Class A ordinary shares in connection with the 2023 Extension Meeting; |
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| | ● | “2024 Extension Amendment Proposal” means the proposal, presented in PowerUp’s definitive proxy statement filed with the SEC on May 1, 2024, to extend the date by which the Company must consummate an initial business combination from May 23, 2024 to February 17, 2025 by amending the Existing Governing Documents; |
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| | ● | “2024 Extension Meeting” means the PowerUp extraordinary general meeting of shareholders held on May 17, 2024 to consider and approve, among other things, the 2024 Extension Amendment Proposal and the NTA Proposal; |
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| | ● | “2024 Extension Redemption” means the redemption of 1,226,085 Class A ordinary shares in connection with the 2024 Extension Meeting; |
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| | ● | “2024 Plan” means the Aspire Biopharma Holdings, Inc. 2024 Omnibus Incentive Plan; |
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| | ● | “Amended and Restated Memorandum and Articles of Association” means the amended and restated memorandum and articles of association of PowerUp; |
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| | ● | “Amendment Agreement” means that certain Amendment Agreement, dated September 5, 2024, by and among PowerUp, Merger Sub, Sponsor, Seller Representative, and Aspire; |
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| | ● | “ASC” means Accounting Standards Codification; |
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| | ● | “Aspire” means Aspire Biopharma, Inc., a Puerto Rico corporation; |
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| | ● | “Aspire Common Stock” means the voting common stock, par value $0.001 per share, of Aspire; |
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| | ● | “Aspire Domestication” means the transfer by way of continuation and deregistration of Aspire from Puerto Rico and the continuation and domestication of Aspire as a corporation incorporated in the State of Delaware prior to the Business Combination; |
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| | ● | “Aspire Preferred Stock” means the shares of preferred stock, par value $0.0001 per share, of Aspire, including the Aspire Series A preferred stock and any authorized undesignated preferred stock; |
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| | ● | “Aspire Stockholder” means a holder of a share of Aspire Common Stock as of immediately prior to the Effective Time; |
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| | ● | “Aspire Warrants” means warrants to purchase shares of Aspire Common Stock that have been granted to persons pursuant to written warrant agreements between Aspire and each respective warrant holder; |
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| | ● | “ASU” means the Accounting Standards Updates issued by FASB; |
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| | ● | “Business Combination” means, all transactions contemplated by the Business Combination Agreement, including the merger of Merger Sub with and into Aspire, with Aspire surviving as a wholly owned subsidiary of New Aspire; |
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| | ● | “Business Combination Agreement” means, that certain Agreement and Plan of Merger, dated as of August 26, 2024, as amended by an Amendment Agreement dated September 5, 2024 and a Second Amendment Agreement dated October 9, 2024 (as it may be further amended, supplemented or otherwise modified from time to time), by and among PowerUp, Merger Sub, Sponsor, Seller Representative, and Aspire; |
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| | ● | “Cayman Islands Companies Act” means the Companies Act (2023 Revision) of the Cayman Islands as the same may be amended from time to time; |
| | ● | “Citigroup” means Citigroup Global Markets Inc., the underwriter for the initial public offering; |
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| | ● | “Class A ordinary shares” means the Class A ordinary shares, par value $0.0001 per share, of PowerUp, which will convert by operation of law into shares of New Aspire Class A Common Stock, on a one-for-one basis, in connection with the PowerUp Domestication; |
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| | ● | “Class B ordinary shares” or “founder shares” means the Class B ordinary shares, par value $0.0001 per share, of PowerUp that were initially issued to our Original Sponsor in a private placement prior to our initial public offering and converted to Class A ordinary shares on May 18, 2023; |
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| | ● | “Closing” means the closing of the Business Combination; |
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| | ● | “Closing Date” means that date that is in no event later than the third (3rd) business day, following the satisfaction (or, to the extent permitted by applicable law, waiver) of the conditions to Closing set forth in the Business Combination Agreement, which are described under the section entitled “Business Combination Proposal — Conditions to Closing of the Business Combination” (other than those conditions that by their nature are to be satisfied at the Closing, but subject to satisfaction or waiver of such conditions) or at such other date as PowerUp and Aspire may agree in writing; |
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| | ● | “Code” means the U.S. Internal Revenue Code of 1986, as amended; |
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| | ● | “Condition Precedent Proposals” means the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Nasdaq Proposal, the Election of Directors Proposal, and the Omnibus Incentive Plan Proposal, collectively; |
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| | ● | “Conversion” means the conversion, on May 18, 2023, of all of the issued and outstanding Class B ordinary shares of PowerUp into Class A ordinary shares on a one-for-one basis upon the election of the Original Sponsor; |
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| | ● | “COVID-19” means the novel coronavirus disease 2019; |
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| | ● | “DGCL” means the Delaware General Corporation Law; |
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| | ● | “DTC” means The Depository Trust Company; |
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| | ● | “Effective Time” means the time at which the Business Combination becomes effective; |
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| | ● | “Equiniti” means Equiniti Trust Company, LLC (f/k/a American Stock Transfer & Trust Company); |
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| | ● | “Exchange Act” means the Securities Exchange Act of 1934, as amended; |
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| | ● | “Exchange Ratio” means the ratio represented by the number of shares of New Aspire Common Stock to be issued for each share of issued and outstanding Aspire common stock (assuming the Preferred Conversion) in connection with the Business Combination; |
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| | ● | “extraordinary general meeting” means the extraordinary general meeting of PowerUp to be held at [●], [●] Eastern Time, on [●], at the offices of [●] located at [●], and via a virtual meeting, unless the extraordinary general meeting is adjourned, or at such other time, on such other date and at such other place to which the meeting may be adjourned; |
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| | ● | “Existing Governing Documents” means the Amended and Restated Memorandum and Articles of Association; |
| | ● | “Extension Period” means any extended time that PowerUp has to consummate an initial business combination beyond February 17, 2025 as a result of a shareholder vote to amend the Amended and Restated Memorandum and Articles of Association; |
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| | ● | “FASB” means the Financial Accounting Standards Board; |
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| | ● | “FINRA” means the Financial Industry Regulatory Authority; |
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| | ● | “F Reorganization” means a reorganization within the meaning of Section 368(a)(1)(F) of the Code; |
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| | ● | “GAAP” means the U.S. generally accepted accounting principles, consistently applied; |
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| | ● | “Holders” means the U.S. Holders together with the Non-U.S. Holders; |
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| | ● | “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; |
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| | ● | “Indebtedness” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money (including the outstanding principal and accrued but unpaid interest), (b) all obligations for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business), (c) any other indebtedness of such Person that is evidenced by a note, bond, debenture, credit agreement or similar instrument, (d) all obligations of such Person under leases that should be classified as capital leases in accordance with GAAP, (e) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance, guarantee or similar credit transaction, in each case, that has been drawn or claimed against, (f) all obligations of such Person in respect of acceptances issued or created, (g) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency, (h) all obligations secured by an Lien on any property of such Person, (i) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with payment of any Indebtedness of such Person and (j) all obligation described in clauses (a) through (i) above of any other Person which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss; |
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| | ● | “Inflation Reduction Act” means the Inflation Reduction Act of 2022; |
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| | ● | “initial public offering” means PowerUp’s initial public offering that was consummated on February 23, 2022; |
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| | ● | “Initial Shareholders” means the Original Sponsor (PowerUp Sponsor LLC), the Sponsor (SRIRAMA Associates, LLC), and each of their permitted transferees under the Letter Agreement; |
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| | ● | “Insiders” means the individual PowerUp officers and directors that entered into the Letter Agreement; |
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| | ● | “Investment Company Act” means the Investment Company Act of 1940, as amended; |
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| | ● | “IRS” means the Internal Revenue Service; |
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| | ● | “JOBS Act” means the Jumpstart Our Business Startups Act of 2012; |
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| | ● | “Letter Agreement” means that certain letter agreement, dated February 17, 2022, by and among the Original, Sponsor, the Insiders and PowerUp; |
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| | ● | “Lien” means any mortgage, pledge, security interest, attachment, right of first refusal, option, proxy, voting trust, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), restriction (whether on voting, sale, transfer, disposition or otherwise), any subordination arrangement in favor of another Person, or any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar Law. |
| | ● | “Locked-Up Parties” means the Significant Aspire Holders; |
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| | ● | “Lock-Up Agreements” means the lock-up agreements to be executed in connection with the Closing by PowerUp, the Significant Aspire Holders, and the Sponsor; |
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| | ● | “Lock-Up Securities” means the shares of New Aspire Common Stock and warrants subject to the Lock-Up Agreements; |
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| | ● | “Lock-Up Shares” means the shares of New Aspire Common Stock subject to the Lock-Up Agreements; |
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| | ● | “Marcum” means Marcum LLP, PowerUp’s independent registered public accounting firm; |
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| | ● | “Merger Consideration” means a number of shares of duly authorized, validly issued, fully paid and nonassessable shares of New Aspire Common Stock with an aggregate value equal to (a) $350 million less (b) the amount by which Aspire’s cash at Closing is less than the Minimum Cash Condition (but only in the event the Minimum Cash Condition is waived by PowerUp), if any, less (c) Aspire’s Indebtedness at Closing; |
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| | ● | “Minimum Cash Condition” means the closing condition that requires Aspire to have no less than $0.00 of available cash, after giving effect to the payment in full of Aspire’s unpaid transaction expenses and PowerUp’s unpaid expenses and liabilities (including, but not limited to, the Working Capital Loans); |
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| | ● | “Nasdaq” means the Nasdaq Stock Market LLC; |
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| | ● | “New Aspire” means PowerUp upon and after the Business Combination; |
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| | ● | “New Aspire Board” means the board of directors of New Aspire; |
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| | ● | “New Aspire Common Stock” means the common stock, par value $0.0001 per share, of New Aspire; |
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| | ● | “Non-Competition Agreements” means the non-competition agreements to be delivered in connection with the Closing by the Significant Aspire Holders in favor of PowerUp and Aspire; |
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| | ● | “Non-U.S. Holder” means a beneficial owner of a PowerUp Security who or that is, for U.S. federal income tax purposes: a non-resident alien individual, other than certain former citizens and residents of the United States subject to U.S. tax as expatriates; a foreign corporation; or an estate or trust that is not a U.S. Holder; |
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| | ● | “NTA Proposal” means the proposal, presented in PowerUp’s definitive proxy statement filed with the SEC on May 1, 2024, to remove the requirements limiting PowerUp’s ability to consummate an initial business combination if it would have less than $5,000,001 in net tangible assets prior to or upon consummation of such initial business combination by amending the Existing Governing Documents; |
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| | ● | “Original Sponsor” means PowerUp Sponsor LLC; |
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| | ● | “Outside Date” means February 17, 2025; |
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| | ● | “Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof; |
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| | ● | “PFIC” means passive foreign investment company; |
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| | ● | “PowerUp Domestication” means the transfer by way of continuation and deregistration of PowerUp from the Cayman Islands and the continuation and domestication of PowerUp as a corporation incorporated in the State of Delaware prior to the Business Combination; |
| | ● | “Preferred Conversion” means the conversion of each share of Aspire Preferred Stock that is issued and outstanding immediately prior to the Effective Time into a number of shares of Aspire Common Stock at the then-effective conversion rate as calculated pursuant to Aspire’s Certificate of Designation of Series A Preferred Stock; |
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| | ● | “private placement warrants” means the warrants sold to the Original Sponsor in a private placement simultaneously with the closing of the initial public offering; |
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| | ● | “pro forma” means giving pro forma effect to the Business Combination, including the Business Combination and any other equity financing transactions which may be entered into prior to Closing; |
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| | ● | “Proposed Bylaws” means the proposed bylaws of New Aspire to be effective upon the PowerUp Domestication attached to this proxy statement/prospectus as Annex D; |
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| | ● | “Proposed Charter” means the proposed certificate of incorporation of New Aspire to be effective upon the PowerUp Domestication attached to this proxy statement/prospectus as Annex C; |
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| | ● | “Proposed Governing Documents” means the Proposed Charter and the Proposed Bylaws; |
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| | ● | “public shareholders” means holders of public shares, whether acquired in PowerUp’s initial public offering or acquired in the secondary market; |
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| | ● | “public shares” means the currently outstanding 577,644 Class A ordinary shares of PowerUp sold as part of the PowerUp units in its initial public offering, whether acquired in PowerUp’s initial public offering or acquired in the secondary market; |
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| | ● | “public warrants” means the redeemable warrants to purchase Class A ordinary shares of PowerUp sold as part of the units in its initial public offering or acquired in the secondary market; |
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| | ● | “record date” means December 24, 2024; |
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| | ● | “redemption” means each redemption of public shares for cash pursuant to the Existing Governing Documents; |
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| | ● | “Rule 144” means Rule 144 under the Securities Act; |
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| | ● | “Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002; |
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| | ● | “SEC” means the Securities and Exchange Commission; |
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| | ● | “Second Amendment Agreement” means that certain Second Amendment Agreement, dated October 9, 2024, by and among PowerUp, Merger Sub, Sponsor, Seller Representative, and Aspire; |
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| | ● | “Section 11” means Section 11 of the Securities Act; |
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| | ● | “Securities Act” means the Securities Act of 1933, as amended; |
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| | ● | “Significant Aspire Holders” means (i) all officers and directors of Aspire and (ii) all Aspire Stockholders that are beneficial owners of at least 5% of Aspire Common Stock and Aspire Preferred Stock; |
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| | ● | “PowerUp” “we,” “us” or “our” means PowerUp Acquisition Corp., a Cayman Islands exempted company, prior to the consummation of the Business Combination, and “we,” “us,” or “our” means New Aspire upon and after consummation of the Business Combination; |
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| | ● | “PowerUp Board” means PowerUp’s board of directors; |
| | ● | “PowerUp Securities” means the public shares, public warrants and units of PowerUp; |
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| | ● | “SPAC” means special purpose acquisition company; |
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| | ● | “Sponsor” means SRIRAMA Associates, LLC, a Delaware limited liability company, which is not currently controlled by, nor has substantial ties with, non-U.S. persons. Additionally, all officers and directors of the Company are U.S. citizens and U.S. residents; |
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| | ● | “Sponsor Purchase Agreement” means that certain purchase agreement, dated July 14, 2023, by and among PowerUp, Sponsor, and the Original Sponsor; |
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| | ● | “transfer agent” means Equiniti Trust Company, LLC (f/k/a American Stock Transfer & Trust Company), PowerUp’s transfer agent; |
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| | ● | “Treasury Regulations” means the United States Treasury regulations promulgated under the Code; |
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| | ● | “Trust Account” means the trust account established at the consummation of PowerUp’s initial public offering that holds the proceeds of the initial public offering and from the sale of private placement warrants; |
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| | ● | “Underwriting Agreement” means the underwriting agreement, dated February 17, 2022, by and between PowerUp and Citigroup; |
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| | ● | “units” or “PowerUp units” means the units of PowerUp, each unit representing one Class A ordinary share and one-half of one warrant, with such whole warrant representing the right to acquire one Class A ordinary share, that were offered and sold by PowerUp in its initial public offering and in its concurrent private placement; |
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| | ● | “U.S. Holder” means a beneficial owner of a PowerUp Security who or that is, for U.S. federal income tax purposes: an individual who is a citizen or resident of the United States; a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States or any state thereof or the District of Columbia; an estate whose income is subject to U.S. federal income tax regardless of its source; or a trust if (1) a U.S. court can exercise primary supervision over the administration of such trust and one or more United States persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a United States person; |
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| | ● | “Warrant Agreement” means the warrant agreement, dated as of February 17, 2022, by and between PowerUp and Equiniti Trust Company, LLC (f/k/a American Stock Transfer & Trust Company); |
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| | ● | “warrants” means the public warrants and the private placement warrants; |
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| | ● | “Working Capital Loans” means the loans, including prior loans and future loans, made by the Sponsor, any affiliate of the Sponsor, or certain of the PowerUp’s officers and directors in order to finance transaction costs in connection with an initial business combination; and |
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| | ● | “Working Capital Loan Shares” means the up to 3,750,000 shares of New Aspire Common Stock to be issued to the Sponsor and certain investors as partial consideration for entering into the Working Capital Loans. |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this proxy statement/prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including those relating to the Business Combination. The information included in this proxy statement/prospectus in relation to Aspire has been provided by Aspire and its respective management, and forward-looking statements include statements relating to our and its respective management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including those relating to the Business Combination. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:
| | ● | our ability to manage, grow, and diversify our business and execute our business initiatives and strategy; |
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| | ● | our public securities’ potential liquidity and trading; |
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| | ● | our ability to complete the Business Combination with Aspire or, if we do not consummate such Business Combination, any other initial business combination; |
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| | ● | our ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of New Aspire to grow and manage growth profitably and retain its key employees; and |
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| | ● | satisfaction or waiver of the conditions to the Business Combination including, among others: (i) the approval by our shareholders of the Condition Precedent Proposals being obtained (not waivable); (ii) approval of certain other agreements and transactions related to the Business Combination by the respective shareholders of PowerUp and Aspire; (iii) the applicable waiting period under the Hart-Scott-Rodino Act of 1976 (the “HSR Act”) relating to the Business Combination Agreement having expired or been terminated (not waivable); and (iv) the approval by Nasdaq of our initial listing application in connection with the Business Combination (not waivable); |
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| | ● | the amount of redemptions made by public shareholders; and |
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| | ● | the future business, operations and financial performance of Aspire and New Aspire. |
The forward-looking statements contained in this proxy statement/prospectus are based on current expectations, assumptions, and beliefs concerning future developments and their potential effects on us and/or Aspire. There can be no assurance that future developments affecting us and/or Aspire will be those that we and/or Aspire have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control or the control of Aspire) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to:
| | ● | the occurrence of any event, change or other circumstances, including the outcome of any legal proceedings that may be instituted against PowerUp and Aspire following the announcement of the Business Combination Agreement and the transactions contemplated therein, that could give rise to the termination of the Business Combination Agreement; |
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| | ● | our ability to complete the Business Combination or any other business combination prior to February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination); |
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| | ● | risks related to redemptions made by public shareholders; |
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| | ● | the risk that the Business Combination disrupts current plans and operations of Aspire as a result of the announcement and consummation of the Business Combination; |
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| | ● | costs related to the Business Combination; |
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| | ● | the ability to obtain and/or maintain the listing of New Aspire’s Common Stock and the warrants on Nasdaq, and the potential liquidity and trading of such securities; |
| | ● | changes in applicable laws or regulations; |
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| | ● | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Business Combination, and New Aspire’s ability to attract and retain key personnel; |
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| | ● | PowerUp officers and directors allocating their time to other businesses and potentially having conflicts of interest with PowerUp’s business or in approving the Business Combination; |
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| | ● | macroeconomic conditions, including those resulting from the global COVID-19 pandemic; |
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| | ● | failure to maintain adequate operational and financial resources or raise additional capital or generate sufficient cash flows; |
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| | ● | cyber-attacks and security vulnerabilities; |
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| | ● | risks related to the business, operations, and financial performance of Aspire, including: |
| | | ● | Aspire’s limited operating history and lack of products approved for commercial sale; |
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| | | ● | Aspire’s significant losses, expectation to continue to incur significant losses, and lack of history of revenue from product sales; |
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| | | ● | Aspire’s requirement for substantial additional financing to pursue adequately its business objectives; |
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| | | ● | the regulatory landscape that applies to Aspire’s product candidates; |
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| | | ● | Aspire’s limited experience designing and implementing clinical trials; |
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| | | ● | delays and disruptions in completing the development of product candidates; |
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| | | ● | the lengthy and time-consuming FDA regulatory approval process; |
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| | | ● | the expensive, time-consuming, and difficult to design and implement nature of clinical trials, and their uncertain outcome; |
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| | | ● | the commercial feasibility and acceptance of our products; |
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| | | ● | dependence on third-party collaborators, including but not limited to reliance on third-party manufacturers; |
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| | | ● | Aspire’s ability to develop, manufacture, market, and distribute product candidates other than Instaprin; |
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| | | ● | being subject to manufacturing risks, any of which could substantially increase costs and limit supply of product candidates; |
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| | | ● | Aspire’s ability to obtain and maintain adequate patent protection for its product candidates and Instaprin; |
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| | | ● | lawsuits to protect or enforce Aspire’s intellectual property; |
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| | | ● | dependence on key personnel, including the ability to recruit and retain qualified management and technical personnel; |
| | | ● | substantial competition that may result in others discovering, developing, or commercializing products before or more successfully than Aspire; |
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| | | ● | Aspire’s ability to gain market acceptance of its products among physicians, patients, hospitals, and others in the medical community; |
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| | | ● | significant fluctuations of the price of New Aspire Common Stock following the Business Combination; and |
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| | | ● | New Aspire’s management team having no experience managing a public company; and |
| | ● | other factors detailed under the section entitled “Risk Factors.” |
Forward-looking statements should be considered in light of these factors and the factors described elsewhere in this proxy statement/prospectus, including in the sections entitled “Risk Factors,” “Aspire’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “PowerUp’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should read these factors and the other cautionary statements made in this proxy statement/prospectus as being applicable to all related forward-looking statements wherever they appear in this proxy statement/prospectus. It is not possible to predict or identify all such risks. Neither we nor Aspire undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable law.
Before any shareholder grants its proxy or instructs how its vote should be cast or vote on the proposals to be put to the extraordinary general meeting, or makes a decision with respect to redemption of its public shares, such shareholder should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect us.
QUESTIONS AND ANSWERS FOR SHAREHOLDERS OF PowerUp
The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the proposals to be presented at the extraordinary general meeting, including with respect to the Business Combination. The following questions and answers do not include all the information that may be important to PowerUp’s shareholders. We urge shareholders to read this proxy statement/prospectus, including the annexes and the other documents referred to herein, carefully and in their entirety to fully understand the Business Combination and the voting procedures for the extraordinary general meeting, which will be held at [●], on [●], at the offices of [●] and virtually via live webcast at [●], unless the extraordinary general meeting is adjourned.
| Q: | Why am I receiving this proxy statement/prospectus? |
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| A: | PowerUp shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Business Combination Agreement and approve the transactions contemplated thereby, including the Business Combination. In accordance with the terms and subject to the conditions of the Business Combination Agreement, among other things, PowerUp will complete the PowerUp Domestication and, after the PowerUp Domestication, on the Closing Date, the parties will complete the merger of Merger Sub with and into Aspire, pursuant to which each share of Aspire Common Stock issued and outstanding immediately prior to the Effective Time, shall be converted into the right to receive a number of shares of duly authorized, validly issued, fully paid and nonassessable shares of New Aspire Common Stock with an aggregate value equal to (a) $350 million less (b) the amount by which Aspire’s cash at Closing is less than the Minimum Cash Condition (but only in the event the Minimum Cash Condition is waived by PowerUp), if any, less (c) Aspire’s Indebtedness at Closing. For further details, see “Business Combination Proposal — Consideration to Aspire Stockholders in the Business Combination.” |
A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A and you are encouraged to read the Business Combination Agreement in its entirety.
The approval of each of the Business Combination Proposal, the Advisory Charter Proposals, the Omnibus Incentive Plan Proposal, the Nasdaq Proposal, the Election of Directors Proposal, and the Adjournment Proposal requires an ordinary resolution, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, and each of the Domestication Proposal and the Organizational Documents Proposal requires a special resolution under the Cayman Islands Companies Act, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.
In connection with the PowerUp Domestication, prior to the Closing Date, (i) each issued and outstanding Class A ordinary share of PowerUp will convert by operation of law, on a one-for-one basis, into shares of New Aspire Class A Common Stock; and (ii) each issued and outstanding warrant to purchase Class A ordinary shares of PowerUp will automatically represent the right to purchase one share of New Aspire Class A Common Stock at an exercise price of $11.50 per share of New Aspire Class A Common Stock on the terms and conditions set forth in the Warrant Agreement. Immediately following the PowerUp Domestication, (i) the New Aspire Class A Common Stock will be reclassified as New Aspire Common Stock; (ii) the governing documents of PowerUp will be amended and restated and become the certificate of incorporation and the bylaws of New Aspire as described in this proxy statement/prospectus; and (iii) the form of the certificate of incorporation and the bylaws will be appropriately adjusted to give effect to any amendments contemplated by the form of certificate of incorporation or the bylaws that are not adopted and approved by the PowerUp shareholders, other than the amendments to the PowerUp governing documents that are contemplated by the Organizational Documents Proposal, which is a condition to the Closing of the Business Combination. Each issued and outstanding PowerUp unit that has not been previously separated into the underlying Class A ordinary shares and the underlying one-half of one PowerUp warrant prior to the PowerUp Domestication will be cancelled and will entitle the holder thereof to one share of New Aspire Common Stock and one-half of one New Aspire warrant, with each whole warrant representing the right to purchase one share of New Aspire Common Stock at an exercise price of $11.50 per share on the terms and subject to the conditions set forth in the Warrant Agreement. No fractional warrants will be issued upon the separation of units and only whole warrants will trade. Accordingly, unless you hold at least two units of PowerUp, you will not be able to receive or trade a warrant when the units are separated. See “Domestication Proposal” for more information.
The provisions of the Proposed Governing Documents will differ in certain material respects from the Existing Governing Documents. Please see “What amendments will be made to the Existing Governing Documents of PowerUp?” below.
THE VOTE OF SHAREHOLDERS IS IMPORTANT. SHAREHOLDERS ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS.
| Q: | What proposals are shareholders of PowerUp being asked to vote upon? |
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| A: | At the extraordinary general meeting, PowerUp is asking holders of its ordinary shares to consider and vote upon fifteen (15) separate proposals: |
| | ● | a proposal to approve and adopt by ordinary resolution the Business Combination Agreement and the transactions contemplated thereby, including the Business Combination; |
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| | ● | a proposal to approve by special resolution the PowerUp Domestication; |
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| | ● | a proposal to approve by special resolution the Organizational Documents Proposal; |
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| | ● | eight (8) separate proposals to vote on, on a non-binding advisory basis by ordinary resolution, certain material differences between the Existing Governing Documents and the Proposed Governing Documents: |
| | | ● | to authorize the change in the authorized share capital of PowerUp from $35,500 divided into (i) 300,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share, to (ii) 490,000,000 shares of New Aspire Common Stock and 10,000,000 shares of New Aspire Preferred Stock; |
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| | | ● | to permit removal of a director with or without cause by the affirmative vote of the holders of at least a majority of the voting power of all of the outstanding shares of voting stock of New Aspire entitled to vote at an election of directors, voting together as a single class; |
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| | | ● | to provide that, subject to the rights of holders of any series of preferred stock, the number of directors will be fixed from time to time by a majority of the New Aspire Board; |
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| | | ● | to eliminate the ability of New Aspire stockholders to take action by written consent in lieu of a meeting; |
| | | ● | to provide that the Proposed Bylaws may be amended, altered, repealed or adopted either (x) by the affirmative vote of a majority of the New Aspire Board then in office or (y) by the approval of at least a majority of the voting power of all of the then-outstanding shares of voting stock of New Aspire; |
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| | | ● | to provide that the Proposed Charter may be amended, altered, repealed or adopted by the approval of at least two-thirds of the voting power of all of the then-outstanding shares of voting stock of New Aspire for amendments for certain provisions of the Proposed Charter relating to: (i) classification and election of the PowerUp Board, removal of directors from office, and filling vacancies on the New Aspire Board; (ii) exculpation of personal liability of a director of New Aspire and indemnification of persons serving as directors or officers of New Aspire; and (iii) amendments to the Proposed Bylaws; |
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| | | ● | to provide that, unless New Aspire otherwise consents in writing, the Court of Chancery for the State of Delaware (or, in the event that the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) will be the sole and exclusive forum for certain stockholder actions and the federal district courts of the United States shall be the exclusive forum for claims arising out of the Securities Act, provided that the exclusive forum provision in the Proposed Charter does not apply to claims arising out of the Exchange Act, for which the federal district courts of the United States are the exclusive forum; |
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| | | ● | to provide that New Aspire’s existence is perpetual; |
| | ● | a proposal to approve by ordinary resolution the issuance of shares of New Aspire Common Stock in connection with the Business Combination in compliance with the applicable listing rules of Nasdaq; |
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| | ● | a proposal to approve and adopt by ordinary resolution the 2024 Plan; |
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| | ● | a proposal to approve, as an ordinary resolution the election of seven directors to serve staggered terms on New Aspire’s board of directors; and |
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| | ● | a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary or convenient, to, among other things, permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting. |
If our shareholders do not approve each of the Condition Precedent Proposals, then unless certain conditions in the Business Combination Agreement are waived by the applicable parties to the Business Combination Agreement, the Business Combination Agreement could terminate and the Business Combination may not be consummated.
For more information, please see “Business Combination Proposal,” “Domestication Proposal,”, “Organizational Documents Proposal”, “Advisory Charter Proposals,” “Nasdaq Proposal,” “Omnibus Incentive Plan Proposal,” “Election of Directors Proposal,” and “Adjournment Proposal.”
PowerUp will hold the extraordinary general meeting to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the Business Combination and the other matters to be acted upon at the extraordinary general meeting. Shareholders of PowerUp should read this proxy statement/prospectus carefully.
After careful consideration, the PowerUp Board has determined that the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, each of the Advisory Charter Proposals, the Nasdaq Proposal, the Omnibus Incentive Plan Proposal, the Election of Directors Proposal, and the Adjournment Proposal are in the best interests of PowerUp and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.
The existence of financial and personal interests of one or more of PowerUp’s directors may result in a conflict of interest on the part of such director(s) between what such director(s) may believe is in the best interests of PowerUp and its shareholders and what such director(s) may believe is best for themselves in determining to recommend that shareholders vote for the proposals. In addition, PowerUp’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See “Business Combination Proposal — Interests of PowerUp’s Directors and Executive Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.
| Q: | Are the proposals conditioned on one another? |
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| A: | Yes. The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned upon the approval of each other. The Advisory Charter Proposals are conditioned upon the approval of the Organizational Documents Proposal. The Adjournment Proposal is not conditioned upon the approval of any other proposal. |
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| Q: | Why is PowerUp proposing the Business Combination? |
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| A: | PowerUp is a blank check company incorporated on February 9, 2021, as a Cayman Islands exempted company and formed for the purpose of a Business Combination, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which is referred to throughout this proxy statement/prospectus as the initial business combination. Based on PowerUp’s business activities, it is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash. Aspire is a privately held, early-stage biopharmaceutical company. Aspire is a Puerto Rico corporation formed in September 2021, engaged in the business of developing and marketing the disruptive technology for novel delivery mechanisms initially for “do no harm” drugs. We define “do no harm” drugs as drugs that have been on the market for a long period of time and are generally accepted in both the medical and pharmaceutical industry as having a low probability of causing patient’s harm. In addition, “do no harm” drugs do not harm patients when taken as prescribed or instructed. Most of these “do no harm” drugs are sold “over the counter,” like aspirin. Aspire develops technology that allows for medicine to flow into the bloodstream via sublingual administration instead of going through the digestive tract (as occurs with oral administration). This allows for a much faster delivery method with minimal impact on the liver. Aspire’s technology is a novel soluble drug formulation delivering full dosage with minimal impact on stomach and liver, with the potential to change the delivery method of various drugs, delivering Ph neutral, powder or granulated substances developed through its patent pending formulation, and internal process. Aspire’s patent pending launch product, Instaprin, will be an aspirin formulation which addresses cardiology and stroke emergencies, acute pain management and anti-inflammatory needs. |
Based on the PowerUp Board’s due diligence investigations of Aspire and the industry in which it operates, including the financial and other information provided by Aspire in the course of PowerUp’s due diligence investigations, the PowerUp Board believes that the Business Combination with Aspire is in the best interests of PowerUp and its shareholders and presents an opportunity to increase shareholder value. However, there is no assurance of this. See “Business Combination Proposal — The PowerUp Board’s Reasons for the Business Combination.”
Although the PowerUp Board believes that the Business Combination with Aspire presents a unique business combination opportunity and is in the best interests of PowerUp and its shareholders, the PowerUp Board did consider certain potentially material negative factors in arriving at that conclusion. These factors are discussed in greater detail in the sections entitled “Business Combination Proposal — The PowerUp Board’s Reasons for the Business Combination” and “Risk Factors — Risks Related to Aspire.”
| Q: | Did the PowerUp Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination? |
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| A: | Yes. Although PowerUp is not required to obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority (“FINRA”) or from an independent accounting firm that the transaction being contemplated is fair to PowerUp from a financial point of view unless PowerUp completes an initial business combination with an affiliated entity, the PowerUp Board received a written opinion from KPSN & Associates LLP (“KPSN”), dated August 23, 2024, which was replaced with an updated opinion dated September 4, 2024 in connection with the Amendment Agreement, as to the fairness, from a financial point of view, to PowerUp of the shares of New Aspire Common Stock to be issued on the Closing Date as the consideration in the Business Combination to the Aspire Stockholders, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by KPSN in preparing its opinion. KPSN’s opinion should not be construed as creating any fiduciary duty on KPSN’s part to any party or entity. KPSN’s opinion was not intended to be, and does not constitute, advice or a recommendation to PowerUp or Aspire, or the board of directors or any shareholder of either PowerUp or Aspire as to how to act or vote with respect to the Business Combination or related matters. This opinion is discussed in greater detail in the section entitled “Business Combination Proposal — Opinion of Financial Advisor to PowerUp” and a copy of the fairness opinion is attached to this proxy statement/prospectus as Annex H. |
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| Q: | What will the Aspire Stockholders receive in return for the Business Combination with PowerUp? |
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| A: | After giving effect to the Business Combination, Aspire will be a wholly owned subsidiary of New Aspire. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at Closing, the Aspire Stockholders shall collectively be entitled to receive, in the aggregate, a number of shares of duly authorized, validly issued, fully paid and nonassessable shares of New Aspire Common Stock with an aggregate value equal to (a) $350 million less (b) the amount by which Aspire’s cash at Closing is less than the Minimum Cash Condition (but only in the event the Minimum Cash Condition is waived by PowerUp), if any, less (c) Aspire’s Indebtedness at Closing. |
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| Q: | How will New Aspire be managed following the Business Combination? |
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| A: | Following the Closing, it is expected that the current management of Aspire will become the management of New Aspire, and the New Aspire Board will consist of seven directors, which will be divided into three classes (Class I, II and III) with each consisting of two, two, and three directors, respectively. The New Aspire Board will consist of Kraig Higginson, Michael Howe, Gary Stein, Barbara Sher, Edward Kimball, Surendra Ajjarapu, and Donald G. Fell. Please see “Management of New Aspire Following the Business Combination” for further information. |
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| Q: | What equity stake will current PowerUp shareholders and current Aspire Stockholders hold in New Aspire immediately after the consummation of the Business Combination? |
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| A: | As of the date of this proxy statement/prospectus, there are 7,765,144 ordinary shares issued and outstanding, which includes an aggregate of 7,187,500 Class A ordinary shares held by the Sponsor and the Original Sponsor (consisting of 4,317,500 Class A ordinary shares held by the Sponsor and 2,870,000 Class A ordinary shares held by the Original Sponsor), and no Class B ordinary shares issued and outstanding. In addition, as of the date of this proxy statement/prospectus, there is outstanding an aggregate of 24,138,333 warrants to acquire ordinary shares, comprised of a total of 9,763,333 private placement warrants held by the Sponsor and the Original Sponsor (consisting of 6,834,333 private placement warrants held by the Sponsor and 2,929,000 private placement warrants held by the Original Sponsor), purchased simultaneously with the consummation of the initial public offering, and 14,375,000 public warrants. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share and, following the PowerUp Domestication, will entitle the holder thereof to purchase one share of New Aspire Common Stock. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination and assuming that none of PowerUp’s outstanding public shares are redeemed in connection with the Business Combination), PowerUp’s fully diluted share capital would be 31,903,477 ordinary shares. The Sponsor holds 4,317,500 ordinary shares of PowerUp, which it acquired for less than $0.0001 per share, and the Original Sponsor holds 2,870,000 ordinary shares of PowerUp, which it acquired for approximately $0.0029 per share. However, the Merger Consideration is based on a deemed price per share of $10.00 per share. Therefore, the Sponsor and Original Sponsor could make a substantial profit after the Business Combination. The ordinary shares held by the Sponsor and Original Sponsor have an aggregate market value of approximately $43,349,025 and $32,804,100, respectively, based on the closing price of PowerUp’s Class A ordinary shares on January 7, 2025 of $11.43 per share. |
The equity stake held by our non-redeeming public shareholders, the Aspire Stockholders, and the PowerUp Initial Stockholders in New Aspire immediately following consummation of the Business Combination will depend on the number of redemptions from the Trust Account by public shareholders at the Closing as well as various other factors, as described in the assumptions set forth below. The following table illustrates varying ownership levels in New Aspire Common Stock immediately following the consummation of the Business Combination based on the varying levels of redemptions by the public shareholders. Assuming no public shareholder exercises its redemption rights and no additional shares are issued prior to Closing, the Aspire Stockholders will own approximately 75.2% of the shares of New Aspire Common Stock to be outstanding immediately after the Business Combination, public shareholders will own approximately 1.2% of the shares of New Aspire Common Stock, the Original Sponsor will own approximately 6.2% of the shares of New Aspire Common Stock, and the Sponsor will own approximately 13.6% of the shares of New Aspire Common Stock, in each case, based on the number of shares of PowerUp ordinary shares outstanding as of the Record Date. These pro forma ownership percentages also assume the issuance of up to 3,750,000 Working Capital Loan Shares. As discussed elsewhere in this proxy statement/prospectus the parties may need to obtain additional financing from other sources in order to consummate the Business Combination, which may not be available on favorable terms or at all. See “Unaudited Pro Forma Condensed Combined Financial Information” for more details. If the actual facts differ from these assumptions, the ownership percentages in New Aspire will be different.
| | | Share Ownership in New Aspire(1) | |
| | | 1 | | | 2 | | | 3 | |
| Issued and Outstanding Share Basis | | No Redemption | | | % Owned | | | 50% Redemption | | | % Owned | | | Maximum Redemption | | | % Owned | |
| PowerUp Public Shares subject to redemption | | | 577,644 | | | | 1.2 | % | | | 288,822 | | | | 0.6 | % | | | - | | | | - | % |
| PowerUp Founder Shares – Original Sponsor | | | 2,870,000 | | | | 6.2 | % | | | 2,870,000 | | | | 6.2 | % | | | 2,870,000 | | | | 6.3 | % |
| PowerUp Founder Shares – Current Sponsor | | | 4,317,500 | | | | 9.3 | % | | | 4,317,500 | | | | 9.3 | % | | | 4,317,500 | | | | 9.4 | % |
| Aspire Stockholders (2) | | | 35,000,000 | | | | 75.2 | % | | | 35,000,000 | | | | 75.7 | % | | | 35,000,000 | | | | 76.2 | % |
| Working Capital Loan Shares – Investors (3) | | | 1,750,000 | | | | 3.8 | % | | | 1,750,000 | | | | 3.8 | % | | | 1,750,000 | | | | 3.8 | % |
| Working Capital Loan Shares – Current Sponsor (4) | | | 2,000,000 | | | | 4.3 | % | | | 2,000,000 | | | | 4.3 | % | | | 2,000,000 | | | | 4.3 | % |
| Pro Forma common stock at September 30, 2024 | | | 46,515,144 | | | | 100.0 | % | | | 46,226,322 | | | | 100.0 | % | | | 45,937,500 | | | | 100.0 | % |
(1) For further details, see “Business Combination Proposal — Consideration to Aspire Stockholders in the Business Combination.”
(2) Comprises the shares of New Aspire Common Stock to be issued to the Aspire Stockholders at Closing.
(3) Comprises the Working Capital Loan Shares to be issued to the Investors at Closing.
(4) Comprises the up to 2,000,000 Working Capital Loan Shares that may be issued to the Sponsor at Closing as partial consideration for the Sponsor entering into certain Working Capital Loans, such exact number to be calculated based on the actual dollar amount of principal loaned subsequent to the date of the Business Combination Agreement. As of the date of this proxy statement/prospectus, 567,905 of these Working Capital Loan Shares are issuable at Closing.
Shareholders may experience additional dilution to the extent New Aspire issues additional shares after the Closing. The following table illustrates varying ownership levels in New Aspire Common Stock immediately following the consummation of the Business Combination based on the varying levels of redemptions by the public shareholders and assumes (a) no public shareholder exercises its redemption rights and no additional shares are issued prior to Closing, (b) the issuance of up to 14,375,000 shares of New Aspire Common Stock underlying PowerUp public warrants, (c) the issuance of up to 9,763,333 shares of New Aspire Common Stock underlying PowerUp private placement warrants (comprised of 2,929,000 private placement warrants held by the Original Sponsor and 6,834,333 private placement warrants held by the Sponsor), and (d) the issuance of 3,750,000 Working Capital Loan Shares. The Aspire Stockholders would own approximately 49.5% of the shares of New Aspire Common Stock to be outstanding immediately after the Business Combination, public shareholders, including holders of the public warrants, would own approximately 21.1% of the shares of New Aspire Common Stock, the Original Sponsor would own approximately 8.2% of the shares of New Aspire Common Stock, and the Sponsor would own approximately 18.7% of the shares of New Aspire Common Stock, in each case, based on the number of shares of PowerUp ordinary shares outstanding as of the Record Date. See “Unaudited Pro Forma Condensed Combined Financial Information” for more details. If the actual facts differ from these assumptions, the ownership percentages in New Aspire will be different.
| | | Share Ownership in New Aspire (1) | |
| | | 1 | | | 2 | | | 3 | |
| Issued and Outstanding Share Basis | | No Redemption | | | % Owned | | | 50% Redemption | | | % Owned | | | Maximum Redemption | | | % Owned | |
| PowerUp Public Shares subject to redemption | | | 577,644 | | | | 0.8 | % | | | 288,822 | | | | 0.4 | % | | | - | | | | - | % |
| PowerUp Founder Shares – Original Sponsor | | | 2,870,000 | | | | 4.1 | % | | | 2,870,000 | | | | 4.1 | % | | | 2,870,000 | | | | 4.1 | % |
| PowerUp Founder Shares – Current Sponsor | | | 4,317,500 | | | | 6.1 | % | | | 4,317,500 | | | | 6.1 | % | | | 4,317,500 | | | | 6.2 | % |
| Aspire Stockholders (2) | | | 35,000,000 | | | | 49.5 | % | | | 35,000,000 | | | | 49.7 | % | | | 35,000,000 | | | | 49.9 | % |
| Public Warrants (3) | | | 14,375,000 | | | | 20.3 | % | | | 14,375,000 | | | | 20.4 | % | | | 14,375,000 | | | | 20.5 | % |
| Private Warrants – Original Sponsor (4) | | | 2,929,000 | | | | 4.1 | % | | | 2,929,000 | | | | 4.2 | % | | | 2,929,000 | | | | 4.2 | % |
| Private Warrants – Current Sponsor (4) | | | 6,834,333 | | | | 9.7 | % | | | 6,834,333 | | | | 9.7 | % | | | 6,834,333 | | | | 9.8 | % |
| Working Capital Loan Shares – Investors (5) | | | 1,750,000 | | | | 2.5 | % | | | 1,750,000 | | | | 2.5 | % | | | 1,750,000 | | | | 2.5 | % |
| Working Capital Loan Shares – Current Sponsor (6) | | | 2,000,000 | | | | 2.9 | % | | | 2,000,000 | | | | 2.8 | % | | | 2,000,000 | | | | 2.9 | % |
| Pro Forma common stock at September 30, 2024 | | | 70,653,477 | | | | 100.0 | % | | | 70,364,655 | | | | 100.0 | % | | | 70,075,833 | | | | 100.0 | % |
(1) For further details, see “Business Combination Proposal — Consideration to Aspire Stockholders in the Business Combination.”
(2) Comprises the shares of New Aspire Common Stock to be issued to the Aspire Stockholders at Closing.
(3) Assumes exercise of 14,375,000 Public Warrants at an exercise price of $11.50 per share.
(4) Assumes exercise of 9,763,333 Private Placement Warrants at an exercise price of $11.50 per share.
(5) Comprises the Working Capital Loan Shares to be issued to the Investors at Closing.
(6) Comprises the up to 2,000,000 Working Capital Loan Shares that may be issued to the Sponsor at Closing as partial consideration for the Sponsor entering into certain Working Capital Loans, such exact number to be calculated based on the actual dollar amount of principal loaned subsequent to the date of the Business Combination Agreement. As of the date of this proxy statement/prospectus, 567,905 of these Working Capital Loan Shares are issuable at Closing.
| Q: | How is the payment of the deferred underwriting commissions going to affect the amount left in the Trust Account upon the completion of the Business Combination? |
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| A: | Citigroup was paid a cash underwriting discount of $0.20 per unit, or $5,000,000 in the aggregate at the closing of the initial public offering. Citigroup agreed to defer the cash underwriting discount of $0.20 per share related to the over-allotment to be paid upon the closing of an initial business combination ($750,000 in the aggregate). In addition, Citigroup was originally entitled to a deferred underwriting commissions of $0.35 per unit, or $10,062,500 from the closing of the initial public offering. The total deferred fee was $10,812,500 consisting of the $10,062,500 deferred portion and the $750,000 cash discount was agreed to be deferred until the closing of an initial business combination. The deferred fee was to become payable to the underwriters from the amounts held in the Trust Account solely if the Company completed an initial business combination, subject to the terms of the underwriting agreement. On June 28, 2023, the underwriters agreed to waive their entitlement to the deferred underwriting commissions of $10,812,500 in accordance with the Underwriting Agreement. As a result, $10,812,500 was recorded to additional paid-in capital in relation to the waiver of the deferred underwriting discount in the accompanying financial statements. As a result of the deferral, there will be no payment of the deferred underwriting commissions, and the amount left in the Trust Account upon the completion of the Business Combination will not be affected. PowerUp was not made aware of the reasons why Citigroup waived the deferred underwriting commission fee and there was no consideration exchanged for the waiver. Citigroup has not performed any additional services for PowerUp after the IPO and is not expected to perform any additional services following the consummation of the Business Combination. |
| Q: | How has the announcement of the Business Combination affected the trading price of the PowerUp securities? |
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| A: | On August 29, 2024, the trading date preceding the announcement of the Business Combination, the closing prices per unit, public share, and public warrant as reported by Nasdaq were $11.11, $11.23, and $0.0601, respectively. As of December 24, 2024, the record date for the extraordinary general meeting, the closing price for each unit, ordinary share and redeemable warrant was $11.44, $11.50, and $0.0299, respectively. Holders of PowerUp’s securities should obtain current market quotations for the securities. The market price of PowerUp’s securities could vary at any time prior to Closing. |
| Q: | Why is PowerUp proposing the PowerUp Domestication? |
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| A: | The PowerUp Board believes that there are significant advantages to us that will arise as a result of a change of our domicile to Delaware. Further, the PowerUp Board believes that any direct benefit that the DGCL provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. The PowerUp Board believes that there are several reasons why a transfer by way of continuation to Delaware is in the best interests of PowerUp and its shareholders, including, (i) the prominence, predictability and flexibility of the DGCL, (ii) Delaware’s well-established principles of corporate governance, and (iii) the increased ability for Delaware corporations to attract and retain qualified directors. Each of the foregoing are discussed in greater detail in the section entitled “Domestication Proposal — Reasons for the PowerUp Domestication.” |
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| | To effect the PowerUp Domestication, PowerUp will file an application for deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and file a certificate of corporate domestication and a certificate of incorporation with the Secretary of State of the State of Delaware, under which PowerUp will be domesticated and continue as a Delaware corporation. |
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| | The approval of the Domestication Proposal is a condition to closing the Business Combination under the Business Combination Agreement. The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Act, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal. |
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| Q: | Why did PowerUp propose the 2024 Extension Amendment Proposal? |
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| A: | The purpose of the 2024 Extension Amendment Proposal was to allow PowerUp more time to complete an initial business combination. The PowerUp Board believed that there was not sufficient time to complete an initial business combination by May 23, 2024. Therefore, the PowerUp Board determined that it was in the best interests of PowerUp and its shareholders to amend the Existing Governing Documents to extend the date that PowerUp has to consummate a business combination in order to provide its shareholders with the chance to participate in an investment opportunity. Accordingly, the PowerUp Board proposed to extend the date by which PowerUp must consummate a business combination, from May 23, 2024 to February 17, 2025. The 2024 Extension Amendment Proposal was approved by PowerUp’s shareholders at the 2024 Extension Meeting. For more information regarding the 2024 Extension Amendment Proposal and the 2024 Extension Meeting, please see the definitive proxy statement filed by PowerUp with the SEC on May 1, 2024. |
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| Q: | Why did PowerUp propose the NTA Proposal? |
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| A: | The adoption of the proposed amendments to remove the net asset test limitation from PowerUp’s Amended and Restated Memorandum and Articles of Association was proposed in order to facilitate the consummation of an initial business combination, by removing the limitation on its ability to consummate an initial business combination if PowerUp would have less than $5,000,001 in net tangible assets prior to or upon consummation of such initial business combination. The purpose of the net asset test limitation was initially to ensure that PowerUp’s ordinary shares are not deemed to be a “penny stock” pursuant to Rule 3a51-1 under the Exchange Act. Because the ordinary shares would not be deemed to be a “penny stock” pursuant to other applicable provisions of Rule 3a51-1 under the Exchange Act, PowerUp proposed the NTA Proposal so that it may consummate an initial business combination even if it does not have at least $5,000,001 in net tangible assets prior to or upon consummation of such initial business combination. If PowerUp redeems its public shares in an amount in excess of the current redemption limitation and its securities do not meet Nasdaq’s continued listing requirements, Nasdaq may delist PowerUp’s securities from trading on its exchange. If Nasdaq delists any of PowerUp’s securities from trading on its exchange and it is not able to list such securities on another approved national securities exchange, PowerUp expects that such securities could be quoted on an over-the-counter market. If this were to occur, PowerUp could face significant material adverse consequences, including: (i) a limited availability of market quotations for PowerUp’s securities, (ii) reduced liquidity for PowerUp’s securities, (iii) a determination that PowerUp’s public shares are “penny stocks” which will require brokers trading in PowerUp’s public shares to adhere to more stringent rules, including being subject to the depository requirements of Rule 419 of the Securities Act, and possibly result in a reduced level of trading activity in the secondary trading market for PowerUp’s securities, (iv) a decreased ability to issue additional securities or obtain additional financing in the future, and (v) a less attractive acquisition vehicle to a target business in connection with an initial business combination. The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” PowerUp’s public shares, units and warrants qualify as covered securities under such statute. If PowerUp were no longer listed on Nasdaq, its securities would not qualify as covered securities under such statute and it would be subject to regulation in each state in which it offers its securities. See “Risk Factors – Nasdaq may not list New Aspire’s securities on its exchange, which could limit investors’ ability to make transactions in New Aspire’s securities and subject New Aspire to additional trading restrictions” for more information. The NTA Proposal was approved by PowerUp’s shareholders at the 2024 Extension Meeting. For more information regarding the NTA Proposal and the 2024 Extension Meeting, please see the definitive proxy statement filed by PowerUp with the SEC on May 1, 2024. |
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| Q: | What amendments will be made to the Existing Governing Documents of PowerUp? |
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| A: | The consummation of the Business Combination is conditioned upon, among other things, the PowerUp Domestication. Accordingly, in addition to voting on the Business Combination, PowerUp’s shareholders also are being asked to consider and vote upon a proposal to approve the PowerUp Domestication, and replace PowerUp’s Existing Governing Documents, in each case, under the Cayman Islands Companies Act with the Proposed Governing Documents, in each case, under the DGCL, which differ from the Existing Governing Documents in the following material respects: |
| | | Existing Governing Documents | | Proposed Governing Documents |
Authorized Shares (Advisory Charter Proposal 4A) | | The share capital under the Existing Governing Documents is US$35,500 divided into 300,000,000 Class A ordinary shares, par value US$0.0001 per share, 50,000,000 Class B ordinary shares, par value US$0.0001 per share and 5,000,000 preference shares, par value US$0.0001 per share. | | Under the Proposed Charter, New Aspire will be authorized to issue 500,000,000 shares of capital stock, consisting of (a) 490,000,000 shares of common stock and (b) 10,000,000 shares of preferred stock. |
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| | | See paragraph 5 of the PowerUp Amended and Restated Memorandum of Association. | | See Article IV of the Proposed Charter. |
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Authorize the Board of Directors to Issue Preferred Stock Without Stockholder Consent (Advisory Charter Proposal 4B) | | The Existing Governing Documents authorize the issuance of up to 5,000,000 preference shares with such designation, rights and preferences as may be determined from time to time by the PowerUp Board. Accordingly, PowerUp Board is empowered under the Existing Governing Documents, without shareholder approval, to issue preference shares with dividend, or other distribution, voting, return of capital or other rights which could adversely affect the voting power or other rights of the holders of ordinary shares. | | The Proposed Charter will authorize the New Aspire Board to issue preferred stock from time to time in one or more series, and, with respect to each series, to establish the number of shares in each such series, to fix the designation, powers (including voting powers), preferences and relative, participating, optional or other special rights, if any, of each such series and any qualifications, limitations or restrictions thereof, and, subject to the rights of such series, and to increase or decrease the number of shares of any such series. |
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| | | See paragraph 5 of the PowerUp Amended and Restated Memorandum of Association and Article 3 of the PowerUp Amended and Restated Articles of Association. | | See Article IV of the Proposed Charter. |
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Stockholder Removal of Directors (Advisory Charter Proposal 4C) | | The Existing Governing Documents provide that the members of the PowerUp Board may be removed from office prior to the consummation of PowerUp’s initial business combination only by the affirmative vote of the holders of a majority of the Class B ordinary shares, and following the consummation of PowerUp’s initial business combination, by ordinary resolution. | | The Proposed Charter will provide that a director may be removed with or without cause by the affirmative vote of the holders of at least a majority of the outstanding shares entitled to vote an election of directors. |
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| | | See Article 29 of the PowerUp Amended and Restated Articles of Association. | | See Section 5.05 of the Proposed Charter. |
| | | Existing Governing Documents | | Proposed Governing Documents |
| Number of Directors (Advisory Charter Proposal 4D) | | The Existing Governing Documents provide that the number of directors of PowerUp may be increased or reduced by an ordinary resolution, being a resolution passed by a simple majority of the holders of ordinary shares, who, being present in person or by proxy and entitled to vote, cast votes at a general meeting or a resolution passed in writing unanimously. | | The Proposed Charter will provide that the number of directors will be fixed from time to time by a majority of the New Aspire Board. |
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| | | See Article 27 of the PowerUp Amended and Restated Articles of Association. | | See Section 5.02 of the Proposed Charter. |
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Shareholder/Stockholder Written Consent In Lieu of a Meeting (Advisory Charter Proposal 4E) | | The Existing Governing Documents provide that resolutions may be passed by a vote in person, by proxy at a general meeting, or by unanimous written resolution. | | The Proposed Charter will allow stockholders to vote in person or by proxy at a meeting of stockholders, but prohibit the ability of stockholders to act by written consent in lieu of a meeting. |
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| | | See Articles 22 and 23 of the PowerUp Amended and Restated Articles of Association. | | See Section 7.01 of the Proposed Charter. |
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Amend the Bylaws (Advisory Charter Proposal 4F) | | PowerUp does not have bylaws; however, the Current Articles include provisions similar to the Proposed Bylaws and amendments to the Current Articles (save for Article 29 of the Current Articles) require a special resolution, being a resolution passed by a majority of two-thirds of the holders of ordinary shares who, being present in person or by proxy and entitled to vote, cast votes at a general meeting (or a resolution passed in writing unanimously). | | The Proposed Charter will authorize the New Aspire Board to adopt, amend, alter, or repeal the Proposed Bylaws. The Proposed Bylaws can also be adopted, amended, altered or repealed by the stockholders, provided that any stockholder amendment to the Proposed Bylaws will require approval of at least a majority of the voting power of all of then-outstanding shares of voting stock of New Aspire. |
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| | | See Article 18 of the PowerUp Amended and Restated Articles of Association. | | See Article VIII of the Proposed Charter. |
Amend Certain Charter Provisions (Advisory Charter Proposal 4G) | | The Existing Governing Documents provide that, with limited exceptions, amendments to the PowerUp Amended and Restated Articles require a special resolution, being a resolution passed by a majority of two-thirds of the holders of ordinary shares who, being present in person or by proxy and entitled to vote, cast votes at a general meeting (or a resolution passed in writing unanimously). | | The Proposed Charter will provide that the affirmative vote of the holders of at least two-thirds (66 2/3%) of the voting power of all of the then outstanding shares of voting stock of New Aspire will be required for amendments of certain provisions of the Proposed Charter relating to: (i) classification and election of the PowerUp Board, removal of directors from office, and filling vacancies on the New Aspire Board, (ii) exculpation of personal liability of a director of New Aspire and indemnification of persons serving as directors or officers of New Aspire, and (iii) amendments to the Proposed Bylaws. |
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| | | See Article 18 of the PowerUp Amended and Restated Articles of Association. | | See Article XI of the Proposed Charter. |
| | | Existing Governing Documents | | Proposed Governing Documents |
| Exclusive Forum for Stockholder Actions (Advisory Charter Proposal 4H) | | The Existing Governing Documents do not include an exclusive jurisdiction provision. | | The Proposed Charter and Proposed Bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought on behalf of New Aspire; (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of New Aspire’s current or former directors, officers, or other employees to New Aspire or its stockholders; (iii) any action or proceeding asserting a claim against New Aspire or any of its current or former directors, officers, or other employees, arising out of or pursuant to any provision of the Delaware General Corporation Law, the Proposed Charter or the Proposed Bylaws; (iv) any action or proceeding to interpret, apply, enforce, or determine the validity of the Proposed Charter or the Proposed Bylaws; (v) any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and (vi) any action asserting a claim against New Aspire or any of its directors, officers, or other employees governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. These provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the Proposed Charter and Proposed Bylaws will further provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint. For the avoidance of doubt, this provision is intended to benefit and may be enforced by New Aspire, its officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying this offering |
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| | | | | See Article IX of the Proposed Charter. |
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| Provisions Related to Status as Blank Check Company (Advisory Charter Proposal 4G) | | The Existing Governing Documents set forth various provisions related to our status as a blank check company prior to the consummation of an initial business combination and provide that if we do not consummate an initial business combination (as defined in the Existing Governing Documents) by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), PowerUp will cease all operations except for the purposes of winding up and will redeem the shares issued in PowerUp’s initial public offering and liquidate its Trust Account. | | The Proposed Governing Documents do not include such provisions related to our status as a blank check company, which no longer will apply upon consummation of the Business Combination, as we will cease to be a blank check company at such time. Further, the Proposed Governing Documents do not include any provisions relating to New Aspire ongoing existence; the default under the DGCL will make New Aspire’s existence perpetual. |
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| | | See Article 49 of the PowerUp Amended and Restated Articles of Association. | | This is the default rule under the DGCL. |
| Q: | How will the PowerUp Domestication affect my ordinary shares, warrants and units? |
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| A: | In connection with the PowerUp Domestication, prior to the Closing Date, (i) each issued and outstanding Class A ordinary share of PowerUp will convert by operation of law, on a one-for-one basis, into shares of New Aspire Class A Common Stock; and (ii) each issued and outstanding whole warrant to purchase Class A ordinary shares of PowerUp will automatically represent the right to purchase one share of New Aspire Class A New Aspire at an exercise price of $11.50 per share on the terms and conditions set forth in the Warrant Agreement. Immediately following the PowerUp Domestication, (i) the New Aspire Class A Common Stock will be reclassified as New Aspire Common Stock; (ii) the governing documents of PowerUp will be amended and restated and become the certificate of incorporation and the bylaws of New Aspire as described in this proxy statement/prospectus; and (iii) the form of the certificate of incorporation and the bylaws will be appropriately adjusted to give effect to any amendments contemplated by the form of certificate of incorporation or the bylaws that are not adopted and approved by the PowerUp shareholders, other than the amendments to the PowerUp governing documents that are contemplated by the Organizational Documents Proposal, which is a condition to the Closing of the Business Combination. Each issued and outstanding unit of PowerUp that has not been previously separated into the underlying Class A ordinary share and underlying one-half of one warrant upon the request of the holder thereof, will be cancelled and will entitle the holder thereof to one share of New Aspire Common Stock and one-half of one New Aspire warrant, with such whole warrant representing the right to acquire one share of New Aspire Common Stock. No fractional warrants will be issued upon the separation of units and only whole warrants will trade. Accordingly, unless you hold at least two units of PowerUp, you will not be able to receive or trade a warrant when the units are separated. See “Domestication Proposal.” |
In accordance with the terms and subject to the conditions of the Business Combination Agreement, at Closing, the Aspire Stockholders shall collectively be entitled to receive, in the aggregate, a number of shares of duly authorized, validly issued, fully paid and nonassessable shares of New Aspire Common Stock with an aggregate value equal to (a) $350 million less (b) the amount by which Aspire’s cash at Closing is less than the Minimum Cash Condition (but only in the event the Minimum Cash Condition is waived by PowerUp), if any, less (c) Aspire’s Indebtedness at Closing. For further details, see “Business Combination Proposal — Consideration to Aspire Stockholders in the Business Combination.”
| Q: | What are the U.S. federal income tax consequences of the PowerUp Domestication and redemption to Public Shareholders and holders of PowerUp Warrants? |
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| A: | As discussed more fully under the section titled “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders,” the PowerUp Domestication will qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code. In the case of a transaction, such as the PowerUp Domestication, that qualifies as a reorganization within the meaning of Section 368(a)(1)(F) of the Code, U.S. Holders (as defined in such section) of PowerUp Class A ordinary shares or PowerUp Class B ordinary shares (collectively, “Public Shares,” and all such shareholders, “Public Shareholders”) will be subject to Section 367(b) of the Code and, as a result: |
| | ● | A U.S. Holder of Public Shares whose Public Shares have a fair market value of less than $50,000 on the date of the PowerUp Domestication, and who on the date of the PowerUp Domestication owns (actually and constructively) less than 10% of the total combined voting power of all classes of Public Shares entitled to vote and less than 10% of the total value of all classes of Public Shares, will generally not recognize any gain or loss and will generally not be required to include any part of PowerUp’s earnings in income pursuant to the PowerUp Domestication; |
| | ● | A U.S. Holder of Public Shares whose Public Shares have a fair market value of $50,000 or more on the date of the PowerUp Domestication, and who on the date of the PowerUp Domestication owns (actually and constructively) less than 10% of the total combined voting power of all classes of Public Shares entitled to vote and less than 10% of the total value of all classes of Public Shares will generally recognize gain (but not loss) on the exchange of Public Shares for shares of New Aspire Class A Common Stock pursuant to the PowerUp Domestication. As an alternative to recognizing gain, such U.S. Holders may file an election to include in income as a dividend the “all earnings and profits amount” (as defined in Treasury Regulation Section 1.367(b)-2(d)) attributable to their Public Shares, provided certain other requirements are satisfied. PowerUp does not expect to have significant cumulative earnings and profits on the date of the PowerUp Domestication; and |
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| | ● | A U.S. Holder of Public Shares who on the date of the PowerUp Domestication owns (actually and constructively) 10% or more of the total combined voting power of all classes of Public Shares entitled to vote or 10% or more of the total value of all classes of Public Shares will generally be required to include in income as a dividend the “all earnings and profits amount” (as defined in Treasury Regulation Section 1.367(b)-2(d)) attributable to its Public Shares. Any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code. PowerUp does not expect to have significant cumulative earnings and profits on the date of the PowerUp Domestication. |
Furthermore, even in the case of a transaction, such as the PowerUp Domestication, that qualifies as a reorganization under Section 368(a)(1)(F) of the Code, a U.S. Holder of Public Shares or PowerUp private or public warrants (collectively, “PowerUp Warrants”) may, in certain circumstances, still recognize gain (but not loss) upon the exchange of its Public Shares or PowerUp Warrants for (x) New Aspire Class A Common Stock or (y) New Aspire private or public warrants (collectively, “New Aspire Warrants”) pursuant to the PowerUp Domestication under the passive foreign investment company (“PFIC”) rules of the Code. Proposed Treasury Regulations with a retroactive effective date have been promulgated under Section 1291(f) of the Code which generally require that a U.S. person who disposes of stock of a PFIC (including for this purpose exchanging PowerUp Warrants for newly issued New Aspire Warrants in the PowerUp Domestication) must recognize gain equal to the excess, if any, of the fair market value of the New Aspire Class A Common Stock or New Aspire Warrants received in the PowerUp Domestication over the U.S. Holder’s adjusted tax basis in the corresponding Public Shares or PowerUp Warrants surrendered in exchange therefor, notwithstanding any other provision of the Code. Because PowerUp is a blank check company with no current active business, we believe that PowerUp may be classified as a PFIC for U.S. federal income tax purposes. As a result, these proposed Treasury Regulations, if finalized in their current form, may require a U.S. Holder of Public Shares or PowerUp Warrants to recognize gain on the exchange of such shares or warrants for New Aspire Class A Common Stock or New Aspire Warrants pursuant to the PowerUp Domestication, unless such U.S. Holder has made certain tax elections with respect to such U.S. Holder’s Public Shares. A U.S. Holder cannot currently make the aforementioned elections with respect to such U.S. Holder’s PowerUp Warrants. The tax on any such gain so recognized would be imposed at the rate applicable to ordinary income and an interest charge would apply based on complex rules designed to offset the tax deferral to such U.S. Holder on the undistributed earnings, if any, of PowerUp. It is not possible to determine at this time whether, in what form, and with what effective date, final Treasury Regulations under Section 1291(f) of the Code will be adopted. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the PowerUp Domestication, see the discussion in the section titled “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders—U.S. Holders—PFIC Considerations.”
Additionally, the PowerUp Domestication may cause Non-U.S. Holders (as defined in “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders”) to become subject to U.S. federal withholding taxes on any dividends paid in respect of such Non-U.S. Holder’s shares of New Aspire Common Stock after the PowerUp Domestication.
The tax consequences of the PowerUp Domestication are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisors on the tax consequences to them of the PowerUp Domestication, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws. For a more complete discussion of the U.S. federal income tax considerations of the PowerUp Domestication, including with respect to PowerUp Warrants, see “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders.”
| Q: | What are the material U.S. federal income tax consequences of the Business Combination to U.S. holders of Aspire Common Stock? |
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| A: | Each of Aspire and PowerUp intends for the Business Combination to qualify, and each will take the position that the Business Combination qualifies, as a “reorganization” within the meaning of Section 368(a) of Code. Assuming the Business Combination so qualifies, Aspire U.S. holders (as defined in the section titled “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders—Material U.S. Federal Income Tax Consequences of the Business Combination”) generally should not recognize gain or loss for U.S. federal income tax purposes on the receipt of shares of New Aspire Common Stock issued in the Business Combination, excluding any cash received in lieu of fractional shares of New Aspire Common Stock. The obligations of Aspire and PowerUp to complete the Business Combination are not conditioned on the receipt of opinions of U.S. tax counsel to the effect that the Business Combination will qualify as a reorganization for U.S. federal income tax purposes. If the Business Combination does not qualify as a reorganization, the Business Combination will be treated as a taxable stock sale and each Aspire U.S. holder of Aspire Common Stock will generally recognize capital gain or loss, for U.S. federal income tax purposes, on the receipt of New Aspire Common Stock issued to such holders of Aspire Common Stock and on any cash received in lieu of fractional shares in connection with the Business Combination. Please review the information in the section entitled “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders—Material U.S. Federal Income Tax Consequences of the Business Combination” for a more complete description of the material U.S. federal income tax consequences of the Business Combination to Aspire U.S. holders. The discussion of the material U.S. federal income tax consequences contained in this proxy statement/prospectus is intended to provide only a general discussion. The tax consequences of the Business Combination to any particular Aspire Stockholder will depend on that stockholder’s particular facts and circumstances. Accordingly, you are urged to consult your own tax advisor to determine your tax consequences from the Business Combination, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws in light of your particular circumstances. |
| Q: | Do I have redemption rights? |
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| A: | If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal and regardless of whether they hold public shares on the record date. If you wish to exercise your redemption rights, please see the answer to the next question: “How do I exercise my redemption rights?” |
Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.
Pursuant to the Letter Agreement, the Original Sponsor, the Sponsor, and PowerUp’s officers and directors have waived their redemption rights with respect to all of their founder shares and public shares in connection with the completion of PowerUp’s initial business combination and any proposed amendment to the Existing Governing Documents prior to the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per share redemption price. The Original Sponsor, the Sponsor, and PowerUp’s officers and directors entered into the Letter Agreement in order to induce PowerUp and the Citigroup to (i) enter into the Underwriting Agreement by and between PowerUp and Citigroup, as representative of the several underwriters (the “Underwriters”), dated February 17, 2022 (the “Underwriting Agreement”) and (ii) to proceed with the initial public offering of PowerUp, which was consummated on February 23, 2022 (the “initial public offering”). The parties to the Letter Agreement agreed that if PowerUp seeks shareholder approval of an initial business combination, then in connection with such initial business combination, they shall vote all founder shares and any public shares held by them in favor of such initial business combination (and not redeem any founder shares or public shares held by them in connection with such shareholder approval.
| Q: | How do I exercise my redemption rights? |
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| A: | In connection with the Business Combination, pursuant to the Existing Governing Documents, PowerUp’s public shareholders may request that PowerUp redeem all or a portion of such public shares for cash if the Business Combination is consummated. If you are a public shareholder and wish to exercise your right to redeem the public shares, you must: |
| | (i) | (a) hold public shares or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; |
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| | (ii) | submit a written request to Equiniti, PowerUp’s transfer agent, in which you (i) request that we redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and |
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| | (iii) | deliver your certificates for public shares (if any) along with the redemption forms to Equiniti, PowerUp’s transfer agent, physically or electronically through DTC. |
Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to [●], [●] Eastern Time, on [●] (two business days before the scheduled vote at the extraordinary general meeting) in order for their shares to be redeemed.
The address of Equiniti, PowerUp’s transfer agent, is listed under the question “Who can help answer my questions?” below.
Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. Public holders that hold their units in an account at a brokerage firm or bank must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Equiniti, PowerUp’s transfer agent, directly and instruct them to do so.
Public shareholders will be entitled to request that their public shares be redeemed for a pro rata portion of the amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination including interest earned on the funds held in the Trust Account and not previously released to us (net of taxes payable). For illustrative purposes, based on approximately $6.6 million of funds in the Trust Account and 577,644 shares subject to possible redemption, in each case, as of September 30, 2024, this would have amounted to approximately $11.43 per issued and outstanding public share. However, the proceeds deposited in the Trust Account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders. Therefore, the per share distribution from the Trust Account in such a situation may be less than originally expected due to such claims. Whether you vote, and if you do vote irrespective of how you vote, on any proposal, including the Business Combination Proposal, will have no impact on the amount you will receive upon exercise of your redemption rights. It is expected that the funds to be distributed to public shareholders electing to redeem their public shares will be distributed promptly after the consummation of the Business Combination.
Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the extraordinary general meeting, or thereafter with PowerUp’s consent until the Closing. If you deliver your shares for redemption to Equiniti, PowerUp’s transfer agent, and later decide prior to the extraordinary general meeting not to elect redemption, you may request that PowerUp’s transfer agent return the shares (physically or electronically) to you. You may make such request by contacting Equiniti, PowerUp’s transfer agent, at the phone number or address listed at the end of this section.
Any corrected or changed written exercise of redemption rights must be received by Equiniti, PowerUp’s transfer agent, prior to the vote taken on the Business Combination Proposal at the extraordinary general meeting. No request for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to Equiniti, PowerUp’s transfer agent, at least two business days prior to the scheduled vote at the extraordinary general meeting.
If a holder of public shares properly makes a request for redemption and the public shares are delivered as described above, then, if the Business Combination is consummated, we will redeem the public shares for a pro rata portion of funds deposited in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination. The redemption takes place following the PowerUp Domestication and, accordingly, it is shares of New Aspire Common Stock that will be redeemed immediately after consummation of the Business Combination. If you are a holder of public shares and you exercise your redemption rights, such exercise will not result in the loss of any warrants that you may hold.
| Q: | If I am a holder of units, can I exercise redemption rights with respect to my units? |
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| A: | No. Holders of issued and outstanding units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying public shares and public warrants, or if you hold units registered in your own name, you must contact Equiniti, PowerUp’s transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Equiniti in order to validly redeem its shares. You are requested to cause your public shares to be separated and delivered to Equiniti, PowerUp’s transfer agent, by [●], [●] Eastern Time, on [●] (two business days before the scheduled vote at the extraordinary general meeting) in order to exercise your redemption rights with respect to your public shares. |
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| Q: | If I am a holder of warrants, can I exercise redemption rights with respect to my warrants? |
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| A: | No. Holders of public warrants will not have redemption rights with respect to such warrants in connection with the Business Combination. Assuming maximum redemptions of 100% of the public shares, and using the closing warrant price on Nasdaq of $0.04 as of January 7, 2025, the aggregate fair value of public warrants that can be retained by redeeming stockholders is approximately $575,000. The actual market price of the warrants may be higher or lower on the date that warrant holders seek to sell such warrants. Additionally, PowerUp cannot assure the holders of warrants that they will be able to sell their warrants in the open market as there may not be sufficient liquidity in such securities when warrant holders wish to sell their warrants. Further, while the level of redemptions of public shares will not directly change the value of the warrants because the warrants will remain outstanding regardless of the level of redemptions, as redemptions of public shares increase, the holder of warrants who exercises such warrants will ultimately own a greater interest in New Aspire because there would be fewer shares outstanding overall. |
| Q: | How do the public warrants differ from the private placement warrants and what are the related risks for any public warrant holders post Business Combination? |
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| A: | The public warrants are identical to the private placement warrants in material terms and provisions, except that the private placement warrants will not be redeemable by New Aspire so long as they are held by the Sponsor, the Original Sponsor, or any of their permitted transferees. If the private placement warrants are held by holders other than the Sponsor, Original Sponsor, or any of their permitted transferees, private placement warrants will be redeemable by New Aspire and exercisable by the holders of such private placement warrants on the same basis as the public warrants. The Sponsor has agreed not to transfer, assign or sell any of the private placement warrants, including the New Aspire Common Stock issuable upon exercise of the private placement warrants (except to certain permitted transferees), until 30 days after the Closing. Further, the private placement warrants are not exercisable more than five years from the effective date of the registration statement for PowerUp’s initial public offering in accordance with FINRA Rule 5110(g)(8). |
Following the Closing, New Aspire may redeem your public warrants prior to their exercise at any time, including a time that may be disadvantageous to you thereby making such warrants worthless. New Aspire will have the ability to redeem outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per public warrant, provided that the closing price of New Aspire Common Stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within a 30 trading day period ending on the third trading day prior to proper notice of such redemption, provided that certain other conditions are met. If and when the warrants become redeemable, New Aspire may not exercise its redemption right unless there is a current registration statement in effect with respect to the shares of New Aspire Common Stock underlying such warrants.
Pursuant to the Warrant Agreement, New Aspire is required to maintain a current prospectus relating to those shares until the warrants expire or are redeemed. If a registration statement covering the shares issuable upon exercise of the warrants is not effective by the 60th business day after the Closing, holders of warrants may, until such time as there is an effective registration statement and during any period when New Aspire will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.
In the event New Aspire determines to redeem the warrants, holders would be notified of such redemption as described in the Warrant Agreement. New Aspire would be required to fix a date for the redemption and mail a notice of redemption not less than 30 days prior to the redemption date to the registered holders of the warrants at their last addresses as they appear on the registration books. In addition, beneficial owners of the redeemable warrants will be notified of such redemption via New Aspire posting of the redemption notice to DTC.
Redemption of the outstanding public warrants could force you to (i) exercise your public warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your public warrants at the then-current market price when you might otherwise wish to hold your public warrants, or (iii) accept the nominal redemption price which, at the time the outstanding public warrants are called for redemption, is likely to be substantially less than the market value of your public warrants. None of the private placement warrants will be redeemable by us so long as they are held by the Sponsor or its permitted transferees.
See “Description of the New Aspire Securities — Warrants — Public Shareholders’ Warrants” and “Risk Factors — Risks Related to the Business Combination and PowerUp — New Aspire may redeem a warrant holder’s unexpired warrants prior to their exercise at a time that may be disadvantageous to such warrant holder, thereby making its warrants worthless.”
| Q: | What are the material U.S. federal income tax consequences of exercising my redemption rights? |
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| A: | The receipt of cash by a Holder (as defined immediately below) of New Aspire Common Stock in redemption of such stock will be a taxable event for U.S. federal income tax purposes in the case of a U.S. Holder (as defined below in “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders—Tax Consequences to U.S. Holders That Elect to Exercise Redemption Rights”) and may be a taxable event for U.S. federal income tax purposes in the case of a Non-U.S. Holder (as defined below in “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders”). Please see the discussion below under the caption “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders—Tax Consequences to U.S. Holders That Elect to Exercise Redemption Rights,” for additional information. Additionally, because the PowerUp Domestication will occur prior to the redemption of any beneficial owners (“Holders”) of Class A ordinary shares of PowerUp and PowerUp private or public warrants, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of Section 367 of the Code as well as potential tax consequences of the U.S. federal income tax rules relating to PFICs. The tax consequences of Section 367 of the Code and the PFIC rules are discussed more fully below under “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders—U.S. Holders.” All Holders should consult with, and rely solely upon, their own tax advisors with respect to the U.S. federal income tax consequences of the transaction, including exercising such redemption rights. |
| Q: | What happens to the funds deposited in the Trust Account after consummation of the Business Combination? |
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| A: | Following the closing of PowerUp’s initial public offering, an amount equal to $294.7 million ($10.25 per unit) of the net proceeds from PowerUp’s initial public offering and the sale of the private placement warrants was placed in the Trust Account. On May 18, 2023, PowerUp held the 2023 Extension Meeting. In connection with the 2023 Extension Meeting, a total of 242 PowerUp shareholders elected to redeem an aggregate of 26,946,271 public shares representing approximately 93.7% of the then outstanding Class A ordinary shares. As a result, approximately $284 million (approximately $10.55 per public share) was removed from the Trust Account to pay such holders and PowerUp had approximately $20 million left in its Trust Account, all of which was held in U.S. government treasury securities. On May 22, 2024, PowerUp held the 2024 Extension Meeting. In connection with the 2024 Extension Meeting, a total of 84 PowerUp shareholders elected to redeem an aggregate of 1,226,085 public shares representing approximately 68.0% of the then outstanding public shares. As a result, approximately $13.8 million (approximately $11.24 per public share) was removed from the Trust Account to pay such holders and PowerUp had approximately $6.5 million left in its Trust Account, all of which is held in an interest-bearing demand deposit account at a bank. These funds will remain in the Trust Account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (i) the completion of an initial business combination (including the Closing) or (ii) the redemption of all of the public shares if we are unable to complete the Business Combination or any other initial business combination by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), subject to applicable law. Following the 2024 Extension Redemption there are 577,644 public shares remaining issued and outstanding. |
Any Trust Account proceeds remaining following redemptions of public shares will be released to us to fund the operations of New Aspire following the Closing.
The parties anticipate needing to raise outside capital through debt or equity financing at, or in connection with, Closing to allow Aspire to meet the Minimum Cash Condition, to allow the combined company to meet Nasdaq initial listing requirements as well as demonstrate to Nasdaq its ability to continue to meet the exchange’s on-going listing requirements, and to allow the combined company to satisfy certain obligations and have sufficient working capital. If the parties are unsuccessful at closing a financing concurrent with the Closing of the Business Combination, the Closing likely would not occur even if PowerUp waives the $0.00 Minimum Cash Condition, unless PowerUp and/or Aspire is able to defer, or convert into equity, some or all of their expenses and liabilities. However, as of the date of the proxy statement/prospectus, no parties have affirmatively agreed to waive or convert into equity, any obligations that are, by their terms, repayable in cash. This could result in the parties electing to proceed with the Closing, and the combined company would have to reach an accommodation with its creditors and other counterparties to defer repayment of those obligations and/or the combined company having insufficient cash to fully implement its business and commercialize its products. There is no assurance that any debtors or counterparties will agree to defer obligations owed by the combined company or otherwise agree to accommodations favorable to the combined company.
Moreover, any obligations of the combined company that are not satisfied at closing, or that are deferred at the closing, would result in the combined company carrying additional liabilities on its balance sheet and, in turn, could have an adverse effect on the combined company’s ability to raise additional equity or debt financing after the closing, or result in the combined company raising capital on terms less favorable, and also would result in the combined company needing to reserve or utilize funds for deferred expenses and obligations in lieu of utilizing those funds to further its business operations. Impediments to the combined company’s access to outside capital, and matters that could cause the combined company to scale back or delay the implementation of its business plan would likely delay the on-going development of the combined company’s products and timeline by which hopes to begin generating revenue which would have an adverse effect on the combined company’s results of operations. For more information, see “Summary of the Proxy Statement/Prospectus – Sources and Uses of Funds for the Business Combination.”
| Q: | What happens if a substantial number of the public shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights? |
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| A: | The public shareholders are not required to vote “FOR” the Business Combination or vote at all in order to exercise their redemption rights and public shareholders who vote in favor of the Business Combination my also nevertheless exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of public shareholders are reduced as a result of redemptions by public shareholders. |
Following the 2024 Extension Redemption, PowerUp had approximately $6.5 million left in its Trust Account.
As a result of redemptions, the trading market for the New Aspire Common Stock may be less liquid than the market for the public shares was prior to the consummation of the Business Combination and New Aspire may not be able to meet the listing standards for Nasdaq or another national securities exchange. In addition, with less funds available from the Trust Account, the working capital infusion from the Trust Account into New Aspire’s business will be reduced. If the Trust Account proceeds that would be available to New Aspire following the redemption deadline are less than expected, New Aspire will have less cash available to pursue its anticipated growth strategies and new initiatives. As a result, New Aspire’s results of operations and financial condition may be worse than projected.
The table below presents the trust value per share to a public shareholder that elects not to redeem across a range of redemption scenarios. For purposes of calculating the redemption scenarios, the trust value date as of September 30, 2024 is used.
| | | Assuming No Redemptions | | | Assuming 50% Redemptions | | | Assuming 100% Redemptions | |
| Percentage Share Ownership in New Aspire | | | | | | | | | | | | |
| Aspire Stockholders | | | 35,000,000 | | | | 35,000,000 | | | | 35,000,000 | |
| Initial Shareholders | | | 7,187,500 | | | | 7,187,500 | | | | 7,187,500 | |
| PowerUp public shareholders | | | 577,644 | | | | 288,822 | | | | - | |
| Value of the Shares Owned by Non-Redeeming Shareholders | | | | | | | | | | | | |
| Total Shares Outstanding Excluding Warrants (1) | | | 42,765,144 | | | | 42,476,322 | | | | 42,187,500 | |
| Total Equity Value Post-Redemptions (2) | | $ | 6,601,000 | | | $ | 3,300,500 | | | $ | - | |
| Per Share Value | | $ | 0.15 | | | $ | 0.08 | | | $ | - | |
(1) Includes the number of shares of New Aspire Common Stock to be held by (i) the Aspire Stockholders, (ii) the Initial Shareholders, and (iii) the PowerUp public shareholders. Does not include the issuance of up to (i) 14,375,000 shares upon exercise of the Public Warrants at a price of $11.50 per share, (ii) 9,763,333 shares upon exercise of the Private Placement Warrants at a price of $11.50 per share, or (iii) up to 3,750,000 Working Capital Loan Shares.
(2) Represents the total value of the New Aspire Common Stock calculated by multiplying the number of Total Shares Outstanding Excluding Warrants by the Per Share Value.
As indicated above, the percentage of the total number of outstanding shares of New Aspire Common Stock that will be owned by PowerUp’s public shareholders as a group and by the other holders presented in the tables will vary based on the number of public shares for which the holders thereof request redemption in connection with the Business Combination and the number of shares of New Aspire Common Stock issued in any additional financing. The table and footnote above illustrate varying ownership levels in New Aspire, as well as possible sources and extents of dilution for non-redeeming public stockholders. All of the scenarios assume that no additional capital is contributed and that the funds in the trust account are the only source of capital. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by PowerUp’s existing shareholders in New Aspire will be different.
| Q: | What conditions must be satisfied to complete the Business Combination? |
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| A: | The consummation of the Business Combination is conditioned upon, among other things, (i) the approval by the PowerUp shareholders of the Condition Precedent Proposals being obtained (not waivable); (ii) the applicable waiting period under the HSR Act relating to the Business Combination having expired or been terminated (not waivable); (iii) the completion of the offer to redeem the public shares of PowerUp (not waivable); (iv) the New Aspire Common Stock to be issued in connection with the Business Combination having been approved for listing on Nasdaq (not waivable); (v) that Aspire meet the Minimum Cash Condition; (vi) the approval of the Business Combination Agreement and the Business Combination by Aspire’s stockholders (not waivable); (vii) the proxy statement/prospectus being declared effective by the SEC (not waivable); and (viii) the members of the Post-Closing PowerUp Board having been elected or appointed consistent with the Business Combination Agreement. Conditions to the closing are waivable except as indicated above and elsewhere in this proxy statement/prospectus. Unless the conditions to the Business Combination are waived by the applicable parties to the Business Combination Agreement, if such conditions are not satisfied the Business Combination Agreement could terminate and the Business Combination may not be consummated. |
For more information about conditions to the consummation of the Business Combination, see “Business Combination Proposal — Conditions to Closing of the Business Combination.”
| Q: | When do you expect the Business Combination to be completed? |
| A: | It is currently expected that the Business Combination will be consummated in the fourth quarter of 2024. This date depends on, among other things, the approval of the proposals to be put to PowerUp shareholders at the extraordinary general meeting. However, such extraordinary general meeting could be adjourned if the Adjournment Proposal is adopted by our shareholders at the extraordinary general meeting and we elect to adjourn the extraordinary general meeting to a later date or dates to consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates (A) to the extent necessary or convenient to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to PowerUp shareholders or, if as of the time for which the extraordinary general meeting is scheduled, there are insufficient PowerUp ordinary shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the extraordinary general meeting or (B) in order to solicit additional proxies from PowerUp shareholders in favor of one or more of the proposals at the extraordinary general meeting. For a description of the conditions for the completion of the Business Combination, see “Business Combination Proposal — Conditions to Closing of the Business Combination.” |
| Q: | What happens if the Business Combination is not consummated? |
| A: | PowerUp will not complete the PowerUp Domestication to Delaware unless all other conditions to the consummation of the Business Combination have been satisfied or waived by the applicable parties in accordance with the terms of the Business Combination Agreement. If the Business Combination Agreement is terminated before the Business Combination is completed, PowerUp will remain a Cayman Islands exempted company and may search for an alternate initial business combination. If PowerUp is not able to consummate the Business Combination with Aspire nor able to complete another business combination by February 17, 2025, in each case, as such date may be extended by the PowerUp Board in accordance with the Existing Governing Documents, PowerUp will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and the PowerUp Board, liquidate and dissolve, subject in each case to our obligations under the Cayman Islands Companies Act to provide for claims of creditors and the requirements of other applicable law. |
| Q: | Do I have appraisal rights in connection with the Business Combination and the proposed PowerUp Domestication? |
| A: | Neither PowerUp’s shareholders nor PowerUp’s warrant holders have appraisal rights in connection with the Business Combination or the PowerUp Domestication under the Cayman Islands Companies Act or under the DGCL. |
| Q: | What do I need to do now? |
| A: | PowerUp urges you to read this proxy statement/prospectus, including the annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder and/or warrant holder. PowerUp’s shareholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card. |
| A: | If you are a holder of record of ordinary shares on the record date for the extraordinary general meeting, you may vote in person or virtually at the extraordinary general meeting or by submitting a proxy for the extraordinary general meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage-paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the extraordinary general meeting and vote in person, obtain a valid proxy from your broker, bank or nominee. |
| Q: | If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me? |
| A: | No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal. If you decide to vote, you should provide instructions to your broker, bank or other nominee on how to vote in accordance with the information and procedures provided to you by your broker, bank or other nominee. |
| Q: | When and where will the extraordinary general meeting be held? |
| A: | The extraordinary general meeting will be held at [●], [●] Eastern Time, on [●] at the offices of [●] located at [●], and virtually via live webcast at [●], or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals. |
| Q: | Who is entitled to vote at the extraordinary general meeting? |
| A: | We have fixed the close of business on December 24, 2024 as the record date for the extraordinary general meeting. If you were a shareholder of PowerUp at the close of business on the record date, you are entitled to vote on matters that come before the extraordinary general meeting. However, a shareholder may only vote their shares if the shareholder is present in person or is represented by proxy at the extraordinary general meeting. |
| Q: | How many votes do I have? |
| A: | PowerUp shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. As of the close of business on the record date for the extraordinary general meeting, there were 7,765,144 ordinary shares issued and outstanding, of which 577,644 were issued and outstanding public shares. |
| Q: | What constitutes a quorum? |
| A: | A quorum of PowerUp’s shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if one or more shareholders who together hold a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy at the extraordinary general meeting. As of the record date for the extraordinary general meeting, 3,882,573 ordinary shares would be required to achieve a quorum. |
| Q: | What vote is required to approve each proposal at the extraordinary general meeting? |
| A: | The following votes are required for each proposal at the extraordinary general meeting: |
| | (i) | Business Combination Proposal: The approval of the Business Combination Proposal requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
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| | (ii) | Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Act, being a resolution passed by at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
| | (iii) | Organizational Documents Proposal: The approval of the Organizational Documents Proposal requires a special resolution, being a resolution passed by at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
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| | (iv) | Advisory Charter Proposals: The separate approval, on a non-binding advisory basis, of each of the Advisory Charter Proposals requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
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| | (v) | Nasdaq Proposal: The approval of the Nasdaq Proposal requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
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| | (vi) | Omnibus Incentive Plan Proposal: The approval of the Omnibus Incentive Plan Proposal requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
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| | (vii) | Election of Directors Proposal: The approval of the Election of Directors Proposal requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
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| | (viii) | Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
As of the record date, PowerUp had 7,765,144 ordinary shares issued and outstanding. PowerUp shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. 7,187,500 ordinary shares are subject to the Letter Agreement, pursuant to which the Initial Shareholders and Original Sponsor have agreed to vote all of their shares in favor of the Business Combination. For additional information regarding the Letter Agreement, see “Business Combination Proposal — Related Agreements — Letter Agreement.”
Because the Initial Shareholders have agreed to vote their aggregate 7,187,500 outstanding Class A ordinary shares in favor of each of the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Charter Proposals, the Nasdaq Proposal, the Election of Directors Proposal, and the Omnibus Incentive Plan Proposal, each of the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Charter Proposals, the Nasdaq Proposal, the Election of Directors Proposal, and the Omnibus Incentive Plan Proposal will be approved even if none of the public shares are voted in favor of any of Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Charter Proposals, the Nasdaq Proposal, the Election of Directors Proposal, and the Omnibus Incentive Plan Proposal.
| Q: | What are the recommendations of the PowerUp Board? |
| A: | The PowerUp Board believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of PowerUp and its shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” the Organizational Documents Proposal, “FOR” each of the separate Advisory Charter Proposals, “FOR” the Nasdaq Proposal, “FOR” the Omnibus Incentive Plan Proposal, “FOR” the Election of Directors Proposal, and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting. |
| | The existence of financial and personal interests of one or more of PowerUp’s directors may result in a conflict of interest on the part of such director(s) between what such director(s) may believe is in the best interests of PowerUp and its shareholders and what such director(s) may believe is best for themselves in determining to recommend that shareholders vote for the proposals. In addition, PowerUp’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See “Business Combination Proposal — Interests of PowerUp’s Directors and Executive Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations. |
| Q: | How do the Sponsor and the other Initial Shareholders intend to vote their shares? |
| A: | The Initial Shareholders have agreed to vote all their Class A ordinary shares and any other public shares it may hold in favor of all the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the Initial Shareholders own approximately 92.56% of the issued and outstanding ordinary shares. |
At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding PowerUp or its securities, the Sponsor, Original Sponsor, Aspire and/or Aspire’s or PowerUp’s respective directors, officers, advisors or affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record or beneficial holder of PowerUp’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Initial Shareholders, Aspire and/or their directors, officers, advisors or respective affiliates who have agreed to vote in favor of this transaction purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to (i) increase the likelihood of satisfaction of the requirement that the Business Combination Proposal, each Advisory Charter Proposal, the Nasdaq Proposal, the Omnibus Incentive Plan Proposal, the Election of Directors Proposal and the Adjournment Proposal are approved by a resolution of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter; (ii) increase the likelihood of satisfaction of the requirement that the Domestication Proposal and the Organizational Documents Proposal are each approved by a resolution of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter; and (iii) otherwise limit the number of public shares electing to redeem their public shares.
If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved. We will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the extraordinary general meeting or the redemption threshold.
Any such report will include descriptions of any arrangements entered into or purchases by any of the aforementioned persons.
| Q: | What interests do PowerUp’s current officers and directors, Initial Shareholders, and Aspire’s current officers and directors have in the Business Combination? |
| A: | The Initial Shareholders, certain members of the PowerUp Board and our officers, and Aspire’s officers and directors may have interests in the Business Combination that are different from or in addition to your interests. You should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things, the interests listed below: |
| | ● | in connection with PowerUp’s initial public offering, and pursuant to the terms of the Letter Agreement, our Initial Shareholders have agreed not to redeem any ordinary shares held by them in connection with a shareholder vote to approve an initial business combination; |
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| | ● | the Sponsor and PowerUp’s officers and directors will lose their entire investment in PowerUp and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by February 17, 2025 (unless such date is extended by the PowerUp Board in accordance with the Existing Governing Documents); |
| | ● | the Sponsor will pay an aggregate of $1.00 for its 4,317,500 Class A ordinary shares and its 6,834,333 private placement warrants to the Original Sponsor upon the Closing of the Business Combination. The Sponsor will pay less than $0.0001 per Class A ordinary share and has the right to acquire 6,834,333 shares of New Aspire Common Stock at a price of $11.50 per share. Thus, if the price of the stock falls significantly from the initial public offering price of $10.00 per share, our Sponsor will still receive a positive rate of return even in a scenario where our public shareholders would experience a negative rate of return in New Aspire from our initial public offering price of $10.00 per share; the Sponsor also has the ability to receive additional returns if our price rises above $11.50 per share; |
| | ● | the aggregate dollar amount that the Sponsor and its affiliates have at risk depending on the completion of an initial business combination, including the Business Combination, is approximately $50,991,337 as of January 7, 2025, which amount includes the current value of securities held and cash amounts to be paid to the Sponsor at Closing, assuming a trading price of $11.43 per PowerUp Class A ordinary share and $0.04 per PowerUp public warrants (based upon the respective closing prices of the PowerUp Class A ordinary shares and the PowerUp public warrants on Nasdaq on January 7, 2025); the aggregate amount the Sponsor has at risk consists of the value of the securities and other compensation described in the section titled “Summary of the Proxy Statement/Prospectus – Compensation Received by the Sponsor, the Original Sponsor, and Their Affiliates”; |
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| | ● | the aggregate dollar amount that the Original Sponsor and its affiliates have at risk depending on the completion of an initial business combination, including the Business Combination, is approximately $32,921,261 as of January 7, 2025, which amount includes the current value of securities held and cash amounts to be paid to the Original Sponsor at Closing, assuming a trading price of $11.43 per PowerUp Class A ordinary share and $0.04 per PowerUp public warrants (based upon the respective closing prices of the PowerUp Class A ordinary shares and the PowerUp public warrants on Nasdaq on January 7, 2025); the aggregate amount the Original Sponsor has at risk consists of the value of the securities and other compensation described in the section titled “Summary of the Proxy Statement/Prospectus – Compensation Received by the Sponsor, the Original Sponsor, and Their Affiliates”; |
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| | ● | the Sponsor acquired approximately 55.6% of the issued and outstanding ordinary shares of PowerUp for less than $0.0001 per share. However, the merger consideration is based on a deemed price per share of $10.00 per share. Therefore, the Sponsor could make a substantial profit after the Business Combination even if the New Aspire Common Stock subsequently declines in value or is unprofitable for the public shareholders, or the public shareholders experience substantial losses in their investment in New Aspire. The ordinary shares held by the Sponsor have an aggregate market value of approximately $49,349,025, based on the closing price of PowerUp’s Class A ordinary shares on January 7, 2025 of $11.43 per share, resulting in a theoretical gain of $49,349,024 (or approximately $11.43 per share); |
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| | ● | the Original Sponsor owns approximately 37.0% of the issued and outstanding ordinary shares of PowerUp, which it originally acquired for approximately $0.0029 per share. However, the merger consideration is based on a deemed price per share of $10.00 per share. Therefore, the Original Sponsor could make a substantial profit after the Business Combination even if the New Aspire Common Stock subsequently declines in value or is unprofitable for the public shareholders, or the public shareholders experience substantial losses in their investment in New Aspire. The ordinary shares held by the Original Sponsor have an aggregate market value of approximately $32,804,100, based on the closing price of PowerUp’s Class A ordinary shares on January 7, 2025 of $11.43 per share, resulting in a theoretical gain of $32,912,938 (or $11.4271 per share); |
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| | ● | the private placement warrants owned by the Initial Shareholders will be worthless if an initial business combination is not consummated; |
| | ● | the Initial Shareholders have agreed that the private placement warrants and the underlying securities will not be sold or transferred by it until after PowerUp has completed an initial business combination, subject to limited exceptions; |
| | ● | the Sponsor’s total potential ownership in New Aspire, assuming the exercise and conversion of all of securities following the consummation of the Business Combination, is estimated to comprise approximately 18.7% of outstanding New Aspire Common Stock in a no redemption scenario, and 18.9% of outstanding New Aspire Common Stock in a maximum redemption scenario (see “Unaudited Pro Forma Condensed Combined Financial Information” for more information); |
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| | ● | the Original Sponsor’s total potential ownership in New Aspire, assuming the exercise and conversion of all of securities following the consummation of the Business Combination, is estimated to comprise approximately 8.2% of outstanding New Aspire Common Stock in a no redemption scenario, and 8.3% of outstanding New Aspire Common Stock in a maximum redemption scenario (see “Unaudited Pro Forma Condensed Combined Financial Information” for more information); |
| | ● | the Sponsor is currently the owner of 4,317,500 Class A ordinary shares and 6,834,333 private placement warrants, each consisting of one Class A ordinary share and one-half of one redeemable warrant that is exercisable for one Class A ordinary share, which it purchased for $1.00 due to the Original Sponsor at the Closing of the Business Combination. If an initial business combination, such as the Business Combination, is not completed by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), PowerUp will be required to dissolve and liquidate. In such event, the PowerUp Class A ordinary shares currently held by the Sponsor, which were acquired from the Original Sponsor, will be worthless because the Sponsor has agreed to waive its rights to any liquidation distribution; |
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| | ● | the Original Sponsor is currently the owner of 2,870,000 Class A ordinary shares and 2,929,000 private placement warrants. If an initial business combination, such as the Business Combination, is not completed by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), PowerUp will be required to dissolve and liquidate. In such event, the PowerUp Class A ordinary shares currently held by the Original Sponsor will be worthless because the Original Sponsor has agreed to waive its rights to any liquidation distribution; |
| | ● | the anticipated continuation of two of our existing directors, Surendra Ajjarapu and Donald G. Fell, as directors of New Aspire. In the future each of such directors will receive any cash fees, stock options, stock awards or other remuneration that the New Aspire Board determines to pay them for their service as directors; |
| | ● | pursuant to the Business Combination Agreement, for a period of six years following the consummation of the Business Combination, we are required to (i) maintain provisions in our organizational documents providing for continued indemnification of PowerUp’s directors and officers and (ii) continue PowerUp’s directors’ and officers’ liability insurance after the Business Combination (i.e., a “tail policy”); |
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| | ● | at the Effective Time, PowerUp will issue the Sponsor up to 2,000,000 Working Capital Loan Shares as partial consideration for the Sponsor entering into certain Working Capital Loans, such exact number to be calculated based on the actual dollar amount of principal loaned subsequent to the date of the Business Combination Agreement. As of the date of this proxy statement/prospectus, 567,905 of these Working Capital Loan Shares are issuable at Closing; |
| | ● | if the Business Combination is not consummated, the Sponsor will not receive the up to 2,000,000 Working Capital Loan Shares described above, which have a total aggregate value of up to $20,000,000, with the exact amount to be determined based on the total amount shares ultimately issued to the Sponsor; |
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| | ● | if the Business Combination is not consummated, the Sponsor will not receive the $1,000,000 fee payable under the Promissory Note Fee Agreement; |
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| | ● | PowerUp is not responsible for the payment of any interest on the Working Capital Loans and is only required to repay the principal amounts of the Working Capital Loans upon the completion of an initial business combination; |
| | ● | pursuant to the Registration Rights Agreement, the Original Sponsor and its permitted transferees are entitled to registration of the shares of New Aspire Common Stock into which the founder shares will automatically convert at the time of the consummation of the Business Combination; |
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| | ● | the fact that we have provisions in our Existing Governing Documents that waive the corporate opportunities doctrine on an ongoing basis, which means that PowerUp’s officers and directors have not been obligated and continue to not be obligated to bring all corporate opportunities to PowerUp. The potential conflict of interest relating to the waiver of the corporate opportunities doctrine in our Existing Governing Documents did not, to our knowledge, impact our search for an acquisition target or prevent us from reviewing any opportunities as a result of such waiver; |
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| | ● | if the Trust Account is liquidated, including in the event PowerUp is unable to complete an initial business combination by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), the Sponsor has agreed to indemnify PowerUp to ensure that the proceeds in the Trust Account are not reduced below $10.25 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which PowerUp has entered into an acquisition agreement or claims of any third party for services rendered or products sold to PowerUp, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; |
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| | ● | the Sponsor has agreed to pay for any liquidation expenses if an initial business combination is not consummated; |
| | ● | the following individuals who are currently executive officers of Aspire are expected to become executive officers of New Aspire upon the Closing, serving in the offices set forth opposite their names below: |
| Name | | Position |
| Kraig Higginson | | Chief Executive Officer |
| Ernest Scheidemann | | Chief Financial Officer |
| Stephen Quesenberry | | General Counsel |
| | ● | Kraig Higginson and Edward Kimball, who are currently members of Aspire’s board of directors, are expected to become members of the New Aspire Board upon the Closing; |
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| | ● | members of Aspire’s management own certain convertible securities in Aspire that may benefit from the Business Combination. Mr. Higginson will own 9,489,137 shares, Mr. Scheidemann will own 588,981 shares and Mr. Quesenberry will own 2,028,712 shares. See “Certain Relationships and Related Person Transactions” for a further discussion of these agreements; and |
| | ● | effective upon Closing, New Aspire intends to enter into employment agreements with each of its NEOs. |
As a result of the foregoing interests, the Sponsor and PowerUp’s directors and officers will benefit from the completion of an initial business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public shareholders rather than liquidate.
The independent PowerUp directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, in recommending to shareholders that they approve the Business Combination, and in agreeing to vote in favor of the Business Combination. The independent PowerUp directors concluded that the potential benefits that it expected PowerUp and its shareholders to achieve as a result of the Business Combination outweighed the potential negative factors.
The existence of financial and personal interests of one or more of PowerUp’s officers and directors may result in a conflict of interest on the part of each such officer or director and may influence the PowerUp Board in making its recommendation that you vote in favor of the approval of the Business Combination. See “Business Combination Proposal — Interests of PowerUp’s Directors and Executive Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.
| Q: | What happens if I sell my PowerUp ordinary shares before the extraordinary general meeting? |
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| A: | The record date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares after the applicable record date, but before the extraordinary general meeting, unless you grant a proxy to the transferee, you will retain your right to vote at the extraordinary general meeting. |
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| Q: | May I change my vote after I have mailed my signed proxy card? |
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| A: | Yes. Shareholders of record may send a later-dated, signed proxy card to our proxy solicitor, Issuer Direct Corporation, at One Glenwood Ave, Suite 1001, Raleigh, NC 27603 prior to the vote at the extraordinary general meeting (which is scheduled to take place on [●]) or attend the extraordinary general meeting in person and vote. Shareholders also may revoke their proxy by sending a notice of revocation to our general counsel, which must be received by our general counsel prior to the vote at the extraordinary general meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote. |
| Q: | What happens if I fail to take any action with respect to the extraordinary general meeting? |
| A: | If you fail to vote with respect to the extraordinary general meeting and the Business Combination is approved by shareholders and the Business Combination is consummated, you will become a shareholder and/or warrant holder of New Aspire. If you fail to vote with respect to the extraordinary general meeting and the Business Combination is not approved, you will remain a shareholder and/or warrant holder of PowerUp. However, if you fail to vote with respect to the extraordinary general meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination. |
| Q: | What should I do if I receive more than one set of voting materials? |
| A: | Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares. |
| Q: | Who will solicit and pay the cost of soliciting proxies for the extraordinary general meeting? |
| A: | PowerUp will pay the cost of soliciting proxies for the extraordinary general meeting. PowerUp has engaged Issuer Direct Corporation (“Issuer Direct”) as proxy solicitor to assist in the solicitation of proxies for the extraordinary general meeting. PowerUp has agreed to pay Issuer Direct a fee of approximately $[12,159.73], plus disbursements, and will reimburse Issuer Direct for its reasonable out-of-pocket expenses and indemnify Issuer Direct and its affiliates against certain claims, liabilities, losses, damages and expenses. PowerUp will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of Class A ordinary shares for their expenses in forwarding soliciting materials to beneficial owners of Class A ordinary shares and in obtaining voting instructions from those owners. PowerUp’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies. |
| Q: | Where can I find the voting results of the extraordinary general meeting? |
| A: | The preliminary voting results will be announced at the extraordinary general meeting. PowerUp will publish final voting results of the extraordinary general meeting in a Current Report on Form 8-K within four business days after the extraordinary general meeting. |
| Q: | Who can help answer my questions? |
| A: | If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact: |
PowerUp Acquisition Corp.
188 Grand Street, Unit #195
New York, NY 10013
Attn: Suren Ajjarapu
Telephone No.: (347) 313-8109
You also may obtain additional information about PowerUp from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information; Incorporation by Reference.” If you are a holder of public shares and you intend to seek redemption of your public shares, you will need to deliver your public shares (either physically or electronically) to Equiniti, PowerUp’s transfer agent, at the address below prior to the extraordinary general meeting. Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to [●], [●] Eastern Time, on [●] (two business days before the scheduled vote at the extraordinary general meeting) in order for their shares to be redeemed. If you have questions regarding the certification of your position or delivery of your public shares, please contact the transfer agent at:
Equiniti Trust Company, LLC
55 Challenger Road
Ridgefield Park, NJ 07660
Attn: SPAC Support
Email: spacsupport@equiniti.com
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the extraordinary general meeting, including the Business Combination, you should read this proxy statement/prospectus, including the annexes and other documents referred to herein, carefully and in their entirety. The Business Combination Agreement is the legal document that governs the Business Combination and the other transactions that will be undertaken in connection with the Business Combination. The Business Combination Agreement is also described in detail in this proxy statement/prospectus in the section entitled “Business Combination Proposal — The Business Combination Agreement.”
The Parties to the Business Combination
PowerUp
PowerUp is a blank check company incorporated on February 9, 2021 as a Cayman Islands exempted entity for the purpose of effecting a Business Combination, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to throughout this proxy statement/prospectus as our initial business combination. Based on PowerUp’s business activities, it is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash.
On February 23, 2022, PowerUp completed its initial public offering of 28,750,000 units, including the issuance of 3,750,000 units as a result of the underwriters’ full exercise of their over-allotment option, at a price of $10.00 per unit generating gross proceeds of $287,500,000 before underwriting discounts and expenses. Each unit consisted of one Class A ordinary share and one-half of one public warrant. Each whole public warrant entitles the holder thereof to purchase one Class A ordinary share at an exercise price of $11.50 per share, subject to certain adjustments. Simultaneously with the closing of our initial public offering, we completed the private sale of 9,763,333 private placement warrants at a purchase price of $1.50 per private placement warrant, generating gross proceeds to the Company of $14,645,000.
Following the closing of PowerUp’s initial public offering, an amount equal to $294.7 million of the net proceeds from its initial public offering and the sale of the private placement warrants was placed in the Trust Account. The Trust Account may be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), which invest only in direct U.S. government treasury bills. To mitigate the risk that PowerUp might be deemed to be an investment company for purposes of the Investment Company Act, in January 2024, PowerUp instructed the trustee to liquidate the securities held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing demand deposit account at a bank until the earlier of the consummation of PowerUp’s initial business combination or its liquidation.
On May 18, 2023, PowerUp held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal to amend PowerUp’s Existing Governing Documents to extend the date by which PowerUp must consummate an initial business combination. In connection with the 2023 Extension Meeting and subsequent redemption, a total of 242 PowerUp shareholders elected to redeem an aggregate of 26,946,271 public shares representing approximately 93.7% of the then outstanding Class A ordinary shares. As a result, approximately $284 million (approximately $10.55 per public share) was removed from the Trust Account to pay such holders and PowerUp had approximately $20 million left in its Trust Account, all of which was held in U.S. government treasury bills.
On May 22, 2024, PowerUp held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal to amend PowerUp’s Existing Governing Documents to extend the date by which PowerUp must consummate an initial business combination. In connection with the 2024 Extension Meeting, a total of 84 PowerUp shareholders elected to redeem an aggregate of 1,226,085 public shares representing approximately 68.0% of the then outstanding public shares. As a result, approximately $13.8 million (approximately $11.24 per public share) was removed from the Trust Account to pay such holders and PowerUp had approximately $6.5 million left in its Trust Account, all of which is held in an interest-bearing demand deposit account at a bank.
These funds will remain in the Trust Account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (i) the completion of PowerUp’s initial business combination, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Existing Governing Documents to modify the substance and timing of our obligation to redeem 100% of the public shares if PowerUp does not complete an initial business combination by February 17, 2025, or (iii) the redemption of all of the public shares if PowerUp is unable to complete the Business Combination or any other initial business combination by February 17, 2025 (or by the end of any additional extension period if we further extend the period of time to consummate an initial business combination), subject to applicable law. Following the 2024 Extension Redemption there are 577,644 public shares remaining issued and outstanding.
PowerUp’s units, public shares and public warrants are currently listed on Nasdaq under the symbols “PWUPU,” “PWUP” and “PWUPW,” respectively.
PowerUp’s principal executive office is located at 188 Grand Street, Unit #195, New York, New York, 10013, and its telephone number is (347) 313-8109.
Aspire
Aspire is an early-stage biopharmaceutical company engaged in the business of developing and marketing the disruptive technology for novel delivery mechanisms initially for “do no harm” drugs. We define “do no harm” drugs as drugs that have been on the market for a long period of time and are generally accepted in both the medical and pharmaceutical industry as having a low probability of causing patient’s harm. In addition, “do no harm” drugs do not harm patients when taken as prescribed or instructed. Most of these “do no harm” drugs are sold “over the counter,” like aspirin. To date, Aspire has developed and acquired disruptive technologies that are a Novel Soluble Formulation meant to address emergencies, drug efficacy, dosage management, and response time. Aspire’s focus is on developing any number of products in a soluble, PH neutral, fast-acting powder or granule form that allows for rapid sublingual absorption of products. The benefits of this absorption technology are to provide nearly instant treatment impact and a high-level of dosage delivery. The Company’s patent pending delivery system includes components specifically formulated to allow rapid sublingual absorption of drugs into the blood stream, thus bypassing the gastrointestinal tract.
Aspire initially has focused on developing a delivery mechanism for aspirin, called “Instaprin.” Aspirin is over a century old and may be the most studied and accepted analgesic and anti-inflammatory. Traditionally, aspirin has been available in several forms, including effervescence, powder, capsule, and tablet. However, current aspirin applications are limited due to side effects from acidity. Aspire’s Instaprin is not metabolized through the liver. As such, Aspire believes that it is well positioned to target the current global opioid crisis due to Instaprin’s ability to deliver large doses with no dilution, occurring through absorption in the bloodstream, management believes there will be no direct harmful impact on the gastric system and its mucous membrane. Instaprin will deliver aspirin in the therapeutic range that is appropriate for the clinical condition being treated. Instaprin by virtue of sublingual administration provides an additional health benefit of minimizing gastrointestinal intolerance. Sublingual administration bypasses the liver unlike oral administration, thus preserving pharmacologically effective amounts of the drug to reach the systemic circulation. This delivery mechanism allows users to experience near-instantaneous anti-inflammatory therapeutic effects allowing for true pain management relief. Aspire plans to file Instaprin to be OTC FDA monograph compliant sometime in 2024. Additionally, Aspire plans to seek FDA 505(b)(2) Fast Track approval in early 2025 for the prescription strength Instaprin given the history of safety in Q4 of 2024 of Aspirin, which has been documented and publicized over the last 100 years. Aspire intends to rely on the voluminous scientific literature regarding the safety of aspirin. Aspire’s dosing of its prescription products follows the standard, FDA-approved doses of 82 mg and 325 mg of Aspirin (which are both available currently over-the-counter). Aspire anticipates offering its prescription strength products at a premium price, versus the market price for aspirin that is currently available over-the-counter.
Current Development Status of Instaprin
Aspire’s cGMP batch of patent-pending Instaprin is currently being manufactured by Glatt Air Techniques, Inc. (“Glatt”) in its New Jersey facility. Glatt will be using this batch to finalize the packaging and manufacturing process, and to provide the products to be used in the upcoming clinical tests. Glatt’s scientific team will also be conducting the stability testing required by the FDA on this batch to determine product shelf life. This is in addition to prior similar initial testing done in 2022 by Glatt which provided important background data on the stability and manufacturing process for Instaprin.
Aspire’s consultants are currently completing (1) a comprehensive review of relevant regulatory issues and regulatory strategy (including regulations, guidance documents, FDA reviews of approved NDAs for other relevant products, Pediatric Research Equity Act requirements, FDA’s trade name approval requirements, opportunities for accelerated regulatory processes, etc.), (2) a comprehensive summary of relevant safety, efficacy and pharmacokinetic data to support IRB approvals, IND, and 505(b)(2) NDA approval, (3) a target product profile (including product description, composition, strength, route of administration, prescription v. OTC, indications, dosing and claims to differentiate from other aspirin products), and (4) an integrated product development plan (including plans to support each module of an NDA submission: CMC, preclinical safety, human PK, clinical safety, clinical efficacy, timelines, critical path, Gantt chart, etc.). These reviews are all being done in preparation for Aspire’s pre-IND meeting with the FDA, its clinical testing, and its NDA.
Aspire plans to conduct an in vivo single-dose bioavailability study in healthy human volunteers in approximately March 2025 (“Trial 1”). This clinical trial will evaluate pharmacokinetic endpoints including but not limited to maximum concentrations of aspirin and/or its metabolites in plasma (“Cmax”), time of maximum concentrations (“Tmax”), and area under the time curve concentrations (“AUC”) following sublingual dosing of two different pharmaceutical formulations of Instaprin compared to standard oral aspirin. Pharmacodynamic effect on serum thromboxane B2 (TXB2, a measure of platelet inhibition) will be evaluated as a secondary endpoint. Data from this bioavailability study will be used to select the optimal pharmaceutical formulation of Instaprin and to design a pivotal Trial 2 to support filing of an NDA. Trial 1 will be exempt from Investigational New Drug (IND) filing requirements under 21 C.F.R. 320.31(d) because it is a human bioavailability trial of an FDA-approved active ingredient that is not a new chemical entity, a radioactively labeled drug product, or cytotoxic drug product, using a dose not exceeding the dose specified in the labeling of the approved drug product, conducted in compliance with the requirements for review by an Institutional Review Board (IRB), with reserve test article samples retained by the study sponsor.
Following completion of Trial 1, Aspire plans to request a pre-IND meeting with the FDA in the second quarter of 2025 to discuss plans for continued development of Instaprin leading to submission of a section 505(b)(2) NDA. Aspire plans to propose a second clinical trial (“Trial 2”) in approximately 32 healthy human volunteers to evaluate the pharmacodynamic effect of a single dose of Instaprin on platelet inhibition compared to that of standard oral aspirin. The proposed primary endpoint for Trial 2 would be time to TXB2 inhibition. Variability of TXB2 inhibition and pharmacokinetic parameters (Cmax, Tmax, AUC, etc.) for aspirin and/or its metabolites in plasma will be analyzed as secondary endpoints. Following completion of Trial 2, Aspire intends to submit a section 505(b)(2) NDA for the Instaprin product to the FDA.
Current Development Status of Other Products
Melatonin: Aspire’s scientists have developed a working formulation for a sublingually administered melatonin sleep-aid product. In the next three months, Aspire will develop and validate the manufacturing process based on this formulation. In February 2025, Aspire plans to conduct a limited pharmokinetic study using at least eight volunteers, comparing to orally administered melatonin products on the market, in order to support its claims and labeling. No FDA approval is required for Melatonin, which is sold as a supplement. Melatonin is a wildly popular sleep aid and Aspire has begun exploring licensing possibilities and has also begun discussions with a manufacturing facility in Puerto Rico. This formulation will be patent protected in due course.
Vitamins: Aspire’s scientists have developed a working formulation for sublingually administered vitamins D, E and K. In the first two quarters of 2025, Aspire intends to develop and validate a manufacturing process and conduct a limited pharmokinetic study. These products will be patent protected in due course.
Testosterone: Aspire’s scientists have developed a formulation for sublingually administered testosterone. A patent application for the formulation will be filed in the next 60 days. In the first and second quarters of 2025, Aspire will develop and validate the manufacturing process based on this formulation, and produce a cGMP batch for use in clinical testing and a stability study. Aspire will conduct a Phase One clinical test in approximately the third quarter of 2025 for pharmokinetical validation of product properties, using approximately eight volunteers, and to establish criteria for an NDA with the FDA. Aspire anticipates, based on these results, to request a pre-IND meeting with the FDA in the fourth quarter of 2025, followed by Phase Two clinical testing. Aspire anticipates this testing to use approximately 32 volunteers. Aspire intends to submit an NDA for the testosterone product under 505(b)(2) to the FDA in the first quarter of 2026. Testosterone is not a candidate for fast-track approval, so the NDA approval process will likely take as much as three years.
Semaglutide: Aspire’s scientists are in the final phases of developing a working formulation for a sublingual semaglutide product. The timeline to market will be similar to that of testosterone, above, as semaglutide is not likely a candidate for fast-track approval.
Other Products: Aspire’s scientists are currently considering formulations for anti-nausea products, anti-psychotic products, ED drugs, seizure medication, and several other classes of drugs, all using our sublingual mode of administration. We anticipate taking several of these products to market as the research and development dictates, as well as market conditions.
Upon completion of the Business Combination, Aspire plans to pursue several additional clinical trials, develop its manufacturing capabilities, and expedite the development of its product and product candidates, with the aim of addressing the significant unmet needs of large patient populations.
Aspire does not have a product available for commercial sale, has a history of losses, and may never achieve or maintain profitability. Various factors may cause differences between Aspire’s plans and expectations and its results, including: the risk that the Business Combination may not be completed in a timely manner or at all; the failure to satisfy the conditions to Closing; the effect of the announcement or pendency of the Business Combination on Aspire’s business relationships, operating results, and business; changes in the markets in which Aspire competes, including with respect to its competitive landscape, technology evolution, and regulation; changes in general economic conditions; risks related to Aspire’s limited operating history; uncertainties inherent in the execution, cost, and completion of clinical trials; risks related to regulatory review and approval and commercial development; risks associated with intellectual property protection; and the other factors discussed in the section entitled “Risk Factors” in this proxy statement/prospectus.
Aspire is a Puerto Rico corporation and was incorporated on September 28, 2021. Aspire’s principal executive office is located at 194 Candelaro Drive, #223, Humacao, Puerto Rico 00791 and its telephone number is (415) 592-7399.
PowerUp Sponsor
PowerUp’s sponsor is SRIRAMA Associates, LLC, a Delaware limited liability company. The general character of Sponsor’s business is to provide capital and a management team to special purpose acquisition companies (“SPACs”). The Sponsor is not actively involved in any other SPAC transactions, but it is managed by Surendra Ajjarapu, who has extensive experience with other SPACs. Mr. Ajjarapu is the sole member and managing member of SRIRAMA Associates, LLC. See “Information About Powerup – Directors and Officers.”
Mr. Ajjarapu’s experience with other SPACs is summarized in the following table:
| SPAC | | SPAC Status | | De-SPAC Company | | Extensions and Redemptions |
OceanTech Acquisitions I Corp. (OTEC) | | The SPAC was liquidated June 2, 2024. | | N/A | | OTEC held a special meeting of its stockholders on May 30, 2023 to extend the outside date of its original charter documents from June 2, 2023, to June 2, 2024, with twelve one-month extension options. Following the special meeting, holders of 1,035,788 shares of Class A common stock of OTEC exercised the right to redeem such shares, which represented approximately 56% of the shares subject to possible redemption. OTEC extended its outside date monthly until June 2, 2024.
For more information, see the Current Report on Form 8-K filed by OceanTech Acquisitions I Corp. with the SEC on May 30, 2023.
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Aesther Healthcare Acquisition Corp. (AEHA) | | The De-SPAC was completed in February 2023. | | Ocean Biomedical, Inc. (OCEA) | | AEHA’s initial charter documents stated that it shall complete a business combination no later than September 16, 2022, with a three-month extension option. On December 9, 2022, AEHA’s board approved an extension to consummate a business combination until March 16, 2023. On February 3, 2023, AEHA held a special meeting to approve its De-SPAC transaction, whereby the holders of 10,389,093 shares of AEHA’s Class A common stock exercised their right to redeem such shares, which represented approximately 99% of the shares subject to possible redemption. For more information, see the Current Report on Form 8-K filed by Ocean Biomedical, Inc. with the SEC on February 15, 2023. |
Semper Paratus Acquisition Corp. (LGST) | | The De-SPAC was completed in February 2024. | | Tevogen Bio Holdings, Inc. (TVGN) | | On February 3, 2023, LGST held an extraordinary general meeting of its shareholders whereby the shareholders voted to extend the date by which LGST had to consummate an initial business combination from February 8, 2023, to December 15, 2023. In connection with the meeting, shareholders holding approximately 32,116,947 ordinary shares exercised their right to redeem such shares, which represented approximately 93% of the shares subject to possible redemption. On December 14, 2023, LGST held another meeting to extend its outside date to September 15, 2024, through one three-month extension and six one-month extension. In connection with the meeting, holders of 880,873 Class A ordinary shares exercised the right to redeem such shares, which represented approximately 37% of the shares subject to possible redemption. On January 31, 2024, LGST held a meeting to approve its De-SPAC transaction, whereby the holders of 1,432,457 shares of LGST’s Class A ordinary shares exercised their right to redeem such shares, which represented approximately 95% of the shares subject to possible redemption. For more information, see the Annual Report on Form 10-K filed by Tevogen Bio Holdings, Inc. with the SEC on April 29, 2024. |
Kernel Group Holdings, Inc. (KRNL) | | The SPAC was liquidated August 5, 2024. | | N/A | | On February 3, 2023, KRNL held an extraordinary general meeting of its shareholders whereby the shareholders voted to extend the date by which KRNL had to complete a business combination from February 5, 2023, to August 5, 2023. In connection with the meeting, holders of 22,848,122 Class A ordinary shares exercised their right to redeem such shares, which represented approximately 75% of the shares subject to possible redemption. On August 3, 2023, KRNL held another meeting whereby the shareholders voted to extend the outside date from February 5, 2023 to February 5, 2024. In connection with the meeting, holders of 1,310,929 Class A ordinary shares exercised their right to redeem such shares, which represented approximately 17% of the shares subject to possible redemption. On February 1, 2024, KRNL held another meeting whereby the shareholders voted to extend the outside date from February 5, 2024 to August 5, 2024. In connection with the meeting, holders of 5,806,608 Class A ordinary shares exercised their right to redeem such shares, which represented approximately 92% of the shares subject to possible redemption. For more information, see the Annual Report on Form 10-K filed by Kernel Group Holdings, Inc. with the SEC on March 12, 2024. |
Integrated Wellness Acquisition Corp. (WEL) | | The SPAC has a pending De-SPAC transaction with Btab Ecommerce Group, Inc. | | N/A | | On June 2, 2023, WEL held an extraordinary general meeting of its shareholders whereby the shareholders voted to extend the date by which WEL had to complete a business combination from June 13, 2023 to December 13, 2023. In connection with the meeting, shareholders holding 6,108,728 of WEL’s public shares exercised their right to redeem such shares, which represented approximately 53% of the shares subject to possible redemption. On December 11, 2023, WEL held another meeting whereby the shareholders voted to extend the outside date from December 13, 2023 to December 13, 2024. In connection with the meeting, shareholders holding 1,136,155 of WEL’s public shares exercised their right to redeem such shares, which represented approximately 21% of the shares subject to possible redemption. For more information, see the Annual Report on Form 10-K filed by Integrated Wellness Acquisition Corp. with the SEC on April 2, 2024. |
The Sponsor’s roles and responsibilities include providing office space and secretarial and administrative and support services to PowerUp. However, because Sponsor and PowerUp’s management teams overlap, the management team is also able to provide day-to-day managerial assistance to PowerUp on behalf of Sponsor.
At the Closing of the Business Combination, PowerUp may issue the Sponsor up to 2,000,000 shares of New Aspire Common Stock as partial consideration for the Sponsor entering into certain Working Capital Loans, such exact number to be calculated based on the actual dollar amount of principal loaned subsequent to the date of the Business Combination Agreement. As of the date of this proxy statement/prospectus, 567,905 of these Working Capital Loan Shares are issuable at Closing.
PowerUp Merger Sub
PowerUp Merger Sub II, Inc. is a Delaware corporation and wholly owned subsidiary of PowerUp formed for the purpose of effecting the Business Combination. Merger Sub owns no material assets and does not operate any business.
Merger Sub’s principal executive office is located at 188 Grand Street, Unit #195, New York, NY 10013, and its telephone number is (347) 313-8109.
Proposals to be put to the Shareholders of PowerUp at the Extraordinary General Meeting
The following is a summary of the proposals to be put to the extraordinary general meeting of PowerUp and certain transactions contemplated by the Business Combination Agreement. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Advisory Charter Proposals are conditioned on the approval of the Organizational Documents Proposal. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. The transactions contemplated by the Business Combination Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting.
Business Combination Proposal
As discussed in this proxy statement/prospectus, PowerUp is asking its shareholders to approve by ordinary resolution the Business Combination Agreement, pursuant to which, among other things, on the Closing Date, promptly following the consummation of the PowerUp Domestication, Merger Sub will merge with and into Aspire, with Aspire surviving the merger. After giving effect to the Business Combination, Aspire shall be a wholly owned subsidiary of New Aspire. For further details, see “Business Combination Proposal — Consideration to Aspire Stockholders in the Business Combination.”
After consideration of the factors identified and discussed in the section entitled “Business Combination Proposal — The PowerUp Board’s Reasons for the Business Combination,” the PowerUp Board concluded that the Business Combination met all of the requirements disclosed in the prospectus for PowerUp’s initial public offering, including that the businesses of Aspire had a fair market value of at least 80% of the balance of the funds in the Trust Account at the time of execution of the Business Combination Agreement. For more information about the transactions contemplated by the Business Combination Agreement, see “Business Combination Proposal.”
Structure of the Business Combination
On the Closing Date, promptly following the consummation of the PowerUp Domestication, Merger Sub will merge with and into Aspire, with Aspire surviving the merger. After giving effect to the Business Combination, Aspire will be a wholly owned subsidiary of New Aspire.
Consideration to Aspire Stockholders in the Business Combination
In accordance with the terms and subject to the conditions of the Business Combination Agreement, at Closing, the Aspire Stockholders shall collectively be entitled to receive, in the aggregate, a number of shares of duly authorized, validly issued, fully paid and nonassessable shares of New Aspire Common Stock with an aggregate value equal to (a) $350 million less (b) the amount by which Aspire’s cash at Closing is less than the Minimum Cash Condition (but only in the event the Minimum Cash Condition is waived by PowerUp), if any, less (c) Aspire’s Indebtedness at Closing. For further details, see “Business Combination Proposal — Consideration to Aspire Stockholders in the Business Combination.”
Lock-Up Agreements
The Business Combination Agreement contemplates that, in connection with the Closing, PowerUp, the Sponsor, and the Significant Aspire Holders (the “Locked-Up Parties”) will enter into lock-up agreements (the “Lock-Up Agreements”) with respect to New Aspire Common Stock (the “Lock-Up Shares”) and warrants (together with the “Lock-Up Shares, the “Lock-Up Securities”) held by each such stockholder immediately following the Closing, pursuant to which, each Locked-Up Party will agree not to transfer any Lock-Up Securities until the earlier of (A) six months after the completion of the Business Combination and (B) subsequent to the Business Combination, (x) if the closing price of the New Aspire Common Stock equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, or (y) the date on which New Aspire completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of its stockholders having the right to exchange their New Aspire Common Stock for cash, securities or other property.
Non-Competition Agreements
The Business Combination Agreement contemplates that, at the Closing, the Significant Aspire Holders will enter into non-competition agreements pursuant to which they will agree not to compete with New Aspire and its respective subsidiaries, subject to certain requirements and customary conditions.
Conditions to Closing of the Business Combination
The consummation of the Business Combination is conditioned upon, among other things, (i) the approval by the PowerUp shareholders of the Condition Precedent Proposals being obtained (not waivable); (ii) the applicable waiting period under the HSR Act relating to the Business Combination having expired or been terminated (not waivable); (iii) the completion of the offer to redeem the public shares of PowerUp (not waivable); (iv) the New Aspire Common Stock to be issued in connection with the Business Combination having been approved for listing on Nasdaq (not waivable); (v) that Aspire meet the Minimum Cash Condition; (vi) the approval of the Business Combination Agreement and the Business Combination by Aspire’s stockholders (not waivable); (vii) the proxy statement/prospectus being declared effective by the SEC (not waivable); and (viii) the members of the Post-Closing PowerUp Board having been elected or appointed consistent with the Business Combination Agreement. Conditions to the closing are waivable except as indicated above and elsewhere in this proxy statement/prospectus. Unless the conditions to the Business Combination are waived by the applicable parties to the Business Combination Agreement, if such conditions are not satisfied, the Business Combination Agreement could terminate and the Business Combination may not be consummated. For further details, see “Business Combination Proposal — Conditions to Closing of the Business Combination.”
Termination of the Business Combination Agreement
The Business Combination Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including, among others, the following: (i) by mutual written consent of PowerUp and Aspire; (ii) by either PowerUp or Aspire if any of the conditions to Closing have not been satisfied or waived by August 17, 2025 (the “Outside Date”), provided that any breach or violation of any representation, warranty or covenant of the party seeking termination is not the cause of the failure of the Closing to occur by the Outside Date; (iii) by either PowerUp or Aspire if a governmental authority of competent jurisdiction has issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the Business Combination, and such order or other action has become final and non-appealable, unless the failure by PowerUp or Aspire to comply with the Business Combination Agreement was a substantial cause of—or substantially resulted in—the governmental authority taking such action; (iv) by either PowerUp or Aspire in the event of the other party’s uncured breach, if such breach would result in the failure of a closing condition (and so long as the terminating party is not also in breach under the Business Combination Agreement); (v) by PowerUp if there has been a Material Adverse Effect on Aspire following the date of the Business Combination Agreement that is uncured and continuing; and (vi) by either PowerUp or Aspire if PowerUp or Aspire holds a special meeting of its shareholders to approve the Business Combination Agreement and the Business Combination, and the required approvals related to the Business Combination Agreement and the Business Combination of either PowerUp’s shareholders or Aspire’s stockholders, as applicable, is not obtained. For further details, see “Business Combination Proposal — Termination.”
Domestication Proposal
As discussed in this proxy statement/prospectus, PowerUp will ask its shareholders to approve by special resolution the Domestication Proposal. As a condition to closing the Business Combination pursuant to the terms of the Business Combination Agreement, the PowerUp Board has unanimously approved the Domestication Proposal. The Domestication Proposal, if approved, will authorize a change of PowerUp’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware. Accordingly, while PowerUp is currently incorporated as an exempted company under the Cayman Islands Companies Act, upon the PowerUp Domestication, New Aspire will be governed by the DGCL. There are differences between Cayman Islands corporate law and Delaware corporate law as well as the Existing Governing Documents and the Proposed Governing Documents. The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Act, being a resolution passed by the holders at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. Accordingly, we encourage shareholders to carefully consult the information set out below under “Comparison of Corporate Governance and Shareholder Rights.”
For further details, see “Domestication Proposal”, “Organizational Documents Proposal” and “The Advisory Charter Proposals.”
Organizational Documents Proposal
PowerUp will ask its shareholders to approve and adopt by special resolution under the Cayman Islands Companies Act, assuming the Business Combination Proposal and the Domestication Proposal are approved and adopted, the amendment and restatement of the Existing Governing Documents by their deletion and replacement with the Proposed Organizational Documents of New Aspire, which, if approved, would take effect immediately after the PowerUp Domestication. The approval of the Organizational Documents Proposal requires a special resolution under the Cayman Islands Companies Act, being a resolution passed by holders of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.
Advisory Charter Proposals
PowerUp will ask its shareholders to consider and vote upon proposals to approve, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with SEC guidance to give shareholders the opportunity to present their separate views on important corporate governance provisions, as the following eight sub-proposals:
| | ● | Advisory Charter Proposal 4A — to increase the authorized share capital of PowerUp from US$35,500 divided into (i) 300,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share, to (ii) 490,000,000 shares of common stock, par value $0.0001 per share, of New Aspire and 10,000,000 shares of preferred stock, par value $0.0001 per share, of New Aspire. |
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| | ● | Advisory Charter Proposal 4B — to permit removal of a director with or without cause by the affirmative vote of the holders of at least a majority of the voting power of all of the outstanding shares of voting stock of New Aspire entitled to vote at an election of directors, voting together as a single class. |
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| | ● | Advisory Charter Proposal 4C — to provide that, subject to the rights of holders of any series of preferred stock, the number of directors will be fixed from time to time by a majority of the New Aspire Board. |
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| | ● | Advisory Charter Proposal 4D — to eliminate the ability of New Aspire stockholders to take action by written consent in lieu of a meeting. |
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| | ● | Advisory Charter Proposal 4E — to provide that the Proposed Bylaws may be amended, altered, repealed or adopted either (x) by the affirmative vote of a majority of the New Aspire Board then in office or (y) by the approval of at least a majority of the voting power of all of the then-outstanding shares of voting stock of New Aspire. |
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| | ● | Advisory Charter Proposal 4F — to provide that the Proposed Charter may be amended, altered, repealed or adopted by the approval of at least two-thirds of the voting power of all of the then-outstanding shares of voting stock of New Aspire for amendments for certain provisions of the Proposed Charter relating to: (i) classification and election of the New Aspire Board, removal of directors from office, and filling vacancies on the New Aspire Board, (ii) exculpation of personal liability of a director of New Aspire and indemnification of persons serving as directors or officers of New Aspire, and (iii) amendments to the Proposed Bylaws. |
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| | ● | Advisory Charter Proposal 4G — to provide that the Court of Chancery for the State of Delaware (or, in the event that the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) will be the sole and exclusive forum for certain stockholder actions, provided that the exclusive forum provision in the Proposed Charter does not apply to claims arising out of the Exchange Act for which the federal district courts of the United States are the exclusive forum. |
| | ● | Advisory Charter Proposal 4H — to eliminate certain provisions related to PowerUp’s status as a blank check company, including to remove the requirement to dissolve New Aspire and allow it to continue as a corporate entity with perpetual existence following consummation of the Business Combination. |
The Proposed Governing Documents differ in certain material respects from the Existing Governing Documents, and we encourage shareholders to carefully consult the information set out in the section entitled “Advisory Charter Proposals” and the full text of the Proposed Governing Documents of New Aspire, attached hereto as Annex C and Annex D.
Nasdaq Proposal
Our shareholders are also being asked to approve, by ordinary resolution, the Nasdaq Proposal. Our units, public shares and public warrants are currently listed on Nasdaq and, as such, we are seeking shareholder approval for issuance of New Aspire Common Stock in connection with the Business Combination pursuant to Nasdaq Rule 5635.
For additional information, see “Nasdaq Proposal.”
Omnibus Incentive Plan Proposal
Our shareholders are being asked to approve, by ordinary resolution, the Omnibus Incentive Plan Proposal. If the Omnibus Incentive Plan Proposal is approved, the 2024 Plan will become effective upon the Closing and will be used by New Aspire on a going-forward basis following the Closing. A copy of the 2024 Plan is attached to the proxy statement/prospectus as Annex E.
Election of Directors Proposal
Our shareholders are being asked to approve, by ordinary resolution, the Election of Directors Proposal to elect seven directors to serve staggered terms on New Aspire’s board of directors.
Adjournment Proposal
If, based on the tabulated vote, there are not sufficient votes at the time of the extraordinary general meeting to authorize PowerUp to consummate the Business Combination, the PowerUp Board may submit a proposal to adjourn the extraordinary general meeting to a later date or dates to consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates. For additional information, see “Adjournment Proposal.”
The Adjournment Proposal is not conditioned on any other proposal.
The PowerUp Board’s Reasons for the Business Combination
PowerUp was formed for the purpose of effecting a Business Combination, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The PowerUp Board sought to do this by utilizing the networks and industry experience of both the Original Sponsor and Sponsor and the PowerUp Board and management to identify, acquire and operate one or more businesses. The members of the PowerUp Board and management have extensive transactional experience.
As described under “Business Combination Proposal — Background to the Business Combination,” the PowerUp Board, in evaluating the Business Combination, consulted with PowerUp’s management and legal advisors. In reaching its unanimous decision to approve the Business Combination Agreement and the transactions contemplated by the Business Combination Agreement, the PowerUp Board considered a range of factors, including, but not limited to, the factors discussed below. In light of the number and wide variety of factors considered in connection with its evaluation of the proposed combination, the PowerUp Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. The PowerUp Board contemplated its decision as in the context of all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors. This explanation of PowerUp Board’s reasons for approving the combination and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the section titled “Cautionary Note Regarding Forward-Looking Statements.”
In approving the Business Combination Agreement, the PowerUp Board received a written opinion from KPSN & Associates LLP (“KPSN”), dated August 23, 2024, which was replaced with an updated opinion dated September 4, 2024 in connection with the Amendment Agreement, as to the fairness, from a financial point of view, to PowerUp of the shares of New Aspire Common Stock to be issued on the Closing Date as the consideration in the Business Combination to the Aspire Stockholders, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by KPSN in preparing its opinion.
KPSN’s opinion was prepared for the benefit of PowerUp’s board of directors and only addressed the fairness from a financial point of view to PowerUp of the shares of New Aspire Common Stock to be issued on the Closing Date as the consideration in the Business Combination to the Aspire Stockholders and does not address any other aspect or implication of the Business Combination. The summary of KPSN’s opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex H to this proxy statement/prospectus and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by KPSN in preparing its opinion. The opinion did not address the relative merits of the Business Combination as compared to any alternative business strategies or transactions that might be available to PowerUp or any other party, nor did it address the underlying business decision of the board of directors of PowerUp, its securityholders, Aspire, its securityholders, or any other party or entity to proceed with or effect the Business Combination or any terms or aspects of any voting or other agreements to be entered into in connection with the Business Combination, any potential financing for the Business Combination or the likelihood of consummation of such financing. KPSN’s opinion should not be construed as creating any fiduciary duty on KPSN’s part to any party or entity. KPSN’s opinion was not intended to be, and does not constitute, advice or a recommendation to PowerUp or Aspire, or the board of directors or any shareholder of either PowerUp or Aspire as to how to act or vote with respect to the Business Combination or related matters. Please see “Business Combination Proposal — Opinion of Financial Advisor to PowerUp” for additional information.
The PowerUp Board considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Business Combination Agreement and the transactions contemplated thereby. The PowerUp Board and management team alike were impressed with the Aspire team during the diligence process and in their own investigation of the industry. More specifically, the PowerUp Board took into consideration the following factors or made the following determinations, as applicable:
| | ● | Meets the acquisition criteria that PowerUp had established to evaluate prospective business combination targets. The PowerUp Board determined that Aspire satisfies a number of the criteria and guidelines that PowerUp established at its initial public offering, including its large addressable market, strong value proposition, significant expansion opportunity, experienced management team, and the lack of available alternative targets which met the criteria established by the PowerUp Board. |
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| | ● | Significant value creation opportunities. In addition to the organic growth opportunities described above, the PowerUp Board considered that Aspire would have the potential to add substantial value by engaging in various strategic initiatives, which may be complimentary to its core operations. |
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| | ● | Experienced management team. The PowerUp Board determined that Aspire has a proven and experienced team that is positioned to successively lead Aspire after the Business Combination. |
| | ● | Aspire’s post-Closing financial condition. The PowerUp Board also considered factors such as Aspire’s outlook, financial plan and debt structure. |
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| | ● | Valuation supported by fairness opinion, financial analysis and due diligence. The PowerUp Board determined that the fairness opinion delivered by KPSN and the valuation analysis conducted by PowerUp’s management team, based on the trading levels of comparable companies and the materials and financial projections provided by Aspire, supported the equity valuation of Aspire. As part of this determination, PowerUp’s management, PowerUp Board and legal counsel conducted due diligence examinations of Aspire and discussed with Aspire’s management the financial, operational and legal outlook of Aspire. |
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| | ● | Public company readiness. Additionally, the PowerUp Board looked for a company that would benefit from additional visibility that a public company provides, bringing access for its products to customers and partners that would not otherwise invest in a private company, to enable strategic partnerships worldwide. Further, Aspire appeared ready to become a public company within a reasonable timeline. |
The PowerUp Board also considered a variety of uncertainties, risks and other potentially negative factors relating to the Business Combination including, but not limited to, the following: redemptions, complexities related to the shareholder vote, litigation and threats of litigation and broader macro risks, including the competitive landscape, nonperformance by contract counterparties, the nature of Aspire’s business model, risk related to obtaining sufficient labor to expand Aspire’s business and the execution risk that could create difficulties for Aspire in effectively managing its growth and expanding its operations. Specifically, the PowerUp Board considered the following issues and risks:
| | ● | Risk that the benefits described above may not be achieved. The risk that the potential benefits of the Business Combination may not be fully achieved, or may not be achieved within the expected timeframe. |
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| | ● | Risk of the liquidation of PowerUp. The risks and costs to PowerUp if the Business Combination is not completed, including the risk of diverting management’s focus and resources from other business combination opportunities, which could result in PowerUp being unable to effect an initial business combination in the requisite time frame and force PowerUp to liquidate. |
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| | ● | Exclusivity. The fact that the Business Combination Agreement includes an exclusivity provision that prohibits PowerUp from soliciting other business combination proposals, which restricts PowerUp’s ability, so long as the Business Combination Agreement is in effect, to consider other potential business combinations. |
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| | ● | Risks regarding the shareholder vote. The risk that PowerUp’s shareholders may fail to provide the votes necessary to effect the Business Combination. |
| | ● | Closing conditions. The fact that completion of the Business Combination is conditioned on the satisfaction of certain Closing conditions that are not within PowerUp’s control, including approval by PowerUp’s shareholders, and approval by Nasdaq of the initial listing application in connection with the Business Combination. |
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| | ● | Potential litigation. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination. |
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| | ● | Fees and expenses. The fees and expenses associated with completing the Business Combination. |
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| | ● | Macroeconomic and seasonal risk. The risk of macroeconomic uncertainty and the effects it could have on Aspire’s operations and business. |
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| | ● | Other risk factors. Various other risk factors associated with the respective businesses of PowerUp and Aspire. |
In addition to considering the factors described above, the PowerUp Board also considered that some officers and directors of PowerUp might have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of PowerUp’s shareholders. PowerUp’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and unanimously approving, as members of the PowerUp Board, the Business Combination Agreement and the transactions contemplated thereby, including the Business Combination.
The PowerUp Board concluded that the potential benefits that it expected PowerUp and its shareholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, the PowerUp Board unanimously determined that the Business Combination Agreement, and the transactions contemplated thereby, including the Business Combination, were advisable, fair to, and in the best interests of, PowerUp and its shareholders.
The Business Combination is not structured so that approval of at least a majority of unaffiliated PowerUp shareholders is required. No unaffiliated representative has been retained to act solely on behalf of the PowerUp shareholders for purposes of negotiating the terms of the Business Combination Agreement on their behalf and/or preparing a report concerning the approval of the Business Combination. The Business Combination was unanimously approved by the PowerUp Board.
For more information about the PowerUp Board’s decision-making process concerning the Business Combination, please see “Business Combination Proposal — The PowerUp Board’s Reasons for the Business Combination.”
Related Agreements
This section describes certain additional agreements entered into or to be entered into in connection with the Business Combination Agreement.
Letter Agreement
On February 17, 2022, PowerUp entered into a letter agreement (the “Letter Agreement”) with the Original Sponsor and certain individuals party thereto (the “Insiders”), pursuant to which Original Sponsor and Insiders agreed to (i) waive their redemption rights with respect to its founder shares and public shares in connection with the completion of PowerUp’s initial business combination and (ii) waive their rights to liquidating distributions from the trust account with respect to its founder shares if PowerUp fails to complete the Business Combination (although the Original Sponsor will be entitled to liquidating distributions from the trust account with respect to any public shares it holds if PowerUp fails to complete the Business Combination within the prescribed time frame). These waivers were made at the time that the founder shares and public shares were purchased for no additional consideration. Pursuant to the Sponsor Purchase Agreement (as defined below), the Sponsor has agreed to be bound by certain terms of the Letter Agreement.
On July 14, 2023, PowerUp entered into a purchase agreement (the “Sponsor Purchase Agreement”) with SRIRAMA Associates, LLC, a Delaware limited liability company (the “Sponsor”) and PowerUp Sponsor LLC (the “Original Sponsor”), pursuant to which the Sponsor purchased from the Original Sponsor (x) 4,317,500 Class A ordinary shares and (y) 6,834,333 private placement warrants, free and clear of all liens and encumbrances (other than those contained in the Letter Agreement and the Underwriting Agreement), for an aggregate purchase price of $1.00 (the “Purchase Price”) payable at the time of an initial business combination. On August 18, 2023, the parties to the Sponsor Purchase Agreement closed the transactions contemplated thereby.
Voting Agreement
The Original Sponsor and each Insider, with respect to itself, agreed that if PowerUp seeks shareholder approval of an initial business combination, then in connection with such initial business combination, it shall vote all founder shares, any public shares and any Class A ordinary shares included in the private units held by it in favor of such initial Business Combination (including any proposals recommended by the PowerUp board of directors in connection with such initial business combination) and not redeem any founder shares or public shares held by it in connection with such shareholder approval.
Pursuant to the Sponsor Purchase Agreement, the Sponsor has agreed to be bound by the voting agreement in Section 1 of the Letter Agreement titled “Proposed Business Combination.”
Letter Agreement Lock-up
Further pursuant to the Letter Agreement, Original Sponsor and each Insider agreed that the founder shares and private placement warrants are not transferable or salable in the case of the founder shares, until the earlier of (A) one year after the completion of the Business Combination or (B) subsequent to the Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, or (y) the date on which PowerUp completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in PowerUp’s public shareholders having the right to exchange their Ordinary Shares for cash, securities or other property, and (ii) in the case of the private placement warrants, until 30 days after the completion of the Business Combination, with certain limited exceptions.
On May 18, 2023, PowerUp’s Original Sponsor elected to convert its Class B ordinary shares into Class A ordinary shares on a one-for-one basis (the “Conversion”). As a result, 7,187,500 of the Company’s Class B ordinary shares were cancelled and 7,187,500 of the Company’s Class A ordinary shares were issued to the Original Sponsor. The Original Sponsor agreed that all of the terms and conditions applicable to the founder shares set forth in the Letter Agreement shall continue to apply to the Class A ordinary shares that the Class B ordinary shares converted into, including the voting agreement, transfer restrictions and waiver of any right, title, interest or claim of any kind to the Trust Account or any monies or other assets held therein.
Pursuant to the Sponsor Purchase Agreement, the Sponsor has agreed to be bound by the lock-up contained in the Letter Agreement. The material terms of the Letter Agreement lock-up are summarized in the table below.
| Subject Securities | | Expiration Date | | Persons Subject
to Restrictions | | Exceptions to Transfer
Restrictions |
| Founder Shares | | The earlier of (A) one year after the completion of the Business Combination or (B) subsequent to the Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, or (y) the date on which PowerUp completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in PowerUp’s public shareholders having the right to exchange their Ordinary Shares for cash, securities or other property. | | ●PowerUp Sponsor LLC ● Jack Tretton ● Michael Olson ● Gabriel Schillinger ● Bruce Hack ● Peter Blacklow ● Julie Uhrman ● SRIRAMA Associates, LLC ● Surendra Ajjarapu ● Howard Doss ● Michael Peterson ● Avinash Wadhwani ● Donald Fell ● Mayur Doshi | | Transfers permitted: (i) to PowerUp’s officers or directors, any affiliates or family members of any of PowerUp’s officers or directors, any members of the Sponsor, or any affiliates of the Sponsor; (ii) in the case of an individual, transfers by gift to a member of the individual’s immediate family, to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization; (iii) in the case of an individual, transfers by virtue of laws of descent and distribution upon death of the individual; (iv) in the case of an individual, transfers pursuant to a qualified domestic relations order; (v) transfers by private sales or transfers made in connection with the consummation of an initial business combination at prices no greater than the price at which the securities were originally purchased; (vi) transfers in the event of PowerUp’s liquidation prior to the completion of an initial business combination; and (vii) transfers by virtue of the laws of the State of Delaware or the Sponsor’s limited liability company agreement upon dissolution of the Sponsor; provided, however, that in the case of clauses (i) through (v) or (vii), these permitted transferees must enter into a written agreement agreeing to be bound by the restrictions contained in the Letter Agreement. |
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| Private Placement Warrants | | 30 days after the completion of the Business Combination. | | Same as above. | | Same as above. |
Lock-Up Agreements
The Business Combination Agreement contemplates that, in connection with the Closing, PowerUp, the Sponsor, and the Significant Aspire Holders (the “Locked-Up Parties”) will enter into lock-up agreements (the “Lock-Up Agreements”) with respect to New Aspire Common Stock (the “Lock-Up Shares”) and warrants (together with the “Lock-Up Shares, the “Lock-Up Securities”) held by each such stockholder immediately following the Closing, pursuant to which, each Locked-Up Party will agree not to transfer any Lock-Up Securities until the earlier of (A) six months after the completion of the Business Combination and (B) subsequent to the Business Combination, (x) if the closing price of the New Aspire Common Stock equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, or (y) the date on which New Aspire completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of its stockholders having the right to exchange their New Aspire Common Stock for cash, securities or other property.
Non-Competition Agreements
The Business Combination Agreement contemplates that, at the Closing, the Significant Aspire Holders will enter into non-competition agreements pursuant to which they will agree not to compete with New Aspire and its respective subsidiaries, subject to certain requirements and customary conditions.
Pro Forma Ownership of New Aspire Upon Closing
Immediately after the Closing, assuming no public shareholder exercises its redemption rights and no additional shares are issued prior to Closing, the Aspire Stockholders will own approximately 75.2% of the shares of New Aspire Common Stock to be outstanding immediately after the Business Combination, public shareholders will own approximately 1.2% of the shares of New Aspire Common Stock, the Original Sponsor will own approximately 6.2% of the shares of New Aspire Common Stock, and the Sponsor will own approximately 13.6% of the shares of New Aspire Common Stock, in each case, based on the number of shares of PowerUp ordinary shares outstanding as of the Record Date. These pro forma ownership percentages also assume the issuance of up to 3,750,000 Working Capital Loan Shares.
As of September 30, 2024, PowerUp’s Trust Account had a balance of approximately $6.6 million. The parties anticipate needing to raise outside capital through debt or equity financing at, or in connection with, Closing to allow Aspire to meet the Minimum Cash Condition, to allow the combined company to meet Nasdaq initial listing requirements as well as demonstrate to Nasdaq its ability to continue to meet the exchange’s on-going listing requirements, and to allow the combined company to satisfy certain obligations and have sufficient working capital. If the parties are unsuccessful at closing a financing concurrent with the Closing of the Business Combination, the Closing likely would not occur even if PowerUp waives the $0.00 Minimum Cash Condition, unless PowerUp and/or Aspire is able to defer, or convert into equity, some or all of their expenses and liabilities. However, as of the date of the proxy statement/prospectus, no parties have affirmatively agreed to waive or convert into equity, any obligations that are, by their terms, repayable in cash. This could result in the parties electing to proceed with the Closing, and the combined company would have to reach an accommodation with its creditors and other counterparties to defer repayment of those obligations and/or the combined company having insufficient cash to fully implement its business and commercialize its products. There is no assurance that any debtors or counterparties will agree to defer obligations owed by the combined company or otherwise agree to accommodations favorable to the combined company.
Moreover, any obligations of the combined company that are not satisfied at closing, or that are deferred at the closing, would result in the combined company carrying additional liabilities on its balance sheet and, in turn, could have an adverse effect on the combined company’s ability to raise additional equity or debt financing after the closing, or result in the combined company raising capital on terms less favorable, and also would result in the combined company needing to reserve or utilize funds for deferred expenses and obligations in lieu of utilizing those funds to further its business operations. Impediments to the combined company’s access to outside capital, and matters that could cause the combined company to scale back or delay the implementation of its business plan would likely delay the on-going development of the combined company’s products and timeline by which hopes to begin generating revenue which would have an adverse effect on the combined company’s results of operations. For more information, see “Summary of the Proxy Statement/Prospectus – Sources and Uses of Funds for the Business Combination.”
Shareholders may experience additional dilution to the extent New Aspire issues additional shares after the Closing. The following table illustrates varying ownership levels in New Aspire Common Stock immediately following the consummation of the Business Combination based on the varying levels of redemptions by the public shareholders and assumes (a) no public shareholder exercises its redemption rights and no additional shares are issued prior to Closing, (b) the issuance of up to 14,375,000 shares of New Aspire Common Stock underlying PowerUp public warrants, (c) the issuance of up to 9,763,333 shares of New Aspire Common Stock underlying PowerUp private placement warrants (comprised of 2,929,000 private placement warrants held by the Original Sponsor and 6,834,333 private placement warrants held by the Sponsor), and (d) the issuance of 3,750,000 Working Capital Loan Shares. The Aspire Stockholders would own approximately 49.5% of the shares of New Aspire Common Stock to be outstanding immediately after the Business Combination, public shareholders, including holders of the public warrants, would own approximately 21.1% of the shares of New Aspire Common Stock, the Original Sponsor would own approximately 8.2% of the shares of New Aspire Common Stock, and the Sponsor would own approximately 18.7% of the shares of New Aspire Common Stock, in each case, based on the number of shares of PowerUp ordinary shares outstanding as of the Record Date. For more information, see “What equity stake will current PowerUp shareholders and current Aspire Stockholders hold in New Aspire immediately after the consummation of the Business Combination?”
If the actual facts differ from these assumptions, the numbers of shares and ownership percentages set forth above, including the anticipated equity stake of non-redeeming public shareholders in New Aspire following the Business Combination will be different. For more information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
The Sponsor holds 4,317,500 ordinary shares of PowerUp, which it acquired for less than $0.0001 per share, and the Original Sponsor holds 2,870,000 ordinary shares of PowerUp, which it acquired for approximately $0.0029 per share. However, the Merger Consideration is based on a deemed price per share of $10.00 per share. Therefore, the Sponsor and Original Sponsor could make a substantial profit after the Business Combination. The ordinary shares held by the Sponsor and Original Sponsor have an aggregate market value of approximately $49,349,025 and $32,804,100, respectively, based on the closing price of PowerUp’s Class A ordinary shares on January 7, 2025 of $11.43 per share.
Dilution
The following table presents the net tangible book value per share at various redemption levels assuming various sources of material probable dilution (but excluding the effects of the Business Combination itself):
| | | Assuming No | | | Assuming 50% | | | Assuming Maximum | |
| | | Redemptions(1) | | | Redemptions(2) | | | Redemptions(3) | |
| Initial offering price per share | | $ | 10.00 | | | $ | 10.00 | | | $ | 10.00 | |
| Net Tangible Book Value at September 30, 2024 (4) | | $ | 90,000 | | | $ | (3,210,000 | ) | | $ | (6,511,000 | ) |
| Total number of basis shares | | | 11,515,144 | | | | 11,226,322 | | | | 10,937,500 | |
| Net tangible book value per share | | $ | 0.01 | | | $ | (0.29 | ) | | $ | (0.60 | ) |
| Dilution to PowerUp Public Shareholders | | $ | 9.99 | | | $ | 10.29 | | | $ | 10.60 | |
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| Net Tangible Book Value at September 30, 2024, including exercise of PowerUp Public Warrants (5) | | $ | 165,402,500 | | | $ | 165,102,500 | | | $ | 158,801,500 | |
| Total number of basis shares, including exercise of PowerUp Public Warrants | | | 25,890,144 | | | | 25,601,322 | | | | 25,312,500 | |
| Net Tangible Book Value per share, including exercise of PowerUp Public Warrants | | $ | 6.39 | | | $ | 6.33 | | | $ | 6.27 | |
| Dilution to PowerUp Public Shareholders, including future sources of dilution | | $ | 3.61 | | | $ | 3.67 | | | $ | 3.73 | |
| (1) | Assuming No Redemptions – includes 577,644 PowerUp public shares. Also includes 2,870,000 PowerUp Class A Ordinary Shares held by the Original Sponsor, 4,317,500 PowerUp Class A Ordinary Shares held by the Sponsor, and 3,750,000 Working Capital Loan Shares. In order for there to be no dilution to PowerUp’s Public Shareholders (excluding exercise of PowerUp Public Warrants), the Net Tangible Book Value at September 30, 2024 would need to be greater than or equal to $115,151,440. In order for there to be no dilution to PowerUp’s Public Shareholders (including exercise of PowerUp Public Warrants), the Net Tangible Book Value at September 30, 2024 would need to be greater than or equal to $258,901,440. |
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| (2) | Assuming 50% Redemptions – includes 288,822 PowerUp public shares. Also includes 2,870,000 PowerUp Class A Ordinary Shares held by the Original Sponsor, 4,317,500 PowerUp Class A Ordinary Shares held by the Sponsor, and 3,750,000 Working Capital Loan Shares. In order for there to be no dilution to PowerUp’s Public Shareholders (excluding exercise of PowerUp Public Warrants), the Net Tangible Book Value at September 30, 2024 would need to be greater than or equal to $112,263,220. In order for there to be no dilution to PowerUp’s Public Shareholders (including exercise of PowerUp Public Warrants), the Net Tangible Book Value at September 30, 2024 would need to be greater than or equal to $256,013,220. |
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| (3) | Assuming Maximum Redemptions – includes 2,870,000 PowerUp Class A Ordinary Shares held by the Original Sponsor, 4,317,500 PowerUp Class A Ordinary Shares held by the Sponsor, and 3,750,000 Working Capital Loan Shares. In order for there to be no dilution to PowerUp’s Public Shareholders (excluding exercise of PowerUp Public Warrants), the Net Tangible Book Value at September 30, 2024 would need to be greater than or equal to $109,375,000. In order for there to be no dilution to PowerUp’s Public Shareholders (including exercise of PowerUp Public Warrants), the Net Tangible Book Value at September 30, 2024 would need to be greater than or equal to $253,125,000. |
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| (4) | The net tangible book value at September 30, 2024 was calculated as total assets minus intangible asset minus total liabilities of PowerUp, adjusted for reductions in the Trust Account at the 50% and Maximum Redemptions scenarios. |
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| (5) | Includes 14,375,000 shares underlying the Public Warrants and cash to New Aspire of $165,313,000 assuming all Public Warrants are exercised. Each whole Public Warrant entitles the holder thereof to purchase one PowerUp Class A Ordinary share at a price of $11.50 per share, subject to adjustment. A Public Warrant may be exercised only during the Exercise Period commencing on the date that is thirty (30) days after the Business Combination. This assumes a registration statement covering the shares of PowerUp’s Class A Ordinary Shares issuable upon exercise of the warrants is effective by the 60 business day after the closing of the Business Combination. See Note. 7. Shareholders’ Deficit of the historical audited financial statements of PowerUp included elsewhere in this proxy statement/prospectus for more information regarding the registration requirements with regard to the Public Warrants. |
Shareholders may experience additional dilution to the extent New Aspire issues additional shares after the Closing, including the issuance of up to 9,763,333 shares of New Aspire Common Stock underlying PowerUp private placement warrants (comprised of 2,929,000 private placement warrants held by the Original Sponsor and 6,834,333 private placement warrants held by the Sponsor),
Sources and Uses of Funds for the Business Combination
The following tables summarize the sources and uses of cash in connection with the Business Combination, assuming (i) none of PowerUp’s Public Shares are redeemed in connection with the Business Combination (ii) 50% of PowerUp’s Public Shares are redeemed in connection with the Business Combination and (iii) all of PowerUp’s Public Shares are redeemed in connection with the Business Combination. Each of the No Additional Redemptions, 50% Redemptions, and Maximum Redemptions scenarios assume that the per-share redemption price is $11.43; the actual per-share redemption price will be equal to the pro rata portion of the Trust Account calculated as of two business days prior to the consummation of the Business Combination.
Estimated Sources and Uses of Cash (No Additional Redemptions)
| Sources of Funds (1) | | Uses of Funds (1) |
| Cash balance of Aspire prior to Business Combination (2) | | $ | 17 | | | Transaction fees and expenses (3) | | $ | 1,400 | |
| Cash balance of PowerUp prior to Business Combination (2) | | | - | | | Payment of related party payables (4) | | | 3,529 | |
| Due from Sponsor | | | 25 | | | | | | | |
| Existing Cash held in Trust Account (2) | | | 6,601 | | | Remaining Cash on Balance Sheet (5) | | | 1,714 | |
| Total Sources | | $ | 6,643 | | | Total Uses | | $ | 6,643 | |
| (1) | In thousands. Totals may be affected by rounding. |
| (2) | As of September 30, 2024. |
| (3) | Reflects the payment of legal, audit, consulting and other transaction-related expenses. |
| (4) | Reflects repayment of the Working Capital Loans and the payment of administrative fees owed to the Sponsor as of September 30, 2024. |
| (5) | The parties anticipate needing to raise outside capital through debt or equity financing at, or in connection with, Closing to allow the combined company to meet Nasdaq initial listing requirements, and to allow the combined company to satisfy certain obligations and have sufficient working capital. Additionally, some of the parties’ obligations to related parties in connection with the transaction may be deferred or converted into equity in order to facilitate the Closing and the combined company’s ability to meet Nasdaq requirements. |
Estimated Sources and Uses of Cash (50% Redemptions)
| Sources of Funds (1) | | Uses of Funds (1) |
| Cash balance of Aspire prior to Business Combination (2) | | $ | 17 | | | Class A Common Stock public redemption (3) | | $ | 3,300 | |
| Cash balance of PowerUp prior to Business Combination (2) | | | - | | | Transaction fees and expenses (4) | | | 1,400 | |
| Existing Cash held in Trust Account (2) | | | 6,601 | | | Payment of related party payables (5) | | | 3,529 | |
| Due From Sponsor | | | 25 | | | Remaining Cash on Balance Sheet (6) | | | (1,586 | ) |
| Total Sources | | $ | 6,643 | | | Total Uses | | $ | 6,643 | |
| (1) | In thousands. Totals may be affected by rounding. |
| (2) | As of September 30, 2024. |
| (3) | Assumes that 50% of PowerUp Public Shareholders, holding 288,822 Class A ordinary shares, will exercise their redemption rights. |
| (4) | Reflects the payment of legal, audit, consulting and other transaction-related expenses. |
| (5) | Reflects repayment of the Working Capital Loans and the payment of administrative fees owed to the Sponsor as of September 30, 2024. |
| (6) | The parties anticipate needing to raise outside capital through debt or equity financing at, or in connection with, Closing to allow the combined company to meet Nasdaq initial listing requirements, and to allow the combined company to satisfy certain obligations and have sufficient working capital. Additionally, some of the parties’ obligations to related parties in connection with the transaction may be deferred or converted into equity in order to facilitate the Closing and the combined company’s ability to meet Nasdaq requirements. |
Estimated Sources and Uses of Cash (Maximum Redemptions)
| Sources of Funds (1) | | Uses of Funds (1) |
| Cash balance of Aspire prior to Business Combination (2) | | $ | 17 | | | Class A Common Stock public redemption (3) | | $ | 6,601 | |
| Cash balance of PowerUp prior to Business Combination (2) | | | - | | | Transaction fees and expenses (4) | | | 1,400 | |
| Existing Cash held in Trust Account (2) | | | 6,601 | | | Payment of related party payables (5) | | | 3,529 | |
| Due From Sponsor | | | 25 | | | Remaining Cash on Balance Sheet (6) | | | (4,887 | ) |
| Total Sources | | $ | 6,643 | | | Total Uses | | $ | 6,643 | |
| (1) | In thousands. Totals may be affected by rounding. |
| (2) | As of September 30, 2024. |
| (3) | Assumes that 100% of PowerUp Public Shareholders, holding 577,644 Class A ordinary shares, will exercise their redemption rights. |
| (4) | Reflects the payment of legal, audit, consulting and other transaction-related expenses. |
| (5) | Reflects repayment of the Working Capital Loans and the payment of administrative fees owed to the Sponsor as of September 30, 2024. |
| (6) | The parties anticipate needing to raise outside capital through debt or equity financing at, or in connection with, Closing to allow the combined company to meet Nasdaq initial listing requirements, and to allow the combined company to satisfy certain obligations and have sufficient working capital. Additionally, some of the parties’ obligations to related parties in connection with the transaction may be deferred or converted into equity in order to facilitate the Closing and the combined company’s ability to meet Nasdaq requirements. |
Compensation Received by the Sponsor, the Original Sponsor, and Their Affiliates
Set forth below is a summary of the terms and amount of the compensation received or to be received by the Sponsor, the Original Sponsor, and their affiliates in connection with the Business Combination or any related financing transaction, including the amount of securities issued or to be issued by PowerUp to the Sponsor, the Original Sponsor, and their affiliates, and the price paid or to be paid for such securities.
| | | Interest in Securities | | Other Compensation |
| Sponsor | | At Closing, the Sponsor may hold a total of up to 6,317,500 shares of New Aspire Common Stock, assuming additional Working Capital Loans are entered into prior to Closing, consisting of the following: | | At Closing, it is estimated that Aspire will use cash in an aggregate amount up to $1.55 million to pay transaction expenses for the parties. |
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| | | | ● | 4,317,500 shares currently held by the Sponsor (which it acquired for less than $0.0001 per share); and | | Pursuant to an administrative services agreement, the Sponsor will be paid all accrued and unpaid administrative fees at Closing. As of the date of this proxy statement/prospectus, the Sponsor is owed $368,939 in administrative fees. |
| | | | ● | up to 2,000,000 Working Capital Loan Shares to be issued to the Sponsor as partial consideration for the Sponsor entering into certain Working Capital Loans, with such exact number to be calculated based on the actual dollar amount of principal loaned subsequent to the date of the Business Combination Agreement. As of the date of this proxy statement/prospectus, 567,905 of these Working Capital Loan Shares are issuable at Closing. | | PowerUp has agreed to reimburse the Sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. As of September 30, 2024, PowerUp has not reimbursed Sponsor for any out-of-pocket expenses. |
| | | At Closing, the Sponsor will hold a total of 6,834,333 warrants of New Aspire, which consists solely of warrants currently held by the Sponsor (which it acquired for less than $0.0001 per warrant). | | PowerUp has also agreed to pay the Sponsor, at Closing, $1,000,000 pursuant to the Promissory Note Fee Agreement. |
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| Original Sponsor | | At Closing, the Original Sponsor will hold a total of 2,870,000 shares of New Aspire Common Stock, which consists solely of shares currently held by the Original Sponsor. The Original Sponsor originally acquired the shares for approximately $0.0029 per share. At Closing, the Original Sponsor will hold a total of 2,929,000 warrants of New Aspire, which consists solely of warrants currently held by the Original Sponsor. The Original Sponsor originally acquired the warrants for $1.50 per warrant. | | Pursuant to the Sponsor Purchase Agreement, $1.00 will become due and payable to the Original Sponsor at Closing. |
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Affiliate (VKSS Capital, LLC) | | Pursuant to the Second Subscription Agreements, as consideration for the Affiliate’s transfer of the Subscription Shares to the Investors, the Sponsor will transfer 250,000 shares of PowerUp common stock to the Affiliate. | | The Affiliate is not receiving additional cash or other compensation in connection with the Business Combination. |
The retention of shares by the Sponsor, the Original Sponsor, and the Affiliate, and the potential issuance of Working Capital Loan Shares to the Sponsor at Closing will not result in a material dilution of the equity interests of non-redeeming PowerUp shareholders. For more information, see “Questions and Answers for Shareholders of PowerUp – What equity stake will current PowerUp shareholders and current Aspire Stockholders hold in New Aspire immediately after the consummation of the Business Combination?”
None of PowerUp’s officers or directors has received any cash compensation for services rendered to PowerUp. For more information, see “Executive Officer and Director Compensation.”
Date, Time and Place of Extraordinary General Meeting of PowerUp’s Shareholders
The extraordinary general meeting will be held at [●], [●] Time, on [●] at the offices of [●] located at [●], or you or your proxyholder will be able to attend and vote at the extraordinary general meeting online by visiting [●] and using a control number assigned by Equiniti, unless the extraordinary general meeting is adjourned, to consider and vote upon the proposals to be put to the extraordinary general meeting, including if necessary, the Adjournment Proposal, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the extraordinary general meeting, each of the Condition Precedent Proposals have not been approved.
Voting Power; Record Date
PowerUp shareholders will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned ordinary shares at the close of business on December 24, 2024, which is the “record date” for the extraordinary general meeting. Shareholders will have one vote for each ordinary share owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. PowerUp’s warrants do not have voting rights. As of the close of business on the record date, there were 7,765,144 ordinary shares issued and outstanding, of which 577,644 were issued and outstanding public shares.
Quorum and Vote of PowerUp Shareholders
A quorum of PowerUp shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if one or more shareholders who together hold a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy at the extraordinary general meeting. As of the record date for the extraordinary general meeting, approximately 3,882,573 ordinary shares would be required to achieve a quorum.
The Initial Shareholders have, pursuant to the Letter Agreement, agreed to, among other things, vote all of their shares in favor of the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the Original Sponsor and Sponsor collectively own approximately 92.56% of the issued and outstanding Class A ordinary shares. Accordingly, PowerUp would not need any of the public shares to be voted in favor of any proposal in order for it to be approved, assuming all outstanding shares are voted on such proposal. See “Business Combination Proposal — Related Agreements — Letter Agreement” for more information related to the Letter Agreement.
The proposals presented at the extraordinary general meeting require the following votes:
| | (i) | Business Combination Proposal: The approval of the Business Combination Proposal requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
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| | (ii) | Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Act, being a resolution passed by at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. Each holder of Class A ordinary shares will have one vote per share. |
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| | (iii) | Organizational Documents Proposal: The approval of the Organizational Documents Proposal requires a special resolution, being a resolution passed by at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
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| | (iv) | Advisory Charter Proposals: The separate approval, on a non-binding advisory basis, of each of the Advisory Charter Proposals requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
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| | (v) | Nasdaq Proposal: The approval of the Nasdaq Proposal requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
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| | (vi) | Omnibus Incentive Plan Proposal: The approval of the Omnibus Incentive Plan Proposal requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
| | (vii) | Election of Directors Proposal: The approval of the Election of Directors Proposal requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
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| | (viii) | Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution, being a resolution passed by at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. |
Redemption Rights
Pursuant to the Existing Governing Documents, a public shareholder may request that PowerUp redeem all or a portion of its public shares for cash if the Business Combination is consummated. You will be entitled to receive cash for any public shares to be redeemed only if you:
| | (i) | (a) hold public shares or (b) if you hold public shares through units, elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares; |
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| | (ii) | submit a written request to Equiniti, PowerUp’s transfer agent, in which you (i) request that PowerUp redeem all or a portion of your public shares for cash and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and |
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| | (iii) | deliver your public shares to Equiniti, PowerUp’s transfer agent, physically or electronically through DTC. |
Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to [●], [●] Eastern Time, on [●] (two business days before the scheduled vote at the extraordinary general meeting) in order for their shares to be redeemed.
Holders of PowerUp units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. Public holders that hold their units in an account at a brokerage firm or bank must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Equiniti, PowerUp’s transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Equiniti in order to validly redeem its shares. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal and regardless of whether they hold public shares on the record date for the extraordinary general meeting. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Equiniti, PowerUp’s transfer agent, New Aspire will redeem such public shares for a per share price, payable in cash, equal to the pro rata portion of the Trust Account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, based on approximately $6.6 million of funds in the Trust Account and 577,644 shares subject to possible redemption, in each case, as of September 30, 2024, this would have amounted to approximately $11.43 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the PowerUp Domestication and accordingly it is shares of New Aspire Common Stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of PowerUp — Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.
Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.
The Initial Shareholders have, pursuant to the Letter Agreement, agreed to, among other things, vote all of their shares in favor of the proposals being presented at the extraordinary general meeting in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per share redemption price. As of the date of this proxy statement/prospectus, the Original Sponsor and Sponsor collectively own approximately 92.56% of the issued and outstanding ordinary shares. See “Business Combination Proposal — Related Agreements — Letter Agreement” for more information related to the Letter Agreement.
Holders of the warrants will not have redemption rights with respect to the warrants.
Appraisal Rights
Neither PowerUp shareholders nor PowerUp warrant holders have appraisal rights in connection with the Business Combination or the PowerUp Domestication under the Cayman Islands Companies Act or under the DGCL.
Proxy Solicitation
Proxies may be solicited by mail, telephone or in person. PowerUp has engaged Issuer Direct Corporation to assist in the solicitation of proxies.
If a shareholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the extraordinary general meeting. A shareholder also may change its vote by submitting a later-dated proxy as described in the section entitled “Extraordinary General Meeting of PowerUp — Revoking Your Proxy.”
Interests of PowerUp’s Directors and Executive Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination
When you consider the recommendation of the PowerUp Board in favor of approval of the Business Combination Proposal, you should keep in mind that the Initial Shareholders, PowerUp’s directors and officers, and Aspire’s directors and officers may have interests in such proposal that are different from, or in addition to, those of PowerUp shareholders and warrant holders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to shareholders that they approve the Business Combination. PowerUp’s Board concluded that the potentially disparate interests would be mitigated because (i) these interests are disclosed and included in this proxy statement/prospectus, (ii) most of these disparate interests would exist with respect to a business combination by PowerUp with any other target business or businesses, and (iii) a significant portion of the consideration to PowerUp’s directors and executive officers was structured to be realized based on the future performance of New Aspire’s Common Stock. In addition, PowerUp’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and unanimously approving, as members of the PowerUp Board, the Business Combination Agreement and the transactions contemplated thereby, including the Business Combination. Nonetheless, shareholders should take these disparate interests into account in deciding whether to approve the Business Combination. These interests include, among other things, the interests listed below:
| | ● | in connection with PowerUp’s initial public offering, and pursuant to the terms of the Letter Agreement, our Initial Shareholders have agreed not to redeem any ordinary shares held by them in connection with a shareholder vote to approve an initial business combination; |
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| | ● | the Sponsor and PowerUp’s officers and directors will lose their entire investment in PowerUp and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by February 17, 2025 (unless such date is extended by the PowerUp Board in accordance with the Existing Governing Documents); |
| | ● | the Sponsor will pay an aggregate of $1.00 for its 4,317,500 Class A ordinary shares and its 6,834,333 private placement warrants to the Original Sponsor upon the Closing of the Business Combination. The Sponsor will pay less than $0.0001 per Class A ordinary share and has the right to acquire 6,834,333 shares of New Aspire Common Stock at a price of $11.50 per share. Thus, if the price of the stock falls significantly from the initial public offering price of $10.00 per share, our Sponsor will still receive a positive rate of return even in a scenario where our public shareholders would experience a negative rate of return in New Aspire from our initial public offering price of $10.00 per share; the Sponsor also has the ability to receive additional returns if our price rises above $11.50 per share; |
| | ● | the aggregate dollar amount that the Sponsor and its affiliates have at risk depending on the completion of an initial business combination, including the Business Combination, is approximately $50,991,337 as of January 7, 2025, which amount includes the current value of securities held and cash amounts to be paid to the Sponsor at Closing, assuming a trading price of $11.43 per PowerUp Class A ordinary share and $0.04 per PowerUp public warrants (based upon the respective closing prices of the PowerUp Class A ordinary shares and the PowerUp public warrants on Nasdaq on January 7, 2025); the aggregate amount the Sponsor has at risk consists of the value of the securities and other compensation described in the section titled “Summary of the Proxy Statement/Prospectus – Compensation Received by the Sponsor, the Original Sponsor, and Their Affiliates”; |
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| | ● | the aggregate dollar amount that the Original Sponsor and its affiliates have at risk depending on the completion of an initial business combination, including the Business Combination, is approximately $32,921,261 as of January 7, 2025, which amount includes the current value of securities held and cash amounts to be paid to the Original Sponsor at Closing, assuming a trading price of $11.43 per PowerUp Class A ordinary share and $0.04 per PowerUp public warrants (based upon the respective closing prices of the PowerUp Class A ordinary shares and the PowerUp public warrants on Nasdaq on January 7, 2025); the aggregate amount the Original Sponsor has at risk consists of the value of the securities and other compensation described in the section titled “Summary of the Proxy Statement/Prospectus – Compensation Received by the Sponsor, the Original Sponsor, and Their Affiliates”; |
| | ● | the Sponsor acquired approximately 55.6% of the issued and outstanding ordinary shares of PowerUp for less than $0.0001 per share. However, the merger consideration is based on a deemed price per share of $10.00 per share. Therefore, the Sponsor could make a substantial profit after the Business Combination even if the New Aspire Common Stock subsequently declines in value or is unprofitable for the public shareholders, or the public shareholders experience substantial losses in their investment in New Aspire. The ordinary shares held by the Sponsor have an aggregate market value of approximately $49,349,025, based on the closing price of PowerUp’s Class A ordinary shares on January 7, 2025 of $11.43 per share, resulting in a theoretical gain of $49,349,024 (or approximately $11.43 per share); |
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| | ● | the Original Sponsor owns approximately 37.0% of the issued and outstanding ordinary shares of PowerUp, which it originally acquired for approximately $0.0029 per share. However, the merger consideration is based on a deemed price per share of $10.00 per share. Therefore, the Original Sponsor could make a substantial profit after the Business Combination even if the New Aspire Common Stock subsequently declines in value or is unprofitable for the public shareholders, or the public shareholders experience substantial losses in their investment in New Aspire. The ordinary shares held by the Original Sponsor have an aggregate market value of approximately $32,804,100, based on the closing price of PowerUp’s Class A ordinary shares on January 7, 2025 of $11.43 per share, resulting in a theoretical gain of $32,795,777 (or $11.4271 per share); |
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| | ● | the private placement warrants owned by the Initial Shareholders will be worthless if an initial business combination is not consummated; |
| | ● | the Initial Shareholders have agreed that the private placement warrants and the underlying securities will not be sold or transferred by it until after PowerUp has completed an initial business combination, subject to limited exceptions; |
| | ● | the Sponsor’s total potential ownership in New Aspire, assuming the exercise and conversion of all of securities following the consummation of the Business Combination, is estimated to comprise approximately 18.7% of outstanding New Aspire Common Stock in a no redemption scenario, and 18.9% of outstanding New Aspire Common Stock in a maximum redemption scenario (see “Unaudited Pro Forma Condensed Combined Financial Information” for more information); |
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| | ● | the Original Sponsor’s total potential ownership in New Aspire, assuming the exercise and conversion of all of securities following the consummation of the Business Combination, is estimated to comprise approximately 8.2% of outstanding New Aspire Common Stock in a no redemption scenario, and 8.3% of outstanding New Aspire Common Stock in a maximum redemption scenario (see “Unaudited Pro Forma Condensed Combined Financial Information” for more information); |
| | ● | the Sponsor is currently the owner of 4,317,500 Class A ordinary shares and 6,834,333 private placement warrants, each consisting of one Class A ordinary share and one-half of one redeemable warrant that is exercisable for one Class A ordinary share, which it purchased for $1.00 due to the Original Sponsor at the Closing of the Business Combination. If an initial business combination, such as the Business Combination, is not completed by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), PowerUp will be required to dissolve and liquidate. In such event, the PowerUp Class A ordinary shares currently held by the Sponsor, which were acquired from the Original Sponsor, will be worthless because the Sponsor has agreed to waive its rights to any liquidation distribution; |
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| | ● | the Original Sponsor is currently the owner of 2,870,000 Class A ordinary shares and 2,929,000 private placement warrants. If an initial business combination, such as the Business Combination, is not completed by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), PowerUp will be required to dissolve and liquidate. In such event, the PowerUp Class A ordinary shares currently held by the Original Sponsor will be worthless because the Original Sponsor has agreed to waive its rights to any liquidation distribution; |
| | ● | the anticipated continuation of two of our existing directors, Surendra Ajjarapu and Donald G. Fell, as directors of New Aspire. In the future each of such directors will receive any cash fees, stock options, stock awards or other remuneration that the New Aspire Board determines to pay them for their service as directors; |
| | ● | pursuant to the Business Combination Agreement, for a period of six years following the consummation of the Business Combination, we are required to (i) maintain provisions in our organizational documents providing for continued indemnification of PowerUp’s directors and officers and (ii) continue PowerUp’s directors’ and officers’ liability insurance after the Business Combination (i.e., a “tail policy”); |
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| | ● | at the Effective Time, PowerUp will issue the Sponsor up to 2,000,000 Working Capital Loan Shares as partial consideration for the Sponsor entering into certain Working Capital Loans, such exact number to be calculated based on the actual dollar amount of principal loaned subsequent to the date of the Business Combination Agreement. As of the date of this proxy statement/prospectus, 567,905 of these Working Capital Loan Shares are issuable at Closing; |
| | ● | if the Business Combination is not consummated, the Sponsor will not receive the up to 2,000,000 Working Capital Loan Shares described above, which have a total aggregate value of up to $20,000,000, with the exact amount to be determined based on the total amount shares ultimately issued to the Sponsor; |
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| | ● | if the Business Combination is not consummated, the Sponsor will not receive the $1,000,000 fee payable under the Promissory Note Fee Agreement; |
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| | ● | PowerUp is not responsible for the payment of any interest on the Working Capital Loans and is only required to repay the principal amounts of the Working Capital Loans upon the completion of an initial business combination; |
| | ● | pursuant to the Registration Rights Agreement, the Original Sponsor and its permitted transferees are entitled to registration of the shares of New Aspire Common Stock into which the founder shares will automatically convert at the time of the consummation of the Business Combination; |
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| | ● | the fact that we have provisions in our Existing Governing Documents that waive the corporate opportunities doctrine on an ongoing basis, which means that PowerUp’s officers and directors have not been obligated and continue to not be obligated to bring all corporate opportunities to PowerUp. The potential conflict of interest relating to the waiver of the corporate opportunities doctrine in our Existing Governing Documents did not, to our knowledge, impact our search for an acquisition target or prevent us from reviewing any opportunities as a result of such waiver; |
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| | ● | if the Trust Account is liquidated, including in the event PowerUp is unable to complete an initial business combination by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), the Sponsor has agreed to indemnify PowerUp to ensure that the proceeds in the Trust Account are not reduced below $10.25 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which PowerUp has entered into an acquisition agreement or claims of any third party for services rendered or products sold to PowerUp, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; |
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| | ● | the Sponsor has agreed to pay for any liquidation expenses if an initial business combination is not consummated; |
| | ● | the following individuals who are currently executive officers of Aspire are expected to become executive officers of New Aspire upon the Closing, serving in the offices set forth opposite their names below: |
| Name | | Position |
| Kraig Higginson | | Chief Executive Officer |
| Ernest Scheidemann | | Chief Financial Officer |
| Stephen Quesenberry | | General Counsel |
| | ● | Kraig Higginson and Edward Kimball, who are currently members of Aspire’s board of directors, are expected to become members of the New Aspire Board upon the Closing; |
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| | ● | members of Aspire’s management own certain convertible securities in Aspire that may benefit from the Business Combination. Mr. Higginson will own 9,489,137 shares, Mr. Scheidemann will own 588,981 shares and Mr. Quesenberry will own 2,028,712 shares. See “Certain Relationships and Related Person Transactions” for a further discussion of these agreements; and |
| | ● | effective upon Closing, New Aspire intends to enter into employment agreements with each of its NEOs. |
As a result of the foregoing interests, the Sponsor and PowerUp’s directors and officers will benefit from the completion of an initial business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public shareholders rather than liquidate.
The Initial Shareholders have, pursuant to the Letter Agreement, agreed to, among other things, vote all of their shares in favor of the proposals being presented at the extraordinary general meeting in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per share redemption price. As of the date of this proxy statement/prospectus, the Original Sponsor and Sponsor collectively own approximately 92.56% of the issued and outstanding ordinary shares. See “Business Combination Proposal — Related Agreements — Letter Agreement” for more information related to the Letter Agreement.
The existence of financial and personal interests of one or more of the Sponsor’s or PowerUp’s officers or directors may result in a conflict of interest on the part of each such director or officer between what such director or officer may believe is in the best interests of PowerUp and its shareholders and what such director or officer may believe is the best interest of such director or officer in determining to recommend that shareholders vote for the proposals.
The stockholders of Aspire may see a substantial gain in the value of their shares. Assuming the Omnibus Incentive Plan Proposal is approved, the officers of Aspire may receive, in addition to their existing compensation, equity awards in the future should the New Aspire Board elect to grant such awards.
At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding us or our securities, the Sponsor, Aspire and/or Aspire’s or PowerUp’s respective directors, officers, advisors or affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record or beneficial holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Initial Shareholders, Aspire and/or their directors, officers, advisors or respective affiliates who have agreed to vote in favor of this transaction purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their public shares. The purpose of such share purchases and other transactions would be (i) to increase the likelihood of satisfaction of the requirements that the Business Combination Proposal, each Advisory Charter Proposal, the Nasdaq Proposal, the Omnibus Incentive Plan Proposal, the Election of Directors Proposal, and the Adjournment Proposal are approved by the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, (ii) increase the likelihood of satisfaction of the requirement that the Domestication Proposal and the Organizational Documents Proposal are each approved by the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, and (iii) otherwise limit the number of public shares electing to be redeemed.
If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved. PowerUp will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals at the extraordinary general meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.
The existence of financial and personal interests of one or more of PowerUp’s directors may result in a conflict of interest on the part of such director(s) between what such director(s) may believe is in the best interests of PowerUp and its shareholders and what such director(s) may believe is best for themselves in determining to recommend that shareholders vote for the proposals. In addition, PowerUp’s officers have interests in the Business Combination that may conflict with your interests as a shareholder.
Recommendation to Shareholders of PowerUp
The PowerUp Board believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of PowerUp and its shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” the Organizational Documents Proposal, “FOR” each of the Advisory Charter Proposals, “FOR” the Nasdaq Proposal, “FOR” the Omnibus Incentive Plan Proposal, “FOR” the Election of Directors Proposal, and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.
The existence of financial and personal interests of one or more of PowerUp’s directors may result in a conflict of interest on the part of such director(s) between what such director(s) may believe is in the best interests of PowerUp and its shareholders and what such director(s) may believe is best for themselves in determining to recommend that shareholders vote for the proposals. In addition, PowerUp’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See “Business Combination Proposal — Interests of PowerUp’s Directors and Executive Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.
Expected Accounting Treatment
The PowerUp Domestication
There will be no accounting effect or change in the carrying amount of the consolidated assets and liabilities of PowerUp as a result of the PowerUp Domestication. The business, capitalization, assets and liabilities and financial statements of New Aspire immediately following the PowerUp Domestication will be the same as those of PowerUp immediately prior to the PowerUp Domestication.
The Business Combination
The Business Combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, PowerUp, who is the legal acquirer, will be treated as the “acquired” company for financial reporting purposes and Aspire will be treated as the accounting acquirer. Aspire has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances under the redemption scenarios:
| ● | Aspire’s existing stockholders will have more than 64.4% of the voting interest of New Aspire under both the no redemption and maximum redemption scenarios; |
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| ● | Aspire’s senior management will comprise the senior management of New Aspire; |
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| ● | the directors nominated by Aspire will represent the majority of the board of directors of New Aspire; |
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| ● | Aspire’s operations will comprise the ongoing operations of New Aspire; and |
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| ● | New Aspire will assume Aspire’s name. |
Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of a capital transaction in which Aspire is issuing stock for the net assets of PowerUp. The net assets of PowerUp will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Aspire.
Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders
For a discussion summarizing the U.S. federal income tax considerations of the PowerUp Domestication and exercise of redemption rights, please see “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders.”
Regulatory Matters
None of PowerUp and Aspire are aware of any material regulatory approvals or actions that are required for completion of the Business Combination. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.
Emerging Growth Company
Upon consummation of the Business Combination, New Aspire will remain an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. PowerUp has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, PowerUp, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of PowerUp’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.
New Aspire will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of PowerUp’s initial public offering, or December 31, 2027, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter; and (ii) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
Smaller Reporting Company
Additionally, PowerUp is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company and may take advantage of certain scaled disclosures available to smaller reporting companies for so long as the market value of our voting and non-voting common equity held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our common equity held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
Summary of Risk Factors
The following summary should not be relied upon as an exhaustive summary of the material risks facing PowerUp, Aspire, or New Aspire. In evaluating the proposals to be presented at the PowerUp extraordinary general meeting, a shareholder should carefully read the risks described below, this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors.” Unless the context otherwise requires, references to the “Company,” “we”, “us” and “our” in the subsection “— Risks Related to Aspire’s Business” generally refer to Aspire in the present tense and New Aspire from and after the Business Combination. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to:
Risks Related to Aspire’s Business
| | ● | Aspire has a limited operating history upon which investors can evaluate Aspire’s performance, and accordingly, Aspire’s prospects must be considered in light of the risks that any new company encounters. |
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| | ● | Aspire has incurred net losses in every year since its inception and anticipates that it will continue to incur substantial and increasing net losses in the foreseeable future, especially if Aspire faces difficulties in obtaining capital. |
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| | ● | Aspire will require substantial additional funding to achieve its goals, and a failure to obtain this necessary capital when needed could force Aspire to delay, limit, reduce or terminate its product development or commercialization efforts. |
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| | ● | Aspire may implement new lines of business or offer new products and services within existing lines of business. |
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| | ● | Aspire relies on other companies to provide components and services for its product candidates. |
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| | ● | Aspire relies on various intellectual property rights, including trademarks, in order to operate its business. |
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| | ● | Aspire’s success depends on the experience and skill of the board of directors, its executive officers and key employees. If it is not successful in attracting and retaining highly qualified personnel, Aspire may not be able to successfully implement its business strategy. |
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| | ● | Although dependent on certain key personnel, Aspire does not have any key person life insurance policies on any such people. |
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| | ● | Damage to Aspire’s reputation could negatively impact its business, financial condition and results of operations. |
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| | ● | Aspire’s business could be negatively impacted by cyber security threats, attacks and other disruptions. |
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| | ● | Security breaches of confidential customer information, in connection with Aspire’s electronic processing of credit and debit card transactions, or confidential employee information may adversely affect Aspire’s business. |
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| | ● | Aspire’s internal computer systems, or those used by third party contractors or consultants, may fail or suffer security breaches. |
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| | ● | Aspire operates in a highly regulated environment, and if Aspire is found to be in violation of any of the federal, state, or local laws or regulations applicable to it, Aspire’s business could suffer. |
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| | ● | Aspire’s technology platforms and product candidates are based on novel technologies, and the development and regulatory approval pathway for such product candidates is unproven and may never lead to marketable products. Even if Aspire obtains regulatory approval of its product candidates, the products may not gain market acceptance among physicians, patients, hospitals and others in the medical community. |
| | ● | Aspire’s business is highly dependent on the success of its lead product candidate, Instaprin which will require significant additional clinical testing before Aspire can seek regulatory approval and potentially launch commercial sales. |
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| | ● | Clinical development involves a lengthy and expensive process with uncertain outcomes, and results of earlier studies and trials may not be predictive of future clinical trial results. Aspire’s clinical trials may fail to demonstrate adequately the safety and efficacy of one or more of its product candidates, which would prevent or delay regulatory approval and commercialization. |
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| | ● | Aspire’s product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential, if approved, or result in significant negative consequences. |
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| | ● | If Aspire encounters difficulties enrolling patients in its clinical trials, Aspire’s clinical development activities could be delayed or otherwise adversely affected. |
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| | ● | Aspire relies and will rely on third parties to conduct its clinical trials, which are expensive, time consuming, and difficult to design and implement. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, Aspire may not be able to obtain regulatory approval of or commercialize its product candidates. |
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| | ● | If Aspire fails to develop additional product candidates, its commercial opportunity will be limited. |
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| | ● | Aspire is subject to a multitude of manufacturing and supply chain risks, any of which could substantially increase its costs and limit the supply of its product candidates. |
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| | ● | Aspire currently has no marketing and sales organization and has no experience in marketing products. If Aspire is unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell its product candidates, Aspire may not be able to generate product revenue. |
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| | ● | A variety of risks associated with marketing Aspire’s product candidates internationally could materially adversely affect Aspire’s business. |
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| | ● | Aspire faces significant competition from other biotechnology and pharmaceutical companies, and its operating results will suffer if it fails to compete effectively. |
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| | ● | Aspire’s employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. |
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| | ● | If product liability lawsuits are brought against Aspire, it may incur substantial liabilities and may be required to limit commercialization of Aspire’s product candidates. |
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| | ● | Aspire relies and expects to continue to rely on third parties to manufacture its clinical product supplies, and Aspire intends to rely on third parties to produce and process its product candidates, if approved, and commercialization of any of Aspire’s product candidates could be stopped, delayed or made less profitable if those third parties fail to obtain approval of government regulators or fail to provide Aspire with sufficient quantities of drug product at acceptable quality levels or prices. |
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| | ● | If Aspire’s third-party manufacturers use hazardous and biological materials in a manner that causes injury or violates applicable law, Aspire may be liable for damages. |
Risks Related to the Business Combination and PowerUp
| | ● | PowerUp’s Initial Shareholders have entered into the Letter Agreement with PowerUp and to vote in favor of the Business Combination, regardless of how PowerUp’s public shareholders vote. |
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| | ● | Since the Initial Shareholders, PowerUp’s directors and executive officers, and Aspire’s directors and executive officers have interests that are different, or in addition to (and which may conflict with), the interests of PowerUp’s shareholders, a conflict of interest may have existed in determining whether the Business Combination with Aspire is appropriate as PowerUp’s initial business combination. Such interests include that PowerUp’s Initial Shareholders, directors and executive officers, will lose their entire investment in PowerUp if an initial business combination is not completed. |
| | ● | Because Aspire is not conducting an underwritten public offering of its securities, no underwriter has conducted due diligence of Aspire’s business, operations or financial condition or reviewed the disclosure in this proxy statement/prospectus. |
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| | ● | The consummation of the Business Combination is subject to compliance with the HSR Act, and if certain conditions are not satisfied or waived, the Business Combination may not be completed. |
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| | ● | The ability of PowerUp’s public shareholders to exercise redemption rights with respect to a large number of its public shares may not allow it to complete the Business Combination or optimize the capital structure of New Aspire and may increase the probability that the Business Combination would be unsuccessful and that you will have to wait for liquidation in order to redeem your shares. |
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| | ● | PowerUp’s Initial Shareholders, as well as Aspire, PowerUp’s directors, executive officers, advisors and their respective affiliates may elect to purchase public shares prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of its Class A ordinary shares. |
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| | ● | If the Business Combination does not qualify as a “reorganization” for U.S. federal income tax purposes, U.S. holders of Aspire Common Stock will be required to recognize gain or loss for U.S. federal income tax purposes upon the exchange of their Aspire Common Stock for New Aspire Common Stock in the Business Combination. |
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| | ● | The PowerUp Domestication may result in adverse tax consequences for Public Shareholders and holders of PowerUp Warrants. |
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| | ● | We may have been a PFIC which could result in adverse United States federal income tax consequences to U.S. investors. |
Risks Related to the Consummation of the PowerUp Domestication
| | ● | The PowerUp Domestication may result in adverse tax consequences for holders of public shares and public warrants, including holders exercising their redemption rights with respect to the public shares. |
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| | ● | New Aspire could be subject to changes in tax rates or the adoption of new tax legislation, whether in or out of the United States, or could otherwise have exposure to additional tax liabilities, which could harm its business. |
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| | ● | Delaware law and New Aspire’s Proposed Governing Documents contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable. |
Risks Related to Redemption
| | ● | Public shareholders who wish to redeem their public shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If shareholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their public shares for a pro rata portion of the funds held in the Trust Account. |
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| | ● | PowerUp does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for PowerUp to complete the Business Combination even though a substantial majority of PowerUp’s public shareholders having redeemed their shares. |
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| | ● | A new 1% U.S. federal excise tax is expected to be imposed on New Aspire in connection with redemption of the public shares. |
Risks if the Adjournment Proposal is Not Approved
| | ● | If the Adjournment Proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination and the PowerUp Domestication, the PowerUp Board will not have the ability to adjourn the extraordinary general meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved, and, therefore, the Business Combination may not be consummated. |
Risks if the PowerUp Domestication and the Business Combination are not Consummated
| | ● | We cannot assure you that we will be able to complete the Business Combination or any other business combination prior to February 17, 2025 (or by the end of any extension period if we further extend the period of time to consummate an initial business combination), the date by which we are required to complete a business combination or be forced to liquidate. |
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| | ● | If PowerUp is not able to complete the Business Combination with Aspire nor able to complete another business combination by February 17, 2025, in each case, as such date may extended by the PowerUp Board in accordance with the Existing Governing Documents, PowerUp would cease all operations except for the purpose of winding up and PowerUp would redeem its public shares and liquidate the Trust Account, in which case PowerUp’s public shareholders may only receive approximately $10.25 per share and PowerUp’s warrants will expire worthless. |
SELECTED HISTORICAL FINANCIAL INFORMATION OF PowerUp
PowerUp is providing the following selected historical financial data to assist you in your analysis of the financial aspects of the Business Combination. PowerUp’s balance sheet data as of September 30, 2024 and the condensed statement of operations data for the nine months ended September 30, 2024 are derived from PowerUp’s unaudited condensed financial statements included elsewhere in this proxy statement/prospectus. PowerUp’s balance sheet data as of December 31, 2023 and the statement of operations data for the year ended December 31, 2023 are derived from PowerUp’s audited financial statements included elsewhere in this proxy statement/prospectus. The information is only a summary and should be read in conjunction with, and is qualified by reference to, “PowerUp’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes thereto included elsewhere in this proxy statement/prospectus and PowerUp’s historical results are not necessarily indicative of future results, and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.
| | | For the Nine
Months Ended | | | For the Year Ended | |
| Condensed Consolidated Statement of Operations Data (in thousands): | | September 30, 2024 | | | December 31, 2023 | |
| Revenue | | $ | - | | | $ | - | |
| General and administrative | | $ | 3,654 | | | $ | 1,340 | |
| Other income/(expense) | | $ | 48 | | | $ | 5,804 | |
| Net income (loss) | | $ | (3,606 | ) | | $ | 4,464 | |
| | | As of | |
| Condensed Consolidated Balance Sheet Data (in thousands): | | September 30, 2024 | | | December 31, 2023 | |
| Total current assets | | $ | 62 | | | $ | 81 | |
| Total assets | | $ | 6,663 | | | $ | 19,982 | |
| Total liabilities | | $ | 6,573 | | | $ | 403 | |
SELECTED HISTORICAL FINANCIAL INFORMATION OF ASPIRE
Aspire is providing the following selected historical financial data to assist you in your analysis of the financial aspects of the Business Combination. Aspire’s balance sheet data as of September 30, 2024 and the statement of operations data for the nine months ended September 30, 2024 are derived from Aspire’s unaudited condensed financial statements included elsewhere in this proxy statement/prospectus. Aspire’s balance sheet data as of December 31, 2023 and the statement of operations for the year ended December 31, 2023 are derived from Aspire’s audited financial statements included elsewhere in this proxy statement/prospectus.
Aspire’s historical results are not necessarily indicative of the results that may be expected for any other period in the future. You should read the selected historical financial data set forth below together with Aspire’s financial statements and the accompanying notes included elsewhere in this proxy statement, the information in the section entitled “Aspire’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information contained elsewhere in this proxy statement/prospectus.
| | | For the Nine
Months Ended | | | For the Year Ended | |
| Condensed Statements of Operations Data (in thousands): | | September 30, 2024 | | | December 31, 2023 | |
| Revenue | | $ | - | | | $ | - | |
| Operating expenses | | $ | 570 | | | $ | 359 | |
| Other expense | | $ | 1 | | | $ | - | |
| Net loss | | $ | (571 | ) | | $ | (359 | ) |
| | | As of | | | As of | |
| Condensed Balance Sheet Data (in thousands): | | September 30, 2024 | | | December 31, 2023 | |
| Total current assets | | $ | 184 | | | $ | 46 | |
| Total assets | | $ | 184 | | | $ | 46 | |
| Total liabilities | | $ | 986 | | | $ | 534 | |
MARKET PRICE AND DIVIDEND INFORMATION
PowerUp units, public shares and public warrants are currently listed on the Nasdaq under the symbols “PWUPU” and “PWUP” and “PWUPW,” respectively.
The most recent closing price of the units, ordinary shares and redeemable warrants as of August 29, 2024, the last trading day before announcement of the execution of the Business Combination Agreement, was $11.11, $11.23, and $0.0601, respectively. As of December 24, 2024, the record date for the extraordinary general meeting, the closing price for each unit, ordinary share and redeemable warrant was $11.44, $11.50, and $0.0299, respectively.
Holders of the units, public shares and public warrants should obtain current market quotations for their securities. The market price of PowerUp’s securities could vary at any time before the Business Combination.
Holders
As of the date of this proxy statement/prospectus there were [●] holders of record of PowerUp’s Class A ordinary shares, no holders of record of PowerUp’s Class B ordinary shares, [●] holders of record of PowerUp’s units and [●] holders of PowerUp’s warrants. See “Beneficial Ownership of Securities.”
Dividend Policy
PowerUp has not paid any cash dividends on its Class A ordinary shares to date and does not intend to pay cash dividends prior to the completion of the Business Combination. The payment of cash dividends in the future will be dependent upon the revenues and earnings, if any, capital requirements and general financial condition of New Aspire subsequent to completion of the Business Combination. The payment of any cash dividends subsequent to the Business Combination will be within the discretion of New Aspire’s Board. PowerUp’s Board is not currently contemplating and does not anticipate declaring share dividends nor is it currently expected that New Aspire’s Board will declare any dividends in the foreseeable future. Further, the ability of New Aspire to declare dividends may be limited by the terms of financing or other agreements entered into by New Aspire or its subsidiaries from time to time.
Price Range of Aspire’s Securities
Historical market price information regarding Aspire is not provided because there is no public market for Aspire’s securities. For information regarding Aspire’s liquidity and capital resources, see “Aspire’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”
RISK FACTORS
Investing in our securities involves a high degree of risk. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cash flows and our prospects could be harmed by them. In that event, the price of our securities could decline and you could lose part or all of your investment. This “Risk Factors” section identifies all material risk factors currently known by PowerUp that make investment in PowerUp’s ordinary shares and warrants speculative or risky, but it does not purport to present an exhaustive description of all risks. Before you invest in us, you should carefully consider the following risks, as well as general economic and business risks, and all of the other information contained in this proxy statement/prospectus. PowerUp shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the relevant proposals described in this proxy statement/prospectus. When determining whether to invest, you should also refer to the other information contained in this proxy statement/prospectus, including the financial statements of PowerUp and Aspire and the related notes thereto, and the other financial information concerning us included elsewhere in this proxy statement/prospectus. These risk factors are not exhaustive and investors are encouraged to perform their own investigation with respect to our business, financial condition and prospects.
Risks Related to Aspire
Unless the context otherwise requires, references to the “Company,” “we”, “us” and “our” in this subsection “— Risks Related to Aspire” generally refer to Aspire Biopharma, Inc. in the present tense and New Aspire from and after the Business Combination.
Aspire has a limited operating history upon which investors can evaluate Aspire’s performance, and accordingly, Aspire’s prospects must be considered in light of the risks that any new company encounters.
Aspire is still in an early phase and we are just beginning to implement our business plan. There can be no assurance that we will ever operate profitably. The likelihood of our success should be considered in light of the problems, expenses, difficulties, complications and delays usually encountered by early-stage companies. Aspire may not be successful in attaining the objectives necessary for it to overcome these risks and uncertainties.
Aspire has incurred net losses in every year since its inception and anticipates that it will continue to incur substantial and increasing net losses in the foreseeable future, especially if Aspire faces difficulties in obtaining capital.
We are a clinical-stage biopharmaceutical company with a limited operating history. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable. We have financed our operations primarily through the sale of equity securities. Since our inception, most of our resources have been dedicated to the preclinical development of our product candidates. The size of our future net losses will depend, in part, on our future expenses and our ability to generate revenue, if any. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations. As a result, we are not profitable and have incurred losses since our inception. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our research and development of, and seek regulatory approvals for, our product candidates.
Even if we succeed in commercializing one or more of our product candidates, we will continue to incur substantial research and development and other expenditures to develop and market additional product candidates. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.
In order to achieve our near and long-term goals, we may need to procure raise capital through various securities offerings or obtain certain debt financing. There is no guarantee we will be able to obtain such funds on acceptable terms or at all. If we are not able to obtain capital in the future, we may not be able to execute our business plan, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise transfer all or substantially all of our remaining assets, which could cause our stockholders to lose all or a portion of their investment.
Aspire will require substantial additional financing to achieve its goals, and a failure to obtain this necessary capital when needed could force Aspire to delay, limit, reduce or terminate its product development or commercialization efforts.
Our operations have consumed substantial amounts of cash since inception. We expect to continue to spend substantial amounts to continue the clinical development of our product candidates. If we are able to receive regulatory approval for any of our product candidates, we will require significant additional amounts of cash in order to launch and commercialize any such product candidates. In addition, other unanticipated costs may arise. Because the design and outcome of our planned and anticipated clinical trials is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates.
Our future capital requirements depend on many factors, including:
| ● | the scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical studies and clinical trials; |
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| ● | the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates if clinical trials are successful; |
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| ● | the cost of commercialization activities for our product candidates, if any of our product candidates is approved for sale, including marketing, sales and distribution costs; |
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| ● | the cost of manufacturing our product candidates for clinical trials in preparation for regulatory approval and in preparation for commercialization; |
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| ● | our ability to establish and maintain strategic licensing or other arrangements and the financial terms of such agreements; |
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| ● | the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; |
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| ● | the timing, receipt and amount of sales of, or royalties on, our future products, if any; and |
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| ● | the emergence of competing therapies and other adverse market developments. |
We do not have any committed external source of funds or other support for our development efforts. Until we can generate sufficient product and royalty revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing or distribution arrangements. Additional financing may not be available to us when we need it or it may not be available on favorable terms.
If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of or suspend one or more of our clinical trials or research and development programs or our commercialization efforts.
Aspire may implement new lines of business or offer new products and services within existing lines of business.
As an early-stage company, we may implement new lines of business at any time. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible. We may not be successful in introducing new products and services in response to industry trends or developments in technology, or those new products may not achieve market acceptance. As a result, we could lose business, be forced to price products and services on less advantageous terms to retain or attract clients or be subject to cost increases. As a result, our business, financial condition or results of operations may be adversely affected.
Aspire relies on other companies to provide components and services for its product candidates.
We depend on suppliers and contractors to meet our contractual obligations to our customers and conduct our operations. Our ability to meet our obligations to our customers may be adversely affected if suppliers or contractors do not provide the agreed-upon supplies or perform the agreed-upon services in compliance with customer requirements and in a timely and cost-effective manner. Likewise, the quality of our products may be adversely impacted if companies to whom we delegate manufacture of major components or subsystems for our products, or from whom we acquire such items, do not provide components which meet required specifications and perform to our and our customers’ expectations. Our suppliers may be unable to quickly recover from natural disasters and other events beyond their control and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. The risk of these adverse effects may be greater in circumstances where we rely on only one or two contractors or suppliers for a particular component. Our products may utilize custom components available from only one source. Continued availability of those components at acceptable prices, or at all, may be affected for any number of reasons, including if those suppliers decide to concentrate on the production of common components instead of components customized to meet our requirements. The supply of components for a new or existing product could be delayed or constrained, or a key manufacturing vendor could delay shipments of completed products to us adversely affecting our business and results of operations.
Aspire relies on various intellectual property rights, including trademarks, in order to operate its business.
We rely on certain intellectual property rights to operate its business. Our intellectual property rights may not be sufficiently broad or otherwise may not provide us a significant competitive advantage. In addition, the steps that we have taken to maintain and protect our intellectual property may not prevent it from being challenged, invalidated, circumvented or designed-around, particularly in countries where intellectual property rights are not highly developed or protected. In some circumstances, enforcement may not be available to us because an infringer has a dominant intellectual property position or for other business reasons, or countries may require compulsory licensing of our intellectual property. Our failure to obtain or maintain intellectual property rights that convey competitive advantage, adequately protect our intellectual property or detect or prevent circumvention or unauthorized use of such property, could adversely impact our competitive position and results of operations.
We also rely on nondisclosure and noncompetition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary rights. There can be no assurance that these agreements will adequately protect our trade secrets and other proprietary rights and will not be breached, that we will have adequate remedies for any breach, that others will not independently develop substantially equivalent proprietary information or that third parties will not otherwise gain access to our trade secrets or other proprietary rights. As we expand our business, protecting our intellectual property will become increasingly important. The protective steps we have taken may be inadequate to deter our competitors from using our proprietary information. In order to protect or enforce our patent rights, we may be required to initiate litigation against third parties, such as infringement lawsuits. Also, these third parties may assert claims against us with or without provocation. These lawsuits could be expensive, take significant time and could divert management’s attention from other business concerns. The law relating to the scope and validity of claims in the technology field in which we operate is still evolving and, consequently, intellectual property positions in our industry are generally uncertain. We cannot assure you that we will prevail in any of these potential suits or that the damages or other remedies awarded, if any, would be commercially valuable.
Instaprin Pharmaceuticals’ former Chief Executive officer, Donald A. Milne III, was convicted, on a conspiracy to commit securities fraud charge.
Instaprin’s former Chief Executive Officer, Donald A. Milne III, has pled guilty to perpetrating a scheme to defraud investors of Instaprin Pharmaceuticals to commit securities fraud and has tarnished the Company’s reputation which has led to a precipitous decline in the Instaprin Pharmaceuticals’ goodwill and business. Instaprin’s former CEO diverted significant funds from the Company for his own personal use which impaired the progress of the Instaprin. The former chief executive officer of Instaprin Pharmaceuticals is not affiliated with Aspire. All of the shares of Instaprin held by Mr. Milne were distributed to the Instaprin shareholders in partial satisfaction of the SEC’s judgement against Mr. Milne and, as such, Mr. Milne was never a stockholder of Aspire. In the event Aspire chooses to use the trademark “Instaprin” there could be reputational harm given its association with Instaprin Pharmaceuticals.
Aspire’s success depends on the experience and skill of the board of directors, its executive officers and key employees. If it is not successful in attracting and retaining highly qualified personnel, Aspire may not be able to successfully implement its business strategy.
We are dependent on our board of directors, executive officers and key employees. These persons may not devote their full time and attention to the matters of Aspire. The loss of our board of directors, executive officers and key employees could harm our business, financial condition, cash flow and results of operations.
Although dependent on certain key personnel, Aspire does not have any key person life insurance policies on any such people.
Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our management, scientific and medical personnel. The loss of the services of any of our executive officers, other key employees, and other scientific and medical advisors, and our inability to find suitable replacements could result in delays in product development and harm our business. Competition for skilled personnel in our market is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all.
We have not purchased any insurance policies with respect to those individuals in the event of their death or disability. Therefore, if any of these personnel die or become disabled, we will not receive any compensation to assist with such person’s absence. The loss of such person could negatively affect us and our operations. We have no way to guarantee key personnel will stay with us, as many states do not enforce non-competition agreements, and therefore acquiring key man insurance will not ameliorate all of the risk of relying on key personnel.
Damage to Aspire’s reputation could negatively impact its business, financial condition and results of operations.
Our reputation and the quality of our brand are critical to our business and success in existing markets, and will be critical to our success as we enter new markets. Any incident that erodes consumer loyalty for our brand could significantly reduce its value and damage our business. We may be adversely affected by any negative publicity, regardless of its accuracy. Also, there has been a marked increase in the use of social media platforms and similar devices, including blogs, social media websites and other forms of internet-based communications that provide individuals with access to a broad audience of consumers and other interested persons. The availability of information on social media platforms is virtually immediate as is its impact. Information posted may be adverse to our interests or may be inaccurate, each of which may harm our performance, prospects or business. The harm may be immediate and may disseminate rapidly and broadly, without affording us an opportunity for redress or correction.
Aspire’s business could be negatively impacted by cyber security threats, attacks and other disruptions.
We continue to face advanced and persistent attacks on our information infrastructure where we manage and store various proprietary information and sensitive/confidential data relating to our operations. These attacks may include sophisticated malware (viruses, worms, and other malicious software programs) and phishing emails that attack our products or otherwise exploit any security vulnerabilities. These intrusions sometimes may be zero-day malware that are difficult to identify because they are not included in the signature set of commercially available antivirus scanning programs. Experienced computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our confidential information or that of our customers or other third-parties, create system disruptions, or cause shutdowns. Additionally, sophisticated software and applications that we produce or procure from third-parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the information infrastructure. A disruption, infiltration or failure of our information infrastructure systems or any of our data centers as a result of software or hardware malfunctions, computer viruses, cyber-attacks, employee theft or misuse, power disruptions, natural disasters or accidents could cause breaches of data security, loss of critical data and performance delays, which in turn could adversely affect our business.
Security breaches of confidential customer information, in connection with Aspire’s electronic processing of credit and debit card transactions, or confidential employee information may adversely affect Aspire’s business.
Our business requires the collection, transmission and retention of personally identifiable information, in various information technology systems that we maintain and in those maintained by third parties with whom we contract to provide services. The integrity and protection of that data is critical to us. The information, security and privacy requirements imposed by governmental regulation are increasingly demanding. Our systems may not be able to satisfy these changing requirements and customer and employee expectations, or may require significant additional investments or time in order to do so. A breach in the security of our information technology systems or those of our service providers could lead to an interruption in the operation of our systems, resulting in operational inefficiencies and a loss of profits. Additionally, a significant theft, loss or misappropriation of, or access to, customers’ or other proprietary data or other breach of our information technology systems could result in fines, legal claims or proceedings.
Aspire’s internal computer systems, or those used by third party contractors or consultants, may fail or suffer security breaches.
Despite the implementation of security measures, our internal computer systems and those of our future CROs and other contractors and consultants are vulnerable to damage from computer viruses and unauthorized access. While we have not to our knowledge experienced any such material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Likewise, we rely on third parties for the manufacture of our product candidates and to conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on our business. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidates could be delayed.
Aspire operates in a highly regulated environment, and if Aspire is found to be in violation of any of the federal, state, or local laws or regulations applicable to it, Aspire’s business could suffer.
We may also be subject to a wide range of federal, state, and local laws and regulations, such as local licensing requirements, and retail financing, debt collection, consumer protection, environmental, health and safety, creditor, wage-hour, anti-discrimination, whistleblower and other employment practices laws and regulations and we expect these costs to increase going forward. The violation of these or future requirements or laws and regulations could result in administrative, civil, or criminal sanctions against us, which may include fines, a cease and desist order against the subject operations or even revocation or suspension of our license to operate the subject business. As a result, we have incurred and will continue to incur capital and operating expenditures and other costs to comply with these requirements and laws and regulations.
Aspire’s technology platforms and product candidates are based on novel technologies, and the development and regulatory approval pathway for such product candidates is unproven (in that all aspirin products previously approved by the FDA were administered orally rather than sublingually) and may never lead to marketable products. Even if Aspire obtains regulatory approval of its product candidates, the products may not gain market acceptance among physicians, patients, hospitals and others in the medical community.
We are developing novel targeted therapies to treat heart attacks and strokes. Any products we develop may not effectively inhibit or treat heart attacks and strokes. The scientific evidence to support the feasibility of developing product candidates based Instaprin is preliminary and limited. Advancing these novel therapies creates significant challenges for us, including, among others:
| | ● | obtaining approval from regulatory authorities to conduct clinical trials with our product candidates; |
| | ● | successful enrollment and completion of preclinical studies and clinical trials with favorable results; |
| | ● | obtaining approvals from regulatory authorities to manufacture and market our product candidates; |
| | ● | obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates; |
| | ● | making arrangements with third-party manufacturers for, or establishing, commercial manufacturing capabilities; |
| | ● | manufacturing our product candidates at an acceptable cost; |
| | ● | launching commercial sales of our product candidates, if and when approved, whether alone or in collaboration with other partners; |
| | ● | acceptance of our product candidates, if and when approved, by patients, the medical community and third-party payors; |
| | ● | effectively competing with other heart attack and stroke therapies; |
| | ● | obtaining and maintaining coverage and adequate reimbursement by third-party payors, including government payors, for our product candidates; |
| | ● | protecting rights in our intellectual property portfolio; |
| | ● | maintaining a continued acceptable safety profile of our product candidates, if approved, following approval; and |
| | ● | maintaining and growing an organization of scientists and business people who can develop and commercialize our products and technology. |
The use of the Instaprin product candidates as potential heart and stroke treatments, even if approved, may not become broadly accepted by physicians, patients, hospitals and others in the medical community. Additional factors will influence whether our product candidates are accepted in the market, including:
| | ● | the clinical indications for which our product candidates are approved; |
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| ● | physicians, hospitals, medical treatment centers and patients considering our product candidates as a safe and effective treatment; |
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| ● | the potential and perceived advantages of our product candidates over alternative treatments; |
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| | ● | the prevalence and severity of any side effects; |
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| ● | product labeling or product insert requirements of the FDA or other regulatory authorities; |
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| | ● | limitations or warnings contained in the labeling approved by the FDA; |
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| ● | the timing of market introduction of our product candidates as well as competitive products; |
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| | ● | the cost of treatment in relation to alternative treatments; |
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| ● | the availability of adequate coverage, reimbursement and pricing by third-party payors and government authorities; |
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| ● | the willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors and government authorities; |
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| ● | relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; and the effectiveness of our sales and marketing efforts. |
Even if our products achieve market acceptance, we may not be able to maintain that market acceptance over time if new products or technologies are introduced that are more favorably received than our products, are more cost effective or render our products obsolete.
Current Development Status of Instaprin
Aspire’s cGMP batch of patent-pending Instaprin is currently being manufactured by Glatt in its New Jersey facility. Glatt will be using this batch to finalize the packaging and manufacturing process, and to provide the products to be used in the upcoming clinical tests. Glatt’s scientific team will also be conducting the stability testing required by the FDA on this batch to determine product shelf life. This is in addition to prior similar initial testing done in 2022 by Glatt which provided important background data on the stability and manufacturing process for Instaprin.
Aspire’s consultants are currently completing (1) a comprehensive review of relevant regulatory issues and regulatory strategy (including regulations, guidance documents, FDA reviews of approved NDAs for other relevant products, Pediatric Research Equity Act requirements, FDA’s trade name approval requirements, opportunities for accelerated regulatory processes, etc.), (2) a comprehensive summary of relevant safety, efficacy and pharmacokinetic data to support IRB approvals, IND, and 505(b)(2) NDA approval, (3) a target product profile (including product description, composition, strength, route of administration, prescription v. OTC, indications, dosing and claims to differentiate from other aspirin products), and (4) an integrated product development plan (including plans to support each module of an NDA submission: CMC, preclinical safety, human PK, clinical safety, clinical efficacy, timelines, critical path, Gantt chart, etc.). These reviews are all being done in preparation for Aspire’s pre-IND meeting with the FDA, its clinical testing, and its NDA.
Aspire plans to conduct an in vivo single-dose bioavailability study in healthy human volunteers in approximately March 2025 (“Trial 1”). This clinical trial will evaluate pharmacokinetic endpoints including but not limited to maximum concentrations of aspirin and/or its metabolites in plasma (“Cmax”), time of maximum concentrations (“Tmax”), and area under the time curve concentrations (“AUC”) following sublingual dosing of two different pharmaceutical formulations of Instaprin compared to standard oral aspirin. Pharmacodynamic effect on serum thromboxane B2 (TXB2, a measure of platelet inhibition) will be evaluated as a secondary endpoint. Data from this bioavailability study will be used to select the optimal pharmaceutical formulation of Instaprin and to design a pivotal Trial 2 to support filing of an NDA. Trial 1 will be exempt from Investigational New Drug (IND) filing requirements under 21 C.F.R. 320.31(d) because it is a human bioavailability trial of an FDA-approved active ingredient that is not a new chemical entity, a radioactively labeled drug product, or cytotoxic drug product, using a dose not exceeding the dose specified in the labeling of the approved drug product, conducted in compliance with the requirements for review by an Institutional Review Board (IRB), with reserve test article samples retained by the study sponsor.
Following completion of Trial 1, Aspire plans to request a pre-IND meeting with the FDA in the second quarter of 2025 to discuss plans for continued development of Instaprin leading to submission of a section 505(b)(2) NDA. Aspire plans to propose a second clinical trial (“Trial 2”) in approximately 32 healthy human volunteers to evaluate the pharmacodynamic effect of a single dose of Instaprin on platelet inhibition compared to that of standard oral aspirin. The proposed primary endpoint for Trial 2 would be time to TXB2 inhibition. Variability of TXB2 inhibition and pharmacokinetic parameters (Cmax, Tmax, AUC, etc.) for aspirin and/or its metabolites in plasma will be analyzed as secondary endpoints. Following completion of Trial 2, Aspire intends to submit a section 505(b)(2) NDA for the Instaprin product to the FDA.
Current Development Status of Other Products
Melatonin: Aspire’s scientists have developed a working formulation for a sublingually administered melatonin sleep-aid product. In the next three months, Aspire intends to develop and validate the manufacturing process based on this formulation. In February 2025, Aspire plans to conduct a limited pharmokinetic study using at least eight volunteers, comparing to orally administered melatonin products on the market, in order to support its claims and labeling. No FDA approval is required for Melatonin, which is sold as a supplement. Melatonin is a wildly popular sleep aid and Aspire has begun exploring licensing possibilities and has also begun discussions with a manufacturing facility in Puerto Rico. Aspire intends to file for patent protection in the near future.
Vitamins: Aspire’s scientists have developed a working formulation for sublingually administered vitamins D, E and K. In the first two quarters of 2025, Aspire intends to develop and validate a manufacturing process and conduct a limited pharmokinetic study. Aspire intends to file for patent protection in the near future.
Testosterone: Aspire’s scientists have developed a formulation for sublingually administered testosterone. A patent application for the formulation will be filed in the next 60 days. In the first and second quarters of 2025, Aspire intends to develop and validate the manufacturing process based on this formulation, and produce a cGMP batch for use in clinical testing and a stability study. Aspire intends to conduct a Phase One clinical test in approximately the third quarter of 2025 for pharmokinetical validation of product properties, using approximately eight volunteers, and to establish criteria for an NDA with the FDA. Aspire anticipates, based on these results, to request a pre-IND meeting with the FDA in the fourth quarter of 2025, followed by Phase Two clinical testing. Aspire anticipates this testing to use approximately 32 volunteers. Aspire intends to submit an NDA for the testosterone product under 505(b)(2) to the FDA in the first quarter of 2026. Testosterone is not a candidate for fast-track approval, therefore the NDA approval process will likely take as much as three years.
Semaglutide: Aspire’s scientists are in the final phases of developing a working formulation for a sublingual semaglutide product. The timeline to market will be similar to that of testosterone, above, as semaglutide is not likely a candidate for fast-track approval.
Other Products: Aspire’s scientists are currently considering formulations for anti-nausea products, anti-psychotic products, ED drugs, seizure medication, and several other classes of drugs, all using our sublingual mode of administration.
If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully develop and commercialize our product candidates, which could materially harm our business, financial condition and results of operations.
Aspire’s business is highly dependent on the success of its lead product candidate, Instaprin which will require significant additional clinical testing before Aspire can seek regulatory approval and potentially launch commercial sales.
We do not have any products that have gained regulatory approval. Our business and future success depends on our ability to obtain regulatory approval of and then successfully commercialize our lead product candidate, Instaprin, which is in the early stages of Preclinical development. We are currently conducting our preclinical tests to compile and file an IND (investigational new drug application). Our ability to develop, obtain regulatory acceptance for Instaprin to enter clinical trials will depend on several factors, including the following:
| ● | successfully demonstrating that the therapy is reasonably safe for human clinical studies; |
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| ● | effectively demonstrating that the chemical composition and manufacturing methods and controls are consistent; and |
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| ● | providing protocol detail proposed for clinical trials that ensure subjects will not be exposed to unnecessary risk and that the professionals overseeing the administration of the study are qualified. |
Our product candidates, including Instaprin, will require additional clinical and non-clinical development, regulatory review and approval in multiple jurisdictions, substantial investment, access to sufficient commercial manufacturing capacity and significant marketing efforts before we can generate any revenue from product sales. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our product candidates. If we are unable to develop or receive marketing approval for Instaprin or other products we develop in a timely manner or at all, we could experience significant delays or an inability to commercialize Instaprin or other products, which would materially and adversely affect our business, financial condition and results of operations.
Clinical development involves a lengthy and expensive process with uncertain outcomes, and results of earlier studies and trials may not be predictive of future clinical trial results. Aspire’s clinical trials may fail to demonstrate adequately the safety and efficacy of one or more of its product candidates, which would prevent or delay regulatory approval and commercialization.
Before obtaining regulatory approvals for the commercial sale of our product candidates, including Instaprin, we must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that our product candidates are both safe and effective for use in each target indication. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. There is typically an extremely high rate of attrition from the failure of product candidates proceeding through clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. We cannot be certain that we will not face similar setbacks. Most product candidates that commence clinical trials are never approved as commercial products.
We may experience delays in our ongoing clinical trials and we do not know whether planned clinical trials will begin on time, need to be redesigned, enroll patients on time or be completed on schedule, if at all. Clinical trials can be delayed for a variety of reasons, including delays related to:
| ● | obtaining regulatory approval to commence a trial; reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; |
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| ● | obtaining institutional review board, or IRB, approval at each site; |
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| ● | recruiting suitable patients to participate in a trial; |
| ● | having patients complete a trial or return for post-treatment follow-up; |
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| ● | clinical sites deviating from trial protocol or dropping out of a trial; |
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| ● | adding new clinical trial sites; or |
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| ● | manufacturing sufficient quantities of product candidate for use in clinical trials. |
We could encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are being conducted, by the Data Safety Monitoring Board, or DSMB, for such trial or by the FDA or other regulatory authorities. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Furthermore, we rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and while we have agreements governing their committed activities, we have limited influence over their actual performance. If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenues from any of these product candidates will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive cash compensation in connection with such services. If certain of these relationships exceed specific financial thresholds, they must be reported to the FDA. If these relationships and any related compensation paid results in perceived or actual conflicts of interest, or the FDA concludes that the financial relationship may have affected interpretation of the study, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay in approval, or rejection, of our marketing applications by the FDA. Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.
In addition, even if the trials are successfully completed, we cannot guarantee that the FDA or foreign regulatory authorities will interpret the results as we do, and we may need to conduct additional trials before we submit applications seeking regulatory approval of our product candidates.
To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, approval of our product candidates may be significantly delayed, or we may be required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.
Aspire’s product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential, if approved, or result in significant negative consequences.
Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.
If unacceptable side effects arise in the development of our product candidates, we could suspend or terminate our clinical trials or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval of our product candidates for any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff. We expect to have to train medical personnel using our product candidates to understand the side effect profiles for our clinical trials and upon any commercialization of any of our product candidates. Inadequate training in recognizing or managing the potential side effects of our product candidates could result in patient injury or death. Any of these occurrences may harm our business, financial condition and prospects significantly.
Additionally, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including:
| ● | regulatory authorities may withdraw approvals of such product; |
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| ● | regulatory authorities may require additional warnings on the label; |
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| ● | we may be required to create a medication guide outlining the risks of such side effects for distribution to patients; |
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| ● | we could be sued and held liable for harm caused to patients; and |
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| ● | our reputation may suffer. |
Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, results of operations and prospects.
If Aspire encounters difficulties enrolling patients in its clinical trials, Aspire’s clinical development activities could be delayed or otherwise adversely affected.
The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. The enrollment of patients depends on many factors, including:
| ● | the patient eligibility criteria defined in the protocol; |
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| ● | the size of the patient population required for analysis of the trial’s primary endpoints; |
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| ● | the proximity of patients to study sites; |
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| ● | the design of the trial; |
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| ● | our ability to recruit clinical trial investigators with the appropriate competencies and experience; |
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| ● | clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; |
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| ● | our ability to obtain and maintain patient consents; and |
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| ● | the risk that patients enrolled in clinical trials will drop out of the trials before completion. |
In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials in such clinical trial site. Moreover, because our product candidates represent a departure from more commonly used methods for heart attack and stroke treatments, potential patients and their doctors may be inclined to use conventional therapies, rather than enroll patients in any future clinical trials.
Delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our product candidates.
Aspire relies and will rely on third parties to conduct its clinical trials, which are expensive, time consuming, and difficult to design and implement. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, Aspire may not be able to obtain regulatory approval of or commercialize its product candidates.
We depend and plan to continue to depend upon independent investigators, other third parties and collaborators, such as universities, medical institutions, CROs and strategic partners, to conduct our preclinical and clinical trials under agreements with us. We expect to have to negotiate budgets and contracts with CROs and study sites, which may result in delays to our development timelines and increased costs. We rely and plan to continue relying heavily on these third parties over the course of our clinical trials, and we control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities. We and these third parties are required to comply with good clinical practices, or GCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product candidates in clinical development. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of these third parties fail to comply with applicable GCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that, upon inspection, such regulatory authorities will determine that any of our clinical trials comply with the GCP regulations. In addition, our clinical trials must be conducted with biologic product produced under current good manufacturing practices (cGMPs) regulations and guidelines and will require a large number of test patients. Our failure or any failure by these third parties to comply with these regulations or to recruit a sufficient number of patients may require us to repeat clinical trials, which would delay the regulatory approval process. Moreover, our business may be implicated if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.
Any third parties conducting our clinical trials are not our employees and, except for remedies available to us under our agreements with such third parties, we cannot control whether or not they devote sufficient time and resources to our ongoing preclinical, clinical and nonclinical programs. These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical studies or other drug development activities, which could affect their performance on our behalf. If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully commercialize our product candidates. As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.
Switching or adding third parties to conduct our clinical trials involves substantial cost and requires extensive management time and focus. In addition, there is a natural transition period when a new third party commences work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with third parties conducting our clinical trials, we cannot assure you that we will not encounter similar challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.
Furthermore, human clinical trials are expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. Because our product candidates are based on new technologies and engineered on a patient-by-patient basis, we expect that they will require extensive research and development and have substantial manufacturing and processing costs. In addition, costs to treat patients with heart attacks/ strokes and to treat potential side effects that may result from our product candidates may be significant. Accordingly, our clinical trial costs are likely to be significantly higher than for more conventional therapeutic technologies or drug products.
If Aspire fails to develop additional product candidates, its commercial opportunity will be limited.
We expect to initially develop our lead product candidate, Instaprin, a fast-acting form of powdered aspirin that could instantly stop heart attacks and strokes. However, one of our strategies is to pursue clinical development of additional product candidates. Developing, obtaining regulatory approval for and commercializing additional product candidates will require substantial funding and are prone to the risks of failure inherent in medical product development. We cannot assure you that we will be able to successfully advance any of these additional product candidates through the development process.
Even if we obtain FDA approval to market additional product candidates for the treatment of heart attacks and strokes, we cannot assure you that any such product candidates will be successfully commercialized, widely accepted in the marketplace or more effective than other commercially available alternatives. If we are unable to successfully develop and commercialize additional product candidates, our commercial opportunity will be limited. Moreover, a failure in obtaining regulatory approval of additional product candidates may have a negative effect on the approval process of any other, or result in losing approval of any approved, product candidate.
Aspire is subject to a multitude of manufacturing and supply chain risks, any of which could substantially increase its costs and limit the supply of its product candidates.
The process of manufacturing our product candidates is complex, highly regulated and subject to several risks, including:
| ● | The manufacturing of drug products is susceptible to product loss due to contamination, equipment failure, improper installation or operation of equipment or vendor or operator error. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If foreign microbial, viral or other contaminations are discovered in our product candidates or in the manufacturing facilities in which our products are made, these manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. |
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| ● | The manufacturing facilities in which our product candidates are made could be adversely affected by equipment failures, labor shortages, natural disasters, power failures and numerous other factors. |
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| | ● | We and our contract manufacturers must comply with the FDA’s cGMP (current good manufacturing practices) regulations and guidelines. Any failure to follow cGMP or other regulatory requirements or any delay, interruption or other issues that arise in the manufacture, fill-finish, packaging, or storage of our products as a result of a failure of our facilities or the facilities or operations of third parties to comply with regulatory requirements or pass any regulatory authority inspection could significantly impair our ability to develop and commercialize our products, including leading to significant delays in the availability of products for our clinical studies or the termination or hold on a clinical study, or the delay or prevention of a filing or approval of marketing applications for our product candidates. Significant noncompliance could also result in the imposition of sanctions, including fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approvals for our product candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of products, operating restrictions and criminal prosecutions, any of which could damage our reputation. If we are not able to maintain regulatory compliance, we may not be permitted to market our products and/or may be subject to product recalls, seizures, injunctions, or criminal prosecution. |
Any adverse developments affecting manufacturing operations for our product candidates and/or damage that occurs during shipping may result in delays, inventory shortages, lot failures, withdrawals or recalls or other interruptions in the supply of our drug substance and drug product. We may also have to write off inventory, incur other charges and expenses for supply of drug product that fails to meet specifications, undertake costly remediation efforts, or seek more costly manufacturing alternatives. Inability to meet the demand for any of our product candidates, if approved, could damage our reputation and the reputation of our products among physicians, healthcare payors, patients or the medical community, which could adversely affect our ability to operate our business and our results of operations.
Aspire currently has no marketing and sales organization and has no experience in marketing products. If Aspire is unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell its product candidates, Aspire may not be able to generate product revenue.
We currently have no sales, marketing or distribution capabilities and have no experience in marketing products. If we decide to develop an in-house marketing organization and sales force, which will require significant capital expenditures, management resources and time, we will have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train and retain marketing and sales personnel.
If we are unable or decide not to establish internal sales, marketing and distribution capabilities, we will pursue collaborative arrangements regarding the sales and marketing of our products; however, we cannot assure you that we will be able to establish or maintain such collaborative arrangements, or if we are able to do so, that they will have effective sales forces. Any revenue we receive will depend upon the efforts of such third parties, which may not be successful. We may have little or no control over the marketing and sales efforts of such third parties and our revenue from product sales may be lower than if we had commercialized our product candidates ourselves. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates.
We cannot assure you that we will be able to develop in-house sales and distribution capabilities or establish or maintain relationships with third-party collaborators to commercialize any product in the United States or elsewhere.
A variety of risks associated with marketing Aspire’s product candidates internationally could materially adversely affect Aspire’s business.
We might plan to seek regulatory approval of our product candidates outside of the United States and, if so, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including:
| | ● | differing regulatory requirements in foreign countries; |
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| ● | unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; |
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| ● | economic weakness, including inflation, or political instability in particular foreign economies and markets; |
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| ● | compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; |
| | ● | foreign taxes, including withholding of payroll taxes; |
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| ● | foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; |
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| ● | difficulties staffing and managing foreign operations; |
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| ● | workforce uncertainty in countries where labor unrest is more common than in the United States; |
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| ● | potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations; |
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| ● | challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; |
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| ● | production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and |
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| ● | business interruptions resulting from geo-political actions, including war and terrorism. |
These and other risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations.
Aspire faces significant competition from other biotechnology and pharmaceutical companies, and its operating results will suffer if it fails to compete effectively.
The biopharmaceutical industry is characterized by intense competition and rapid innovation. Our competitors may be able to develop other compounds, drugs or delivery systems that are able to achieve similar or better results. Many major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies and universities and other research institutions continue to invest time and resources in developing novel approaches to preventing heart attacks and strokes. Many of our competitors have substantially greater financial, technical and other resources than we do, such as larger research and development staff and experienced marketing and manufacturing organizations and well-established sales forces. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized or less costly than our product candidates or may develop proprietary technologies or secure patent protection that we may need for the development of our technologies and products. We believe the key competitive factors that will affect the development and commercial success of our product candidates are efficacy, safety, tolerability, reliability, convenience of use, price and reimbursement.
Even if we obtain regulatory approval of our product candidates, the availability and price of our competitors’ products could limit the demand and the price we are able to charge for our product candidates. We may not be able to implement our business plan if the acceptance of our product candidates is inhibited by price competition or the reluctance of physicians to switch from existing methods of treatment to our product candidates, or if physicians switch to other new drug or biologic products or choose to reserve our product candidates for use in limited circumstances.
Aspire’s employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
We are exposed to the risk that our employees, independent contractors, consultants, commercial partners and vendors may engage in fraudulent or illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates: (1) the laws of the FDA and other similar foreign regulatory bodies, including those laws requiring the reporting of true, complete and accurate information to such regulators; (2) manufacturing standards; (3) healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws; or (4) laws that require the true, complete and accurate reporting of financial information or data. If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase. These laws may impact, among other things, our current activities with principal investigators and research patients, as well as proposed and future sales, marketing and education programs. In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commissions, certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.
If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment of operations, any of which could adversely affect our ability to operate our business and our results of operations. Whether or not we are successful in defending against such actions or investigations, we could incur substantial costs, including legal fees, and divert the attention of management in defending ourselves against any of these claims or investigations.
If product liability lawsuits are brought against Aspire, it may incur substantial liabilities and may be required to limit commercialization of Aspire’s product candidates.
We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:
| | ● | decreased demand for our product candidates; |
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| | ● | injury to our reputation; |
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| | ● | withdrawal of clinical trial participants; |
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| | ● | initiation of investigations by regulators; costs to defend the related litigation; |
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| | ● | a diversion of management’s time and our resources; |
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| | ● | substantial monetary awards to trial participants or patients; |
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| | ● | product recalls, withdrawals or labeling, marketing or promotional restrictions; |
| | ● | loss of revenue; |
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| | ● | exhaustion of any available insurance and our capital resources; |
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| | ● | the inability to commercialize any product candidate; and |
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| | ● | a decline in our share price. |
Our inability to obtain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or with corporate collaborators.
We intend to obtain customary product liability insurance, which we believe is customary for similarly situated companies and adequate to provide us with insurance coverage for foreseeable risks, but which may not be adequate to cover all liabilities that we may incur. Insurance coverage is increasingly expensive. We may not be able to maintain insurance at a reasonable cost or in an amount adequate to satisfy any liability that may arise, if at all. Our insurance policy contains various exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.
Aspire relies and expects to continue to rely on third parties to manufacture its clinical product supplies, and Aspire intends to rely on third parties to produce and process its product candidates, if approved, and commercialization of any of Aspire’s product candidates could be stopped, delayed or made less profitable if those third parties fail to obtain approval of government regulators or fail to provide Aspire with sufficient quantities of drug product at acceptable quality levels or prices.
We do not currently have nor do we plan to acquire the infrastructure or capability internally to manufacture our clinical supplies for use in the conduct of our clinical trials, and we lack the resources and the capability to manufacture any of our product candidates on a clinical or commercial scale. We currently rely on outside vendors to manufacture our clinical supplies of our product candidates and plan to continue relying on third parties to manufacture our product candidates on a commercial scale, if approved.
The facilities used by our contract manufacturers to manufacture our product candidates must be approved by the FDA pursuant to inspections that will be conducted after we submit our marketing applications to the FDA. We do not control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with the regulatory requirements, known as cGMPs, for manufacture of our product candidates. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved.
We do not yet have sufficient information to reliably estimate the cost of the commercial manufacturing of our product candidates, and the actual cost to manufacture our product candidates could materially and adversely affect the commercial viability of our product candidates. As a result, we may never be able to develop a commercially viable product.
In addition, our reliance on third-party manufacturers exposes us to the following additional risks:
| ● | We may be unable to identify manufacturers on acceptable terms or at all. |
| ● | Our third-party manufacturers might be unable to timely formulate and manufacture our product or produce the quantity and quality required to meet our clinical and commercial needs, if any. |
| ● | Contract manufacturers may not be able to execute our manufacturing procedures appropriately. |
| ● | Our future contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our products. |
| ● | Manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards. We do not have control over third-party manufacturers’ compliance with these regulations and standards. |
| ● | We may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our products. |
| ● | Our third-party manufacturers could breach or terminate their agreements with us. |
Each of these risks could delay our clinical trials, the approval, if any of our product candidates by the FDA or the commercialization of our product candidates or result in higher costs or deprive us of potential product revenue. In addition, we rely on third parties to perform release testing on our product candidates prior to delivery to patients. If these tests are not appropriately conducted and test data are not reliable, patients could be put at risk of serious harm and could result in product liability suits.
The manufacture of medical products is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of biologic products often encounter difficulties in production, particularly in scaling up and validating initial production and absence of contamination. These problems include difficulties with production costs and yields, quality control, including stability of the product, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations. Furthermore, if contaminants are discovered in our supply of our product candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We cannot assure you that any stability or other issues relating to the manufacture of our product candidates will not occur in the future. Additionally, our manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments. If our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide our product candidates to patients in clinical trials would be jeopardized. Any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely.
If Aspire’s third-party manufacturers use hazardous and biological materials in a manner that causes injury or violates applicable law, Aspire may be liable for damages.
Our research and development activities involve the controlled use of potentially hazardous substances, including chemical and biological materials, by our third-party manufacturers. Our manufacturers are subject to federal, state and local laws and regulations in the United States governing the use, manufacture, storage, handling and disposal of medical and hazardous materials. Although we believe that our manufacturers’ procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury resulting from medical or hazardous materials. As a result of any such contamination or injury, we may incur liability or local, city, state or federal authorities may curtail the use of these materials and interrupt our business operations. In the event of an accident, we could be held liable for damages or penalized with fines, and the liability could exceed our resources. We do not have any insurance for liabilities arising from medical or hazardous materials. Compliance with applicable environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development and production efforts, which could harm our business, prospects, financial condition or results of operations.
Risks Related to Being a Public Company After the Business Combination
The price of New Aspire Common Stock and New Aspire warrants may fluctuate significantly following the Business Combination and you could lose all or part of your investment as a result.
The market price of New Aspire Common Stock and New Aspire warrants may be volatile. The stock market in general, and the market for biopharmaceutical companies in particular, have experienced extreme volatility that has often been unrelated to the operating performance or prospects of particular companies. As a result of this volatility, you could lose all or part of your investment. Many factors may have a material adverse effect on the market price of New Aspire’s securities, including, but not limited to:
| | ● | the commencement, enrollment, delay, or results of our ongoing or future clinical trials, or changes in the development status of our product candidates; |
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| | ● | our decision to initiate, not to initiate, or to terminate a clinical trial; |
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| | ● | unanticipated serious safety concerns related to the use of our product candidates; |
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| | ● | any delay in our regulatory filings for our product candidates and any adverse or perceived adverse development with respect to the applicable regulatory authority’s review of such filings; |
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| | ● | regulatory actions, including failure to receive regulatory approval, with respect to our product candidates or our competitors’ products or product candidates; |
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| | ● | our failure to commercialize our products; |
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| | ● | the success of competitive products or technologies; |
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| | ● | announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures, collaborations, capital commitments, significant development milestones, or product approvals; |
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| | ● | our failure to obtain new commercial partners; |
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| | ● | our failure to obtain adequate manufacturing capacity or product supply for any approved product or inability to do so at acceptable cost; |
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| | ● | our failure to achieve expected product sales and profitability; |
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| | ● | regulatory or legal developments applicable to our product candidates; |
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| | ● | the level of expenses related to our product candidates or clinical development programs; |
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| | ● | significant lawsuits, including without limitation patent or stockholder litigation; |
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| | ● | the impact of the incidence and development of COVID-19 on our business and product candidates; |
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| | ● | any changes in our Board of Directors or senior management; |
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| | ● | actual or anticipated fluctuations in our cash position or operating results; |
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| | ● | changes in financial estimates or recommendations by securities analysts; |
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| | ● | fluctuations in the valuation or financial results of companies perceived by investors to be comparable to us; |
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| | ● | inconsistent trading volume levels of our shares; |
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| | ● | announcement or expectation of additional financing efforts; |
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| | ● | sales of New Aspire’s shares by us, New Aspire’s executive officers or directors or New Aspire’s stockholders; |
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| | ● | fluctuations and market conditions in the U.S. equity markets generally and in the biotechnology sector; |
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| | ● | general economic, political and social conditions; and |
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| | ● | other events or factors, many of which are beyond our control, or unrelated to our operating performance or prospects. |
In recent years, the stock market in general has experienced significant price and volume fluctuations that have often been unrelated or disproportionate to changes in the operating performance of the companies whose stock is experiencing those price and volume fluctuations. Broad market and industry factors may seriously affect the market price of New Aspire Common Stock and warrants, regardless of actual operating performance. These fluctuations may be even more pronounced in the trading markets for New Aspire Common Stock and warrants shortly following this offering. Following periods of such volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Because of the potential volatility of New Aspire Common Stock and warrant price, New Aspire may become the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from New Aspire’s business. The realization of any of the above risks or any of a broad range of other risks, including those described in this “Risk Factors” section, could have a dramatic and material adverse impact on the market price of our common stock following the Business Combination.
New Aspire will incur increased costs as a result of operating as a public company, and New Aspire’s management will be required to devote substantial time to new compliance initiatives and corporate governance practices.
As a public company, and particularly after New Aspire is no longer an emerging growth company (or, to a lesser extent, a smaller reporting company), New Aspire will incur significant legal, accounting, and other expenses that Aspire did not incur as a private company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq, and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. We expect that New Aspire will need to hire additional accounting, finance, and other personnel in connection with New Aspire’s becoming, and New Aspire’s efforts to comply with the requirements of being, a public company, and New Aspire’s management and other personnel will need to devote a substantial amount of time towards maintaining compliance with these requirements. These requirements will increase New Aspire’s legal and financial compliance costs and will make some activities more time-consuming and costly. For example, New Aspire expects that the rules and regulations applicable to it as a public company may make it more difficult and more expensive for it to obtain director and officer liability insurance, which could make it more difficult for it to attract and retain qualified members of New Aspire’s Board of Directors. Aspire is currently evaluating these rules and regulations and cannot predict or estimate the amount of additional costs New Aspire may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
Your percentage ownership in us may be diluted by future issuances of capital stock, which could reduce your influence over matters on which stockholders vote.
Pursuant to the Proposed Governing Documents, the New Aspire board of directors will have the authority, without action or vote of the New Aspire stockholders, to issue all or any part of our authorized but unissued shares of common stock, including shares issuable upon the exercise of options, or shares of our authorized but unissued preferred stock. Issuances of common stock or voting preferred stock would reduce your influence over matters on which our stockholders vote and, in the case of issuances of preferred stock, would likely result in your interest in us being subject to the prior rights of holders of that preferred stock.
New Aspire may issue additional shares of New Aspire Common Stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of your shares.
New Aspire may issue additional shares of New Aspire Common Stock or other equity securities of equal or senior rank in the future in connection with, among other things, raising additional capital, future acquisitions, repayment of outstanding indebtedness, or award issuances under the 2024 Plan, without stockholder approval, in a number of circumstances. The additional shares or other securities convertible into or exchangeable for our public shares may be offered at price that may not be the same as the price per share in the PowerUp initial public offering. New Aspire may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by the investors in the PowerUp initial public offering, and investors purchasing shares or other securities in the future could have rights superior to existing shareholders. The price per share at which the additional shares or securities convertible or exchangeable into public shares, will be sold in future transactions may be higher or lower than the price per share paid by investors in the PowerUp initial public offering. If any of the above should occur, New Aspire stockholders, including investors who purchased public shares in the PowerUp initial public offering, will experience additional dilution, and any such issuances may result in downward pressure on the price of our common stock.
The issuance of additional shares of New Aspire Common Stock or other equity securities of equal or senior rank could have the following effects:
| | ● | your proportionate ownership interest in New Aspire will decrease; |
| | ● | the relative voting strength of each previously outstanding share of New Aspire Common Stock may be diminished; or |
| | ● | the market price of your shares of New Aspire Common Stock may decline. |
As we have no current plans to pay regular cash dividends on our common stock, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.
PowerUp has never declared or paid cash dividends on its capital stock. Following the Business Combination, we may retain all of our future earnings, if any, to finance the growth and development of our business. We do not anticipate paying any regular cash dividends on our common stock. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors as that our board of directors may deem relevant. In addition, our ability to pay dividends is, and may be, limited by covenants of existing and any future outstanding indebtedness we or our subsidiaries incur. Therefore, any return on investment in our common stock is solely dependent upon the appreciation of the price of our common stock on the open market, which may not occur.
New Aspire will qualify as an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act, and if it takes advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies” it could make our securities less attractive to investors and may make it more difficult to compare our performance to the performance of other public companies.
New Aspire will qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we will be eligible for and intend to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including, but not limited to, (a) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (b) reduced disclosure obligations regarding executive compensation in New Aspire’s periodic reports and proxy statements and (c) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, New Aspire’s stockholders may not have access to certain information they may deem important. We cannot predict whether investors will find New Aspire’s securities less attractive because it will rely on these exemptions. If some investors find New Aspire’s securities less attractive as a result of New Aspire’s reliance on these exemptions, the trading prices of New Aspire’s securities may be lower than they otherwise would be, there may be a less active trading market for New Aspire’s securities and the trading prices of New Aspire’s securities may be more volatile.
New Aspire will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of New Aspire Common Stock held by non-affiliates exceeds $700 million as of June 30 of that fiscal year, (ii) the last day of the fiscal year in which it has total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which it has issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first sale of PowerUp’s Common Stock in the IPO. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as New Aspire is an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to opt out of such extended transition period and, therefore, New Aspire may not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. This may make comparison of New Aspire’s financial statements with the financial statements of other companies who comply with public company adoption dates difficult or impossible because of the potential differences in accounting standards used. Investors may find New Aspire Common Stock less attractive because it will rely on these exemptions, which may result in a less active trading market for New Aspire Common Stock and its price may be more volatile.
Additionally, New Aspire will qualify as a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. New Aspire will remain a smaller reporting company and may take advantage of certain scaled disclosures available to smaller reporting companies for so long as the market value of our voting and non-voting common equity held by non-affiliates is less than $250.0 million, measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our common equity held by non-affiliates is less than $700.0 million, measured on the last business day of our second fiscal quarter. To the extent New Aspire takes advantage of such reduced disclosure obligations, it may also make comparison of its financial statements with other public companies difficult or impossible.
New Aspire’s management team has no experience managing a public company.
Members of the New Aspire management team have no experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. The New Aspire management team may not successfully or efficiently manage our transition to being a public company that is subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm our business, financial condition, and results of operations.
If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendation regarding New Aspire Common Stock or if our results of operations do not meet their expectations, including projections in those reports that differ from our actual results, our share price and trading volume could decline.
The trading market for New Aspire Common Stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. Securities and industry analysts do not currently, and may never, publish research on New Aspire.
If no securities or industry analysts commence coverage of New Aspire, the trading price of New Aspire Common Stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, and one or more of these analysts cease coverage of New Aspire or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause the price of our common stock or trading volume to decline. Moreover, if one or more of the analysts who cover us publish negative reports, downgrade our stock, or if our results of operations do not meet their expectations, the price of New Aspire Common Stock could decline. Securities research analysts may establish and publish their own periodic projections for New Aspire following consummation of the Business Combination. These projections may vary widely and may not accurately predict the results we actually achieve. Our share price may decline if our actual results do not match the projections of these securities research analysts.
New Aspire’s business and operations could be negatively affected if it becomes subject to any securities litigation or stockholder activism, which could cause New Aspire to incur significant expense, hinder execution of business and growth strategy and impact its stock price.
In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Stockholder activism, which could take many forms or arise in a variety of situations, has been increasing recently. Volatility in the stock price of New Aspire Common Stock or other reasons may in the future cause it to become the target of securities litigation or stockholder activism. Securities litigation and stockholder activism, including potential proxy contests, could result in substantial costs and divert management’s and board of directors’ attention and resources from New Aspire’s business. Additionally, such securities litigation and stockholder activism could give rise to perceived uncertainties as to New Aspire’s future, adversely affect its relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, New Aspire may be required to incur significant legal fees and other expenses related to any securities litigation and activist stockholder matters. Further, its stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism.
Risks Related to the Business Combination and PowerUp
Unless the context otherwise requires, any reference in this section of this proxy statement/prospectus to “PowerUp,” “we,” “us” or “our” refers to PowerUp prior to the Business Combination and to New Aspire and its subsidiaries following the Business Combination.
PowerUp’s Initial Shareholders have entered into the Letter Agreement and agreed to vote in favor of the Business Combination, regardless of how PowerUp’s public shareholders vote.
Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, PowerUp’s Initial Shareholders, pursuant to the Letter Agreement, have agreed, among other things, to vote all of their shares in favor of all the proposals being presented at the extraordinary general meeting, including the Business Combination Proposal and the transactions contemplated thereby (including the Business Combination). As of the date of this proxy statement/prospectus, the Original Sponsor and Sponsor collectively own approximately 92.56% of PowerUp’s issued and outstanding ordinary shares. Accordingly, PowerUp would not need any of the public shares to be voted in favor of the Business Combination Proposal in order for it to be approved, assuming all outstanding shares are voted on such proposal. If only a minimum quorum, consisting of a simple majority of outstanding PowerUp ordinary shares, is present at the extraordinary general meeting, PowerUp would not need any of the Class A ordinary shares sold in PowerUp’s initial public offering to be voted in favor of the Business Combination Proposal in order for it to be approved. Accordingly, the agreement by PowerUp’s Initial Shareholders to vote in favor of each of the proposals at the extraordinary general meeting will increase the likelihood that PowerUp will receive the requisite shareholder approval for the Business Combination and the transactions contemplated thereby.
The fairness opinion obtained in connection with the Business Combination will not reflect changes in circumstances between the date of such opinion and the closing of the Business Combination.
In connection with the Business Combination, PowerUp’s Board received a written opinion from KPSN, dated August 23, 2024, which was replaced with an updated opinion dated September 4, 2024 in connection with the Amendment Agreement, as to the fairness, from a financial point of view, to PowerUp of the shares of New Aspire Common Stock to be issued on the Closing Date as the consideration in the Business Combination to the Aspire Stockholders, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by KPSN in preparing its opinion. The fairness opinion was based on assumptions, qualifications, limitations and other variables known at the time of its preparation. Such variables and assumptions are inherently uncertain and many are beyond the control of Aspire or PowerUp. PowerUp will not obtain an additional updated fairness opinion prior to consummation of the Business Combination. Changes in the proposed operations and prospects of Aspire, general market and economic conditions and other factors that may be beyond the control of PowerUp or Aspire, and on which the fairness opinion was based, may alter the value of PowerUp or Aspire or the price of PowerUp’s securities by the time the Business Combination is completed. The fairness opinion does not speak to any date other than the date of such opinion, and as such, the opinion will not address the fairness of the Merger Consideration, from a financial point of view, at any date after the date of such opinion, including at the time the Business Combination is completed. For a description of the opinion, see “Business Combination Proposal — Opinion of Financial Advisor to PowerUp.” A copy of the fairness opinion is attached hereto as Annex H.
Since the Initial Shareholders, PowerUp’s directors and executive officers, and Aspire’s directors and executive officers have interests that are different, or in addition to (and which may conflict with), the interests of PowerUp’s shareholders, a conflict of interest may have existed in determining whether the Business Combination with Aspire is appropriate as PowerUp’s initial business combination. Such interests include that PowerUp’s Initial Shareholders, directors and executive officers, will lose their entire investment in PowerUp if the initial business combination is not completed.
When you consider the recommendation of the PowerUp Board in favor of approval of the Business Combination Proposal and the other proposals described in this proxy statement/prospectus, you should keep in mind that PowerUp’s Initial Shareholders, PowerUp’s directors and executive officers, and Aspire’s directors and executive officers have interests in such proposal that are different from, or in addition to (which may conflict with), those of PowerUp shareholders generally.
These interests include, among other things, the interests listed below:
| | ● | in connection with PowerUp’s initial public offering, and pursuant to the terms of the Letter Agreement, our Initial Shareholders have agreed not to redeem any ordinary shares held by them in connection with a shareholder vote to approve an initial business combination; |
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| | ● | the Sponsor and PowerUp’s officers and directors will lose their entire investment in PowerUp and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by February 17, 2025 (unless such date is extended by the PowerUp Board in accordance with the Existing Governing Documents); |
| | ● | the Sponsor will pay an aggregate of $1.00 for its 4,317,500 Class A ordinary shares and its 6,834,333 private placement warrants to the Original Sponsor upon the Closing of the Business Combination. The Sponsor will pay less than $0.0001 per Class A ordinary share and has the right to acquire 6,834,333 shares of New Aspire Common Stock at a price of $11.50 per share. Thus, if the price of the stock falls significantly from the initial public offering price of $10.00 per share, our Sponsor will still receive a positive rate of return even in a scenario where our public shareholders would experience a negative rate of return in New Aspire from our initial public offering price of $10.00 per share; the Sponsor also has the ability to receive additional returns if our price rises above $11.50 per share; |
| | ● | the aggregate dollar amount that the Sponsor and its affiliates have at risk depending on the completion of an initial business combination, including the Business Combination, is approximately $50,991,337 as of January 7, 2025, which amount includes the current value of securities held and cash amounts to be paid to the Sponsor at Closing, assuming a trading price of $11.43 per PowerUp Class A ordinary share and $0.04 per PowerUp public warrants (based upon the respective closing prices of the PowerUp Class A ordinary shares and the PowerUp public warrants on Nasdaq on January 7, 2025); the aggregate amount the Sponsor has at risk consists of the value of the securities and other compensation described in the section titled “Summary of the Proxy Statement/Prospectus – Compensation Received by the Sponsor, the Original Sponsor, and Their Affiliates”; |
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| | ● | the aggregate dollar amount that the Original Sponsor and its affiliates have at risk depending on the completion of an initial business combination, including the Business Combination, is approximately $32,921,261 as of January 7, 2025, which amount includes the current value of securities held and cash amounts to be paid to the Original Sponsor at Closing, assuming a trading price of $11.43 per PowerUp Class A ordinary share and $0.04 per PowerUp public warrants (based upon the respective closing prices of the PowerUp Class A ordinary shares and the PowerUp public warrants on Nasdaq on January 7, 2025); the aggregate amount the Original Sponsor has at risk consists of the value of the securities and other compensation described in the section titled “Summary of the Proxy Statement/Prospectus – Compensation Received by the Sponsor, the Original Sponsor, and Their Affiliates”; |
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| | ● | the Sponsor acquired approximately 55.6% of the issued and outstanding ordinary shares of PowerUp for less than $0.0001 per share. However, the merger consideration is based on a deemed price per share of $10.00 per share. Therefore, the Sponsor could make a substantial profit after the Business Combination even if the New Aspire Common Stock subsequently declines in value or is unprofitable for the public shareholders, or the public shareholders experience substantial losses in their investment in New Aspire. The ordinary shares held by the Sponsor have an aggregate market value of approximately $49,349,025, based on the closing price of PowerUp’s Class A ordinary shares on January 7, 2025 of $11.43 per share, resulting in a theoretical gain of $49,349,024 (or approximately $11.43 per share); |
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| | ● | the Original Sponsor owns approximately 37.0% of the issued and outstanding ordinary shares of PowerUp, which it originally acquired for approximately $0.0029 per share. However, the merger consideration is based on a deemed price per share of $10.00 per share. Therefore, the Original Sponsor could make a substantial profit after the Business Combination even if the New Aspire Common Stock subsequently declines in value or is unprofitable for the public shareholders, or the public shareholders experience substantial losses in their investment in New Aspire. The ordinary shares held by the Original Sponsor have an aggregate market value of approximately $32,804,100, based on the closing price of PowerUp’s Class A ordinary shares on January 7, 2025 of $11.43 per share, resulting in a theoretical gain of $32,795,777 (or $11.4271 per share); |
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| | ● | the private placement warrants owned by the Initial Shareholders will be worthless if an initial business combination is not consummated; |
| | ● | the Initial Shareholders have agreed that the private placement warrants and the underlying securities will not be sold or transferred by it until after PowerUp has completed an initial business combination, subject to limited exceptions; |
| | ● | the Sponsor’s total potential ownership in New Aspire, assuming the exercise and conversion of all of securities following the consummation of the Business Combination, is estimated to comprise approximately 18.7% of outstanding New Aspire Common Stock in a no redemption scenario, and 18.9% of outstanding New Aspire Common Stock in a maximum redemption scenario (see “Unaudited Pro Forma Condensed Combined Financial Information” for more information); |
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| | ● | the Original Sponsor’s total potential ownership in New Aspire, assuming the exercise and conversion of all of securities following the consummation of the Business Combination, is estimated to comprise approximately 8.2% of outstanding New Aspire Common Stock in a no redemption scenario, and 8.3% of outstanding New Aspire Common Stock in a maximum redemption scenario (see “Unaudited Pro Forma Condensed Combined Financial Information” for more information); |
| | ● | the Sponsor is currently the owner of 4,317,500 Class A ordinary shares and 6,834,333 private placement warrants, each consisting of one Class A ordinary share and one-half of one redeemable warrant that is exercisable for one Class A ordinary share, which it purchased for $1.00 due to the Original Sponsor at the Closing of the Business Combination. If an initial business combination, such as the Business Combination, is not completed by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), PowerUp will be required to dissolve and liquidate. In such event, the PowerUp Class A ordinary shares currently held by the Sponsor, which were acquired from the Original Sponsor, will be worthless because the Sponsor has agreed to waive its rights to any liquidation distribution; |
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| | ● | the Original Sponsor is currently the owner of 2,870,000 Class A ordinary shares and 2,929,000 private placement warrants. If an initial business combination, such as the Business Combination, is not completed by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), PowerUp will be required to dissolve and liquidate. In such event, the PowerUp Class A ordinary shares currently held by the Original Sponsor will be worthless because the Original Sponsor has agreed to waive its rights to any liquidation distribution; |
| | ● | the anticipated continuation of two of our existing directors, Surendra Ajjarapu and Donald G. Fell, as directors of New Aspire. In the future each of such directors will receive any cash fees, stock options, stock awards or other remuneration that the New Aspire Board determines to pay them for their service as directors; |
| | ● | pursuant to the Business Combination Agreement, for a period of six years following the consummation of the Business Combination, we are required to (i) maintain provisions in our organizational documents providing for continued indemnification of PowerUp’s directors and officers and (ii) continue PowerUp’s directors’ and officers’ liability insurance after the Business Combination (i.e., a “tail policy”); |
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| | ● | at the Effective Time, PowerUp will issue the Sponsor up to 2,000,000 Working Capital Loan Shares as partial consideration for the Sponsor entering into certain Working Capital Loans, such exact number to be calculated based on the actual dollar amount of principal loaned subsequent to the date of the Business Combination Agreement. As of the date of this proxy statement/prospectus, 567,905 of these Working Capital Loan Shares are issuable at Closing; |
| | ● | if the Business Combination is not consummated, the Sponsor will not receive the up to 2,000,000 Working Capital Loan Shares described above, which have a total aggregate value of up to $20,000,000, with the exact amount to be determined based on the total amount shares ultimately issued to the Sponsor; |
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| | ● | if the Business Combination is not consummated, the Sponsor will not receive the $1,000,000 fee payable under the Promissory Note Fee Agreement; |
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| | ● | PowerUp is not responsible for the payment of any interest on the Working Capital Loans and is only required to repay the principal amounts of the Working Capital Loans upon the completion of an initial business combination; |
| | ● | pursuant to the Registration Rights Agreement, the Original Sponsor and its permitted transferees are entitled to registration of the shares of New Aspire Common Stock into which the founder shares will automatically convert at the time of the consummation of the Business Combination; |
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| | ● | the fact that we have provisions in our Existing Governing Documents that waive the corporate opportunities doctrine on an ongoing basis, which means that PowerUp’s officers and directors have not been obligated and continue to not be obligated to bring all corporate opportunities to PowerUp. The potential conflict of interest relating to the waiver of the corporate opportunities doctrine in our Existing Governing Documents did not, to our knowledge, impact our search for an acquisition target or prevent us from reviewing any opportunities as a result of such waiver; |
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| | ● | if the Trust Account is liquidated, including in the event PowerUp is unable to complete an initial business combination by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), the Sponsor has agreed to indemnify PowerUp to ensure that the proceeds in the Trust Account are not reduced below $10.25 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which PowerUp has entered into an acquisition agreement or claims of any third party for services rendered or products sold to PowerUp, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; |
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| | ● | the Sponsor has agreed to pay for any liquidation expenses if an initial business combination is not consummated; |
| | ● | the following individuals who are currently executive officers of Aspire are expected to become executive officers of New Aspire upon the Closing, serving in the offices set forth opposite their names below: |
| Name | | Position |
| Kraig Higginson | | Chief Executive Officer |
| Ernest Scheidemann | | Chief Financial Officer |
| Stephen Quesenberry | | General Counsel |
| | ● | Kraig Higginson and Edward Kimball, who are currently members of Aspire’s board of directors, are expected to become members of the New Aspire Board upon the Closing; |
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| | ● | members of Aspire’s management own certain convertible securities in Aspire that may benefit from the Business Combination. Mr. Higginson will own 9,489,137 shares, Mr. Scheidemann will own 588,981 shares and Mr. Quesenberry will own 2,028,712 shares. See “Certain Relationships and Related Person Transactions” for a further discussion of these agreements; and |
| | ● | effective upon Closing, New Aspire intends to enter into employment agreements with each of its NEOs. |
As a result of the foregoing interests, the Sponsor and PowerUp’s directors and officers will benefit from the completion of an initial business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public shareholders rather than liquidate.
See “Business Combination Proposal — Interests of PowerUp’s Directors and Executive Officers, the Initial Shareholders, and Aspire’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.
In addition, PowerUp has not adopted a policy that expressly prohibits its directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by PowerUp or in any transaction to which PowerUp is a party or has an interest. PowerUp does not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by PowerUp. Accordingly, such persons or entities may have a conflict between their interests and PowerUp’s.
The personal and financial interests of PowerUp’s Initial Shareholders as well as PowerUp’s directors and executive officers may have influenced their motivation in identifying and selecting Aspire as a business combination target, completing an initial business combination with Aspire and influencing the operation of the business following the consummation of the Business Combination. In considering the recommendations of the PowerUp Board to vote for the proposals, its shareholders should consider these interests.
If the conditions to closing contained in the Business Combination Agreement are not met or waived, the Business Combination may not occur.
Even if the Business Combination Agreement is approved by the shareholders of PowerUp, certain closing conditions must be met for the parties to be obligated to effect the closing of the Business Combination, including, but not limited to: (i) the approval by our shareholders of the Condition Precedent Proposals being obtained (not waivable); (ii) approval of certain other agreements and transactions related to the Business Combination by the respective shareholders of PowerUp and Aspire; (iii) the applicable waiting period under the HSR Act relating to the Business Combination Agreement having expired or been terminated (not waivable); (iv) the approval by Nasdaq of our initial listing application in connection with the Business Combination (not waivable); (v) that Aspire meet the Minimum Cash Condition; (vi) the deliverance by Aspire of documentation reasonably acceptable to PowerUp evidencing that the Aspire Warrants have been terminated and that there are no other exercisable Aspire Warrants; and (vii) the members of the Post-Closing PowerUp Board having been elected or appointed consistent with the Business Combination Agreement. For a list of the material closing conditions contained in the Business Combination Agreement, see “Business Combination Proposal — Conditions to Closing of the Business Combination.” Certain of these closing conditions are beyond the control of the parties, and, in certain cases may require PowerUp or Aspire to identify and then execute on an outside source of capital . To date neither PowerUp nor Aspire has not entered into any preliminary or binding understanding or agreement on any such source of liquidity. PowerUp and Aspire may not satisfy all of the closing conditions in the Business Combination Agreement. If the closing conditions are not satisfied or waived by the applicable parties, the Business Combination will not occur, or will be delayed pending later satisfaction or waiver, and such delay may cause PowerUp and Aspire to each lose some or all of the intended benefits of the Business Combination.
Further, satisfying the conditions to, and the completion of, the Business Combination may take longer and could cost more than PowerUp expects. Any delay or additional costs incurred in connection with completing the Business Combination could materially affect the benefits that PowerUp expects to achieve from the Business Combination.
PowerUp may change or waive one or more of the terms of, or conditions to, the Business Combination, and the exercise of PowerUp’s directors’ and executive officers’ discretion in agreeing to such changes may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in PowerUp’s shareholders’ best interest.
In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Business Combination Agreement, would require PowerUp to agree to amend the Business Combination Agreement, to consent to certain actions taken by Aspire or to waive one or more of the conditions to the Business Combination and/or rights that PowerUp is entitled to under the Business Combination Agreement. Such events could arise because of changes in the course of Aspire’s business, a request by Aspire to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on Aspire’s business and would entitle PowerUp to terminate the Business Combination Agreement. In any of such circumstances, it would be at PowerUp’s discretion, acting through the PowerUp Board, to grant its consent or waive those conditions or rights. The existence of financial and personal interests of one or more of the directors or executive officers described in the preceding risk factors may result in a conflict of interest on the part of such director(s) or executive officer(s) between what such director(s) or executive officer(s) may believe is best for PowerUp and its shareholders and what such director(s) or executive officer(s) may believe is best for themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, PowerUp does not believe there will be any changes or waivers that PowerUp’s directors and executive officers would be likely to make after shareholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further shareholder approval, PowerUp will circulate a new or amended proxy statement/prospectus and resolicit PowerUp’s shareholders if changes to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the Business Combination Proposal.
The parties to the Business Combination Agreement may waive one or more of the conditions to the Business Combination by written consent.
The parties to the Business Combination Agreement may agree to waive, in whole or in part, the conditions to each obligation to complete the Business Combination, to the extent permitted by each of the parties’ organizational documents and applicable laws. For example, the Minimum Cash Condition may be waived upon agreement by PowerUp and Aspire. However, while both PowerUp and Aspire could agree to waive the condition that shareholders of each approve the Business Combination, under applicable law and each parties’ organizational documents, the parties are not able to waive such condition.
PowerUp will not have any right to make damage claims against Aspire for the breach of any representation, warranty or covenant made by Aspire in the Business Combination Agreement.
The Business Combination Agreement provides that all of the representations, warranties and covenants of the parties contained therein shall not survive the closing of the Business Combination, except for certain fraud claims and those covenants contained therein that by their terms apply or are to be performed in whole or in part after the Closing. Accordingly, there are no remedies available to PowerUp with respect to any breach of the representations, warranties, covenants or agreements of Aspire after the Closing, and, as a result, PowerUp will have no remedy available to it if the Business Combination is consummated and it is later revealed that there was a breach of any of the representations, warranties and covenants made by Aspire at the time of the Business Combination (except, in limited instances, for certain fraud claims and those covenants contained therein that by their terms apply or are to be performed in whole or in part after the Closing).
The Business Combination may be completed even though material adverse effects may result from the announcement of the Business Combination, industry-wide changes and other causes.
In general, either PowerUp or Aspire can refuse to complete the Business Combination if there is a material adverse effect affecting the other party between the signing date of the Business Combination Agreement and the planned closing. However, certain types of changes do not permit either party to refuse to complete the Business Combination, even if such change could be said to have a material adverse effect on PowerUp or Aspire, including the following events (except, in some cases, where the change has a disproportionate effect on a party):
| | ● | changes generally affecting the economy, financial or securities markets; |
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| | ● | conditions caused by acts of God, terrorism, war (whether or not declared) or natural disaster; |
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| | ● | changes or general conditions in the industry in which the party operates; or |
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| | ● | changes in GAAP. |
Furthermore, PowerUp or Aspire may waive the occurrence of a material adverse effect affecting the other party. If a material adverse effect occurs and the parties still complete the Business Combination, PowerUp’s share price may suffer.
The Sponsor is liable to ensure that proceeds of the Trust Account are not reduced by vendor claims in the event an initial business combination is not consummated. The Sponsor has also agreed to pay for any liquidation expenses if an initial business combination is not consummated. Such liability may have influenced the Sponsor’s decision to pursue the Business Combination.
If the Business Combination or another business combination is not consummated by PowerUp by February 17, 2025 (or by the end of any Extension Period if we further extend the period of time to consummate an initial business combination), the Sponsor will be liable under certain circumstances to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by PowerUp for services rendered or contracted for or products sold to PowerUp. If PowerUp consummates an initial business combination, including the Business Combination, on the other hand, PowerUp will be liable for all such claims. Neither PowerUp nor the Sponsor has any reason to believe that the Sponsor will not be able to fulfill its indemnity obligations to PowerUp.
These obligations of the Sponsor may have influenced the Sponsor’s decision to pursue the Business Combination. Certain of PowerUp’s Initial Shareholders have an indirect economic interest in the founder shares and the private placement warrants purchased by the Sponsor as a result of such shareholder’s membership interest in the Sponsor. In considering the recommendations of the PowerUp Board to vote for the Business Combination Proposal and the other proposals described in this proxy statement/prospectus, PowerUp’s shareholders should consider these interests.
Upon the completion of the Business Combination, New Aspire might have limited funds available in the Trust Account after payment of outstanding loans, relevant fees and expenses in connection with the Business Combination, which will impact New Aspire’s ability to advance development of its products.
Except with respect to interest earned on the funds held in the Trust Account that may be released to PowerUp to pay its tax obligations, the funds deposited in the Trust Account will not be released from the Trust Account until the earliest of (a) the completion of PowerUp’s initial business combination, (b) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Existing Governing Documents (i) to modify the substance or timing of PowerUp’s obligation to allow redemption in connection with its initial business combination or to redeem 100% of the public shares if PowerUp does not complete its initial business combination by February 17, 2025 or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity and (c) the redemption of the public shares if PowerUp is unable to complete the Business Combination by February 17, 2025, subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of PowerUp’s creditors, if any, which could have priority over the claims of the public shareholders.
In connection with the 2023 Extension Meeting, a total of 242 PowerUp shareholders elected to redeem an aggregate of 26,946,271 public shares representing approximately 93.7% of the then outstanding Class A ordinary shares. As a result, approximately $284 million (approximately $10.55 per public share) was removed from the Trust Account to pay such holders and PowerUp had approximately $20 million left in its Trust Account.
In connection with the 2024 Extension Meeting, a total of 84 PowerUp shareholders elected to redeem an aggregate of 1,226,085 public shares representing approximately 68.0% of the then outstanding public shares. As a result, approximately $13.8 million (approximately $11.24 per public share) was removed from the Trust Account to pay such holders and PowerUp had approximately $6.5 million left in its Trust Account.
In order to finance transaction costs in connection with an intended initial business combination, the Sponsor, affiliates of the Sponsor, or certain of PowerUp’s officers and directors may, but are not obligated to, loan PowerUp funds as may be required. In the event that the Business Combination does not close, PowerUp may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts. If PowerUp completes the Business Combination, it is intended that all the principal balance of the Working Capital Loans will be paid by Aspire in connection with the Closing. As a result, no amounts would be paid from the Trust Account in connection with the Working Capital Loans if the Business Combination is completed.
In connection with the consummation of the Business Combination, PowerUp and Aspire estimate to incur approximately $900,000 and $650,000 of fees and expenses, respectively. At the Closing, it is anticipated that PowerUp’s unpaid expenses and liabilities will be paid by Aspire. As a result, no amounts would be paid from the Trust Account in connection with PowerUp’s unpaid expenses and liabilities if the Business Combination is completed.
As of September 30, 2024, PowerUp had no cash held outside the Trust Account. In addition, as of September 30, 2024, PowerUp had total current liabilities of approximately $6,573,000. If PowerUp completes the Business Combination, the funds available to PowerUp outside the Trust Account may not be sufficient to pay the amounts described above, and PowerUp may pay such amounts from the Trust Account. As of September 30, 2024, PowerUp’s Trust Account had a balance of approximately $6.6 million.
The parties anticipate needing to raise outside capital through debt or equity financing at, or in connection with, Closing to allow Aspire to meet the Minimum Cash Condition, to allow the combined company to meet Nasdaq initial listing requirements as well as demonstrate to Nasdaq its ability to continue to meet the exchange’s on-going listing requirements, and to allow the combined company to satisfy certain obligations and have sufficient working capital. If the parties are unsuccessful at closing a financing concurrent with the Closing of the Business Combination, the Closing likely would not occur even if PowerUp waives the $0.00 Minimum Cash Condition, unless PowerUp and/or Aspire is able to defer, or convert into equity, some or all of their expenses and liabilities. However, as of the date of the proxy statement/prospectus, no parties have affirmatively agreed to waive or convert into equity, any obligations that are, by their terms, repayable in cash. This could result in the parties electing to proceed with the Closing, and the combined company would have to reach an accommodation with its creditors and other counterparties to defer repayment of those obligations and/or the combined company having insufficient cash to fully implement its business and commercialize its products. There is no assurance that any debtors or counterparties will agree to defer obligations owed by the combined company or otherwise agree to accommodations favorable to the combined company.
Moreover, any obligations of the combined company that are not satisfied at closing, or that are deferred at the closing, would result in the combined company carrying additional liabilities on its balance sheet and, in turn, could have an adverse effect on the combined company’s ability to raise additional equity or debt financing after the closing, or result in the combined company raising capital on terms less favorable, and also would result in the combined company needing to reserve or utilize funds for deferred expenses and obligations in lieu of utilizing those funds to further its business operations. Impediments to the combined company’s access to outside capital, and matters that could cause the combined company to scale back or delay the implementation of its business plan would likely delay the on-going development of the combined company’s products and timeline by which hopes to begin generating revenue which would have an adverse effect on the combined company’s results of operations. For more information, see “Summary of the Proxy Statement/Prospectus – Sources and Uses of Funds for the Business Combination.”
PowerUp and Aspire have incurred and expect to incur significant transaction costs in connection with the Business Combination.
PowerUp and Aspire have both incurred and expect to incur significant, nonrecurring costs in connection with the Business Combination. PowerUp and Aspire will also incur significant legal, financial advisor, accounting, banking and consulting fees, fees relating to regulatory filings and notices, SEC filing fees, printing and mailing fees and other costs associated with the Business Combination. Some of these costs are payable regardless of whether the Business Combination is completed.
Past performance by PowerUp and by its management team may not be indicative of future performance of an investment in PowerUp or New Aspire.
Past performance by PowerUp and by its management team is not a guarantee of success with respect to the Business Combination. You should not rely on the historical record of PowerUp or its management team’s performance as indicative of the future performance of an investment in PowerUp or New Aspire or the returns PowerUp or New Aspire will, or is likely to, generate going forward.
PowerUp’s Existing Governing Documents waive the doctrine of corporate opportunity.
PowerUp’s Existing Governing Documents provide that PowerUp renounces its interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in such person’s capacity as a director or officer of PowerUp and such opportunity is one PowerUp is legally and contractually permitted to undertake and would otherwise be reasonable for PowerUp to pursue, and to the extent the director or officer is permitted to refer that opportunity to PowerUp without violating another legal obligation. PowerUp believes there were no such corporate opportunities that were not presented as a result of these provisions in its Existing Governing Documents, but PowerUp cannot assure you that this provision did not impact its search for a business combination target.
Activities taken by existing PowerUp shareholders to increase the likelihood of approval of the Business Combination Proposal and the other proposals described in this proxy statement/prospectus could have a depressive effect on PowerUp’s securities.
At any time prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding PowerUp, the Sponsor, Aspire and/or Aspire’s or PowerUp’s respective directors, officers, advisors or affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire Class A ordinary shares of PowerUp or vote their shares in favor of the Business Combination Proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements to consummate the Business Combination where it appears that such requirements would otherwise not be met. Entering into any such arrangements may have a depressive effect on PowerUp’s securities. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than the market price and may therefore be more likely to sell the shares they own, either prior to or immediately after the extraordinary general meeting.
Because Aspire is not conducting an underwritten public offering of its securities, no underwriter has conducted due diligence of Aspire’s business, operations or financial condition or reviewed the disclosure in this proxy statement/prospectus.
Section 11 of the Securities Act (“Section 11”) imposes liability on parties, including underwriters, involved in a securities offering if the registration statement contains a materially false statement or material omission. To effectively establish a due diligence defense against a cause of action brought pursuant to Section 11, a defendant, including an underwriter, carries the burden of proof to demonstrate that he or she, after reasonable investigation, believed that the statements in the registration statement were true and free of material omissions. In order to meet this burden of proof, underwriters in a registered offering typically conduct extensive due diligence of the issuer and vet the issuer’s disclosure. Such due diligence may include calls with the issuer’s management, review of material agreements, and background checks on key personnel, among other investigations.
Because Aspire intends to become publicly traded through a business combination with PowerUp rather than through an underwritten public offering of its common stock, no underwriter is involved in the transaction. As a result, no underwriter has conducted diligence on Aspire or PowerUp in order to establish a due diligence defense with respect to the disclosure presented in this proxy statement/prospectus. If such investigation had occurred, certain information in this proxy statement/prospectus may have been presented in a different manner or additional information may have been presented at the request of such underwriter. Investors in PowerUp and New Aspire must rely on the information in this proxy statement/prospectus and will not have the benefit of an independent review and investigation of the type normally performed by an independent underwriter in a public securities offering. While sponsors, private investors and management in a business combination undertake a certain level of due diligence, it is not necessarily the same level of due diligence undertaken by an underwriter in a public securities offering and, therefore, there could be a heightened risk of an incorrect valuation of Aspire’s business or material misstatements or omissions in this proxy statement/prospectus.
In addition, because there are no underwriters engaged in connection with the Business Combination, prior to the opening of trading on the trading day immediately following the Closing, there will be no traditional “roadshow” or book building process, and no price at which underwriters initially sold shares to the public to help inform efficient and sufficient price discovery with respect to the initial post-closing trades. Therefore, buy and sell orders submitted prior to and at the opening of initial post-closing trading of New Aspire’s securities will not have the benefit of being informed by a published price range or a price at which the underwriters initially sold shares to the public, as would be the case in an underwritten initial public offering. There will be no underwriters assuming risk in connection with an initial resale of New Aspire’s securities or helping to stabilize, maintain or affect the public price of New Aspire’s securities following the Closing. Moreover, New Aspire will not engage in, and has not and will not, directly or indirectly, request financial advisors to engage in, any special selling efforts or stabilization or price support activities in connection with the New Aspire securities that will be outstanding immediately following the Closing. In addition, since New Aspire will become public through a Business Combination, securities analysts of major brokerage firms may not provide coverage of Aspire since there is no incentive to brokerage firms to recommend the purchase of its shares of common stock. No assurance can be given that brokerage firms will, in the future, want to conduct any offerings on New Aspire’s behalf. All of these differences from an underwritten public offering of New Aspire’s securities could result in a more volatile price for New Aspire’s securities.
In addition, the Sponsor, certain members of the PowerUp Board and its officers, as well as their respective affiliates and permitted transferees, have interests in the Business Combination that are different from or are in addition to those of holders of New Aspire’s securities following completion of the Business Combination, and that would not be present in an underwritten public offering of New Aspire’s securities. Such interests may have influenced the PowerUp Board in making its recommendation that PowerUp shareholders vote in favor of the approval of the Business Combination Proposal and the other proposals described in this proxy statement/prospectus. See also “— Since the Initial Shareholders, PowerUp’s directors and executive officers, and Aspire’s directors and executive officers have interests that are different, or in addition to (and which may conflict with), the interests of PowerUp’s shareholders, a conflict of interest may have existed in determining whether the Business Combination with Aspire is appropriate as PowerUp’s initial business combination. Such interests include that PowerUp’s Initial Shareholders, directors and executive officers, will lose their entire investment in PowerUp if the initial business combination is not completed.”
Such differences from an underwritten public offering may present material risks to unaffiliated investors that would not exist if New Aspire became a publicly listed company through an underwritten initial public offering instead of upon completion of the Business Combination.
The SEC has recently issued rules relating to certain activities of SPACs. Certain of the procedures that PowerUp, a potential business combination target, or others may determine to undertake in connection with such rules may increase PowerUp’s costs and the time needed to complete its initial business combination and may constrain the circumstances under which PowerUp could complete an initial business combination. The need for compliance with the SPAC Final Rules may cause us to liquidate the funds in the Trust Account or liquidate the Company at an earlier time than we might otherwise choose.
On March 30, 2022, the SEC issued proposed rules relating, among other items, to disclosures in business combination transactions between SPACs such as PowerUp and private operating companies; the condensed financial statement requirements applicable to transactions involving shell companies; the use of projections by SPACs in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act. On January 24, 2024, the SEC adopted the final rules (the “SPAC Final Rules”), which became effective on July 1, 2024. Certain of the procedures that PowerUp, a potential business combination target, or others may determine to undertake in connection with the SPAC Final Rules, or pursuant to the SEC’s views, may increase the costs and time of negotiating and completing an initial business combination, and may constrain the circumstances under which PowerUp could complete an initial business combination. The need for compliance with the SPAC Final Rules may cause PowerUp to liquidate the funds in the Trust Account or liquidate the Company at an earlier time than PowerUp might otherwise choose.
If we are deemed to be an investment company for purposes of the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities would be severely restricted. As a result, in such circumstances, unless we are able to modify our activities so that we would not be deemed an investment company, we would expect to abandon our efforts to complete an initial business combination and instead to liquidate the Company.
If we are deemed to be an investment company under the Investment Company Act, our activities would be severely restricted, including:
| | ● | restrictions on the nature of our investments; and |
| | ● | restrictions on the issuance of securities. |
In addition, we would be subject to burdensome compliance requirements, including:
| | ● | registration as an investment company with the SEC; |
| | ● | adoption of a specific form of corporate structure; and |
| | ● | reporting, record keeping, proxy and disclosure requirements and other rules and regulations that we are currently not subject to. |
We do not believe that our principal activities will subject us to regulation as an investment company under the Investment Company Act. However, if we are deemed to be an investment company and subject to compliance with and regulation under the Investment Company Act, we would be subject to additional regulatory burdens and expenses for which we have not allotted funds. As a result, unless we are able to modify our activities so that we would not be deemed an investment company, we would expect to abandon our efforts to complete an initial business combination and instead to liquidate the Company.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect PowerUp’s business, including its ability to negotiate and complete its initial business combination, and results of operations.
PowerUp is subject to laws and regulations enacted by national, regional and local governments. In particular, PowerUp will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on PowerUp’s business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on PowerUp’s business, including its ability to negotiate and complete its initial business combination, and results of operations.
On January 24, 2024, the SEC adopted the SPAC Final Rules, which may materially adversely affect our business, financial condition and results of operations. See “— The SEC has recently issued rules relating to certain activities of SPACs. Certain of the procedures that PowerUp, a potential business combination target, or others may determine to undertake in connection with such rules may increase PowerUp’s costs and the time needed to complete its initial business combination and may constrain the circumstances under which PowerUp could complete an initial business combination. The need for compliance with the SPAC Final Rules may cause us to liquidate the funds in the Trust Account or liquidate the Company at an earlier time than we might otherwise choose.”
To mitigate the risk that PowerUp might be deemed to be an investment company for purposes of the Investment Company Act, in January 2024, PowerUp instructed the trustee to liquidate the securities held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing demand deposit account at a bank until the earlier of the consummation of PowerUp’s initial business combination or its liquidation. As a result, following the liquidation of securities in the Trust Account, PowerUp will receive minimal interest on the funds held in the Trust Account, which would reduce the dollar amount the public shareholders would receive upon any redemption or liquidation of PowerUp.
Until January 2024, the funds in the Trust Account had been, since PowerUp’s initial public offering, held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. However, to mitigate the risk of PowerUp being deemed to be an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, in January 2024, PowerUp instructed Equiniti, the trustee with respect to the Trust Account, to instead to hold the funds in the Trust Account in an interest-bearing demand deposit account at a bank until the earlier of the consummation of PowerUp’s initial business combination or liquidation of PowerUp. Following such liquidation, PowerUp will receive minimal interest on the funds held in the Trust Account. However, interest previously earned on the funds held in the Trust Account still may be released to PowerUp to pay its taxes, if any, and certain other expenses as permitted. Consequently, the transfer of the funds in the Trust Account into cash in January 2024 and into in an interest-bearing demand deposit account at a bank in January 2024 could reduce the dollar amount the public shareholders would receive upon any redemption or liquidation of PowerUp.
Notwithstanding the divestment of all investments in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations effective as of January 2024, PowerUp may still be deemed to be an investment company under the Investment Company Act, which could require PowerUp to liquidate the Trust Account by returning the then remaining funds in such account to the public shareholders and then proceed to liquidate and dissolve. If PowerUp is required to liquidate and dissolve, it will be unable to complete the Business Combination, it may lose the opportunity for any stock price appreciation, and its outstanding warrants would expire worthless.
Subsequent to the consummation of the Business Combination, New Aspire may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and the share price of its securities, which could cause you to lose some or all of your investment.
PowerUp cannot assure you that the due diligence conducted in relation to Aspire has identified all material issues or risks associated with Aspire, its business or the industry in which it competes. As a result of these factors, PowerUp may incur additional costs and expenses and New Aspire may be forced to later write-down or write-off assets, restructure its operations, or incur impairment or other charges that could result in its reporting losses. Even if PowerUp’s due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with its preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on New Aspire’s financial condition and results of operations and could contribute to negative market perceptions about its securities of New Aspire. Accordingly, any shareholders of PowerUp who choose to remain New Aspire stockholders following the Business Combination could suffer a reduction in the value of their shares and warrants. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by PowerUp’s officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the registration statement or proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.
PowerUp may be targeted by securities actions and derivative suits that could result in substantial costs and may delay or prevent the consummation of the Business Combination.
Securities actions and derivative suits are often brought against public companies that have entered into Business Combination Agreements. Even if the lawsuits are without merit, defending against them could result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on PowerUp’s liquidity and financial condition, or could result in equitable relief, such as an injunction prohibiting completion of the Business Combination. Any such judgment may delay or prevent the Business Combination from being completed, or from being completed within the expected timeframe, which may adversely affect PowerUp’s and Aspire’s respective business, financial condition, and results of operations.
PowerUp’s shareholders who do not redeem their public shares will have a reduced ownership and voting interest after the Business Combination and will exercise less influence over management.
Upon the issuance of New Aspire Common Stock in connection with the Business Combination, the percentage ownership of public shareholders who do not redeem their public shares will be diluted. The percentage of New Aspire Common Stock that will be owned by public shareholders as a group will vary based on the number of public shares for which the holders thereof request redemption in connection with the Business Combination. To illustrate the potential ownership percentages of public shareholders under different redemption levels, based on the number of issued and outstanding shares of PowerUp ordinary shares and Aspire Common Stock on September 30, 2024, and based on the New Aspire Common Stock expected to be issued in the Business Combination, non-redeeming public shareholders, as a group, will own:
| | ● | if there are no redemptions of public shares, 1.2% of New Aspire Common Stock expected to be outstanding immediately after the Business Combination; |
| | ● | if there are redemptions of 50% of the outstanding public shares, 0.6% of New Aspire Common Stock expected to be outstanding immediately after the Business Combination; or |
| | ● | if there are maximum redemptions of 100% of the outstanding public shares, 0% of New Aspire Common Stock expected to be outstanding immediately after the Business Combination. |
Because of this, public shareholders, as a group, will have less influence on the board of directors, management and policies of New Aspire than they now have on the board of directors, management and policies of PowerUp.
The ownership percentages with respect to New Aspire following the Business Combination does take into account the issuance of up to 3,750,000 Working Capital Loan Shares. However, the above ownership percentages do not take into account the following potential issuances of securities, which will result in further dilution to public shareholders who do not redeem their public shares:
| | ● | the issuance of up to 14,375,000 shares upon exercise of the public warrants at a price of $11.50 per share; and |
| | ● | the issuance of up to 9,763,333 shares upon exercise of the private placement warrants held by the Initial Shareholders following the Business Combination at a price of $11.50 per share. |
If all such shares were issued immediately after the Business Combination, based on the number of issued and outstanding shares of PowerUp ordinary shares and Aspire Common Stock on September 30, 2024, and based on the New Aspire Common Stock expected to be issued in the Business Combination, non-redeeming public shareholders, assuming no redemptions of public shares, as a group, would own approximately 0.8% of New Aspire Common Stock outstanding assuming all such shares were issued immediately after the Business Combination.
PowerUp’s ability to successfully effect the Business Combination depends in part on recruiting and retaining key personnel, and the loss of any member or change in structure of Asipre’s senior management team could adversely affect its business.
PowerUp’s ability to successfully effect the Business Combination is dependent upon the efforts of its key personnel. Although not currently expected, some of PowerUp’s key personnel may potentially remain with New Aspire in senior management or advisory positions following the Business Combination. Following the Business Combination, PowerUp expects that Aspire’s current management will become the management of New Aspire.
New Aspire’s success depends in large part upon the skills, experience and performance of members of its executive management team and others in key leadership positions as it depends on key management to run its business. The efforts of these persons will be critical to New Aspire as it continues to develop and scale its business. Following the Closing, it is expected that the current executive management team of Aspire will continue as the executive management team of New Aspire. If New Aspire were to lose one or more key executives, New Aspire may experience difficulties in competing effectively and implementing its business strategy. The loss of one or more executive officers or other key personnel or New Aspire’s inability to locate suitable or qualified replacements could be significantly detrimental to product development efforts and could have a material adverse effect on New Aspire’s business, financial condition and results of operations.
The unaudited pro forma financial information included elsewhere in this proxy statement/prospectus may not be indicative of what New Aspire’s actual financial position or results of operations would have been.
PowerUp and Aspire currently operate as separate companies and have had no prior history as a combined entity, and PowerUp’s and Aspire’s operations have not previously been managed on a combined basis. The pro forma financial information included in this proxy statement/prospectus is presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that would have actually occurred had the Business Combination been completed at or as of the dates indicated, nor is it indicative of the future operating results or financial position of New Aspire. The pro forma statement of operations does not reflect future nonrecurring charges resulting from the Business Combination. The unaudited pro forma financial information does not reflect future events that may occur after the Business Combination and does not consider potential impacts of future market conditions on revenues or expenses. The pro forma financial information included in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” has been derived from PowerUp’s and Aspire’s historical financial statements and certain adjustments and assumptions have been made regarding Aspire after giving effect to the Business Combination. There may be differences between preliminary estimates in the pro forma financial information and the final acquisition accounting, which could result in material differences from the pro forma information presented in this proxy statement/prospectus in respect of the estimated financial position and results of operations of New Aspire.
In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate and other factors may affect New Aspire’s financial condition or results of operations following the Closing. Any potential decline in New Aspire’s financial condition or results of operations may cause significant variations in New Aspire’s stock price.
The ability of PowerUp’s public shareholders to exercise redemption rights with respect to a large number of its public shares may not allow it to complete the Business Combination or optimize the capital structure of New Aspire and may increase the probability that the Business Combination would be unsuccessful and that you will have to wait for liquidation in order to redeem your shares.
At the time of entering into the Business Combination Agreement, PowerUp did not know how many shareholders may exercise their redemption rights, and therefore, PowerUp needed to structure the transaction based on its expectations as to the number of shares that will be submitted for redemption. The consummation of the Business Combination is conditioned upon, among other things, (i) the approval by our shareholders of the Condition Precedent Proposals being obtained (not waivable); (ii) approval of certain other agreements and transactions related to the Business Combination by the respective shareholders of PowerUp and Aspire; (iii) the applicable waiting period under the HSR Act relating to the Business Combination Agreement having expired or been terminated (not waivable); and (iv) the approval by Nasdaq of our initial listing application in connection with the Business Combination (not waivable); (v) that Aspire meet the Minimum Cash Condition; (vi) the proxy statement/prospectus being declared effective by the SEC (not waivable); and (vii) the members of the Post-Closing PowerUp Board having been elected or appointed consistent with the Business Combination Agreement. Therefore, unless these conditions are met or waived by the applicable parties to the Business Combination Agreement, the Business Combination Agreement could terminate and the Business Combination may not be consummated.
On May 18, 2023, PowerUp held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal to amend PowerUp’s Existing Governing Documents to extend the date by which PowerUp must consummate an initial business combination. In connection with the 2023 2023 Extension Meeting and subsequent redemption, a total of 242 PowerUp shareholders elected to redeem an aggregate of 26,946,271 public shares representing approximately 93.7% of the then outstanding Class A ordinary shares. As a result, approximately $284 million (approximately $10.55 per public share) was removed from the Trust Account to pay such holders and PowerUp had approximately $20 million left in its Trust Account, all of which was held in U.S. government treasury securities. Following the 2023 Extension Redemption there were 1,803,729 public shares remaining issued and outstanding.
On May 22, 2024, PowerUp held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal to amend PowerUp’s Existing Governing Documents to extend the date by which PowerUp must consummate an initial business combination. In connection with the 2024 Extension Meeting, a total of 84 PowerUp shareholders elected to redeem an aggregate of 1,226,085 public shares representing approximately 68.0% of the then outstanding public shares. As a result, approximately $13.8 million (approximately $11.24 per public share) was removed from the Trust Account to pay such holders and PowerUp had approximately $6.5 million left in its Trust Account, all of which is held in an interest-bearing demand deposit account at a bank. Following the 2024 Extension Redemption there are 577,644 public shares remaining issued and outstanding.
If the Business Combination is unsuccessful, you would not receive your pro rata portion of the Trust Account until PowerUp liquidates the Trust Account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time its shares may trade at a discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with its redemption until PowerUp liquidates or you are able to sell your shares in the open market. For further details, see “Business Combination Proposal — Conditions to Closing of the Business Combination.”
PowerUp’s Initial Shareholders, as well as Aspire, PowerUp’s directors, executive officers, advisors and their respective affiliates may elect to purchase public shares prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of its Class A ordinary shares.
At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding PowerUp or its securities, the Sponsor, Aspire and/or Aspire’s or PowerUp’s respective directors, officers, advisors or affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record or beneficial holder of its shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that PowerUp’s Initial Shareholders, Aspire and/or their directors, officers, advisors or respective affiliates who have agreed to vote in favor of this transaction purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. It is intended that Rule 10b-18 would govern any such purchases by our Initial Shareholders, officers, directors or their affiliates, to the extent Rule 10b-18 applies. Rule 10b-18 provides a safe harbor from liability for market manipulation for purchases made under conditions set out in the Rule, including with respect to timing, pricing and volume of purchases.
Entering into any such arrangements may have a depressive effect on the per share price of the public shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares such investor owns, either at or prior to the Business Combination.
If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved.
In addition, if such purchases are made, the public “float” of PowerUp’s public shares and the number of beneficial holders of its securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of its securities on a national securities exchange.
If our Initial Shareholders, officers, directors or their affiliates elect to purchase public shares from public shareholders, such purchases may affect the market price of PowerUp’s securities
Any purchases of public shares by our Initial Shareholders, officers, directors or their affiliates in public or privately negotiated transactions as described above may increase the market price of our securities. Further, although none of our Initial Shareholders, officers, directors or their affiliates currently anticipate paying a premium to the market price for such shares, in the event they do pay a premium, such amount will not be more than $11.43 (the redemption price available to PowerUp shareholders based on funds in the Trust Account of approximately $6.6 million as of September 30, 2024) and such payment may not be in the best interest of those holders who have not sold their shares in such transaction or who have not received such premium. There is no other limit on the number of shares that our Initial Shareholders, officers, directors or their affiliates could acquire or the price such parties may pay. Any such securities purchased by our Initial Shareholders, officers, directors or their affiliates would not be voted in favor of approving the Business Combination and they will waive redemption rights with respect to such securities.
If the market does not view the Business Combination positively, purchases of public shares may have the effect of counteracting the market’s view, which otherwise would have been reflected in a decline in the market price of PowerUp’s securities. In addition, once such purchases end, the termination of the price support they provide may materially adversely affect the market price of PowerUp’s securities.
As of the date of this proxy statement/prospectus, no agreements with respect to the private purchase of public shares by us or the persons described above have been entered into with any public shareholder. If we become aware of any private arrangements entered into or significant private purchases made by any of the persons described above that would affect the vote on the Business Combination or other proposals, we will file a Current Report on Form 8-K to disclose (i) the amount of such securities purchased; (ii) the purpose of the purchases; (iii) the impact, if any, of the purchases on the likelihood that the Business Combination will be approved; (iv) the identities of security holders who sold the securities (if not purchased on the open market) or the nature of security holders who sold to our Initial Shareholders, officers, directors or their affiliates; and (v) the number of securities for which PowerUp has received redemption requests pursuant to the vote to approve the Business Combination.
If third parties bring claims against PowerUp, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by shareholders may be less than $10.25 per share (which was the offering price in its initial public offering).
PowerUp’s placing of funds in the Trust Account may not protect those funds from third-party claims against PowerUp. Although PowerUp has and will continue to seek to have all vendors, service providers (other than its independent registered public accounting firm), prospective target businesses or other entities with which PowerUp does business execute agreements with PowerUp waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against its assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, its management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to PowerUp than any alternative.
Examples of possible instances where PowerUp may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with PowerUp and will not seek recourse against the Trust Account for any reason. Upon redemption of PowerUp’s public shares, if PowerUp is unable to complete its initial business combination within the prescribed time frame, or upon the exercise of a redemption right in connection with its initial business combination, PowerUp will be required to provide for payment of claims of creditors that were not waived that may be brought against it within the ten years following redemption. Accordingly, the per share redemption amount received by public shareholders could be less than the $10.25 per share initially held in the Trust Account, due to claims of such creditors. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to PowerUp if and to the extent any claims by a vendor for services rendered or products sold to PowerUp, or a prospective target business with which PowerUp has discussed entering into a transaction agreement, reduces the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under its indemnity of the underwriters of its initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, even in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. PowerUp has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and PowerUp has not asked Sponsor to reserve for such indemnification obligations. Therefore, PowerUp cannot assure you that the Sponsor would be able to satisfy those obligations. None of PowerUp’s officers will indemnify PowerUp for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Additionally, if PowerUp is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against PowerUp which is not dismissed, or if PowerUp otherwise enters compulsory or court supervised liquidation, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its shareholders. To the extent any bankruptcy claims deplete the Trust Account, PowerUp may not be able to return to its public shareholders $10.25 per share (which was the offering price in its initial public offering).
PowerUp’s directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to the public stockholders.
In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.25 per share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.25 per public share due to reductions in the value of the trust assets, in each case less taxes payable, and PowerUp’s Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, its independent directors would determine whether to take legal action against its Sponsor to enforce its indemnification obligations. While PowerUp currently expects that its independent directors would take legal action on its behalf against its Sponsor to enforce its indemnification obligations to PowerUp, it is possible that its independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If PowerUp’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to its public shareholders may be reduced below $10.25 per share.
PowerUp may not have sufficient funds to satisfy indemnification claims of its directors and executive officers.
PowerUp has agreed to indemnify its officers and directors to the fullest extent permitted by law. However, its officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against the Trust Account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account due to their ownership of public shares).
Accordingly, any indemnification provided will be able to be satisfied by PowerUp only if (i) PowerUp has sufficient funds outside of the Trust Account or (ii) PowerUp consummates the Business Combination. PowerUp’s obligation to indemnify its officers and directors may discourage shareholders from bringing a lawsuit against its officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against its officers and directors, even though such an action, if successful, might otherwise benefit PowerUp and its shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent PowerUp pays the costs of settlement and damage awards against its officers and directors pursuant to these indemnification provisions.
In the event PowerUp distributes the proceeds in the Trust Account to its public shareholders and subsequently files a bankruptcy petition or an involuntary bankruptcy petition is filed against PowerUp that is not dismissed, a bankruptcy court may seek to recover such proceeds, and PowerUp and the PowerUp Board may be exposed to claims of punitive damages.
If, after PowerUp distributes the proceeds in the Trust Account to its public shareholders, PowerUp files a bankruptcy petition or an involuntary bankruptcy petition is filed against PowerUp that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by its shareholders. In addition, the PowerUp Board may be viewed as having breached its fiduciary duty to its creditors and/or having acted in bad faith, thereby exposing it and PowerUp to claims of punitive damages, by paying public shareholders from the Trust Account prior to addressing the claims of creditors. PowerUp cannot assure you that claims will not be brought against PowerUp for these reasons.
If, before distributing the proceeds in the Trust Account to PowerUp’s public shareholders, PowerUp files a bankruptcy petition or an involuntary bankruptcy petition is filed against PowerUp that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of its shareholders and the per share amount that would otherwise be received by its shareholders in connection with its liquidation may be reduced.
If, before distributing the proceeds in the Trust Account to PowerUp’s public shareholders, PowerUp files a bankruptcy petition or an involuntary bankruptcy petition is filed against PowerUp that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in PowerUp’s bankruptcy estate and subject to the claims of third parties with priority over the claims of its shareholders. To the extent any bankruptcy claims deplete the Trust Account, the per share amount that would otherwise be received by PowerUp’s shareholders in connection with its liquidation may be reduced.
PowerUp’s shareholders may be held liable for claims by third parties against PowerUp to the extent of distributions received by them upon redemption of their shares.
If PowerUp is forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, PowerUp was unable to pay its debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover all amounts received by its shareholders. Furthermore, PowerUp’s directors may be viewed as having breached their fiduciary duties to PowerUp or its creditors and/or may have acted in bad faith, and thereby exposing themselves and its company to claims, by paying public shareholders from the Trust Account prior to addressing the claims of creditors. Claims may be brought against PowerUp for these reasons. PowerUp and its directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of the Trust Account while PowerUp was unable to pay its debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable to a fine of KYD$15,000, which equates to approximately US$18,000, and to imprisonment for five years in the Cayman Islands.
Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for PowerUp to effectuate the Business Combination, require substantial financial and management resources and increase the time and costs of completing an initial business combination.
The fact that PowerUp is a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on PowerUp as compared to other public companies. Aspire is not a public reporting company required to comply with Section 404 of the Sarbanes-Oxley Act and New Aspire management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to New Aspire after the Business Combination. If we are not able to implement the requirements of Section 404, including any additional requirements once we are no longer an emerging growth company, in a timely manner or with adequate compliance, we may not be able to assess whether our internal control over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of New Aspire Common Stock.
If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our common stock may decline.
Aspire is currently not subject to Section 404 of the Sarbanes-Oxley Act. However, following consummation of the Business Combination, New Aspire will be required to provide management’s attestation on its internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.
If New Aspire generally fails to establish and maintain effective internal controls appropriate for a public company, New Aspire may be unable to produce timely and accurate financial statements, and New Aspire may conclude that its internal control over financial reporting is not effective, which could adversely impact our investors’ confidence and our stock price.
We cannot assure you that there will not be material weaknesses in our internal control over financial reporting in the future following consummation of the Business Combination. Our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as an “emerging growth company,” which may increase the risk that material weaknesses or significant deficiencies in our internal control over financial reporting go undetected. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
A significant portion of PowerUp’s total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of New Aspire Common Stock to drop significantly, even if New Aspire’s business is doing well.
Upon completion of the Business Combination, sales of a substantial number of shares of New Aspire Common Stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of New Aspire Common Stock.
It is anticipated that, after completion of the Business Combination, (i) the Aspire Stockholders will own, collectively, approximately 75.2% of the outstanding New Aspire Common Stock and (ii) PowerUp’s Initial Shareholders will own approximately 19.8% of the outstanding New Aspire Common Stock, in each case, assuming that none of PowerUp’s outstanding public shares are redeemed in connection with the Business Combination, or approximately 76.2% and 20.0%, respectively, assuming that all of PowerUp’s outstanding public shares are redeemed in connection with the Business Combination. These percentages assume that (i) 35,000,000 shares of New Aspire Common Stock will be issued to the Aspire Stockholders at Closing; (ii) 3,750,000 Working Capital Loan Shares will be issued at Closing; and (iii) all PowerUp warrants to purchase New Aspire Common Stock that will be outstanding immediately following Closing have not been exercised. If the actual facts are different than these assumptions, the ownership percentages in New Aspire will be different.
Although the Sponsor and certain of Aspire’s stockholders will be subject to certain restrictions regarding the transfer of New Aspire Common Stock, these shares may be sold after the expiration or early termination of the applicable lock-ups under the Letter Agreement and the Lock-Up Agreements, respectively. New Aspire intends to file one or more registration statements shortly after the Closing of the Business Combination to provide for the resale of such shares from time to time. As restrictions on resale end and the registration statements are available for use, the market price of New Aspire Common Stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.
New Aspire’s directors, executive officers and principal stockholders will have substantial control over New Aspire’s company after the consummation of the Business Combination, which could limit your ability to influence the outcome of key transactions, including a change of control.
We expect that (i) New Aspire’s executive officers, directors and principal stockholders and their affiliates will beneficially own approximately 75.2% of the outstanding shares of New Aspire Common Stock following the Business Combination, assuming none of PowerUp’s outstanding public shares are redeemed in connection with the Business Combination, or approximately 76.2%, assuming that all of PowerUp’s outstanding public shares are redeemed in connection with the Business Combination. As a result, these stockholders will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors and the approval of Business Combinations, acquisitions or other extraordinary transactions. They may also have interests that differ from yours and may vote in a way with which you disagree.
The public shareholders may experience immediate dilution as a consequence of the issuance of New Aspire Common Stock as consideration in the Business Combination.
In accordance with the terms and subject to the conditions of the Business Combination Agreement, at Closing, the Aspire Stockholders shall collectively be entitled to receive, in the aggregate, a number of shares of duly authorized, validly issued, fully paid and nonassessable shares of New Aspire Common Stock with an aggregate value equal to (a) $350 million less (b) the amount by which Aspire’s cash at Closing is less than the Minimum Cash Condition (but only in the event the Minimum Cash Condition is waived by PowerUp), if any, less (c) Aspire’s Indebtedness at Closing. For further details, see “Business Combination Proposal — Consideration to Aspire Stockholders in the Business Combination.”
In addition, Aspire employees, directors and consultants hold, and after the Business Combination, may be granted, equity awards and/or purchase rights under the 2024 Plan. You will experience additional dilution when those equity awards and purchase rights become vested and settled or exercisable, as applicable, for shares of New Aspire Common Stock.
The issuance of additional New Aspire Common Stock will significantly dilute the equity interests of existing holders of PowerUp securities, and may adversely affect prevailing market prices for the New Aspire Common Stock and/or the New Aspire warrants.
Warrants will become exercisable for New Aspire Common Stock, which, if exercised, would increase the number of shares eligible for future resale in the public market and result in dilution to its stockholders.
If the Business Combination is completed, outstanding warrants to purchase an aggregate of 24,138,333 shares of New Aspire Common Stock will become exercisable in accordance with the terms of the Warrant Agreement. These warrants will become exercisable 30 days after Closing. The exercise price of these warrants will be $11.50 per share. To the extent such warrants are exercised, additional shares of New Aspire Common Stock will be issued, which will result in dilution to the holders of New Aspire Common Stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the prevailing market prices of New Aspire Common Stock. However, there is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. See “— Even if the Business Combination is consummated, the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.”
Even if the Business Combination is consummated, the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.
The public warrants were issued in registered form under the Warrant Agreement between Equiniti, as warrant agent, and PowerUp. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or correct any mistake, but requires the approval by the holders of at least 50% of the then-outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, PowerUp may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding public warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the Warrant Agreement with respect to the private placement warrants, 50% of the number of the then outstanding private placement warrants. Although PowerUp’s ability to amend the terms of the public warrants with the consent of at least 50% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of shares of New Aspire Common Stock purchasable upon exercise of a warrant.
New Aspire may redeem a warrant holder’s unexpired warrants prior to their exercise at a time that may be disadvantageous to such warrant holder, thereby making its warrants worthless.
New Aspire will have the ability to redeem outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of New Aspire public shares equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like for certain issuances of public shares and equity-linked securities for capital raising purposes in connection with the closing of its initial business combination) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date New Aspire sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by New Aspire, New Aspire may exercise its redemption right even if New Aspire is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force a warrant holder to: (i) exercise its warrants and pay the exercise price at a time when it may be disadvantageous for such warrant holder to do so; (ii) sell its warrants at the then-current market price when a warrant holder might otherwise wish to hold its warrants; or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of a warrant holder’s warrants. None of the private placement warrants will be redeemable by PowerUp so long as they are held by their initial purchasers or their permitted transferees.
The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants. None of the private placement warrants will be redeemable by PowerUp, subject to certain circumstances, so long as they are held by their initial purchasers or their permitted transferees.
Assuming maximum redemptions of 100% of the public shares, and using the closing warrant price on Nasdaq of $0.04 as of January 7, 2025, the aggregate fair value of public warrants that can be retained by redeeming stockholders is approximately $575,000.
A warrant holder may only be able to exercise its public warrants on a “cashless basis” under certain circumstances, and if a warrant holder does so, such warrant holder will receive fewer shares of New Aspire Common Stock from such exercise than if a warrant holder were to exercise such warrants for cash.
The Warrant Agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the New Aspire Common Stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the Warrant Agreement; (ii) if New Aspire has so elected and the New Aspire Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if New Aspire has so elected and it calls the public warrants for redemption. If you exercise your public warrants on a cashless basis, you would pay the warrant exercise price by surrendering all of the warrants for that number of New Aspire Common Stock equal to the quotient obtained by dividing (x) the product of the number of New Aspire Common Stock underlying the warrants, multiplied by the excess of the “fair market value” of the New Aspire Common Stock (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the average reported closing price of the New Aspire Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of the warrants. As a result, you would receive fewer shares of New Aspire Common Stock from such exercise than if you were to exercise such warrants for cash.
Even if we consummate the Business Combination, there can be no assurance that our public warrants will be in the money at the time they become exercisable, and they may expire worthless.
The exercise price for the outstanding public warrants is $11.50 per share. There can be no assurance that such warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the warrants may expire worthless.
PowerUp’s warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of its warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with PowerUp.
PowerUp’s warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against PowerUp arising out of or relating in any way to the Warrant Agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that PowerUp irrevocably submits to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. PowerUp will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions of the Warrant Agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of its warrants shall be deemed to have notice of and to have consented to the forum provisions in its Warrant Agreement. If any action, the subject matter of which is within the scope of the forum provisions of the Warrant Agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of PowerUp’s warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with PowerUp’s, which may discourage such lawsuits. Alternatively, if a court were to find this provision of PowerUp’s warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, PowerUp may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect its business, financial condition and results of operations and result in a diversion of the time and resources of its management and board of directors.
There can be no assurance that New Aspire’s securities will continue to be listed on Nasdaq following the Business Combination, or that we will be able to comply with the continued listing standards of Nasdaq. New Aspire’s failure to meet the continued listing requirements of Nasdaq could result in a delisting of its securities.
Although it is a requirement for the Closing of the Business Combination that New Aspire obtain initial listing on Nasdaq in connection with the Business Combination, in order to continue to maintain the listing of New Aspire’s securities on Nasdaq, New Aspire will be required to demonstrate compliance with Nasdaq’s continued listing requirements. New Aspire may be unable to comply with such requirements and may not maintain the listing of its securities in the future. If, after the Business Combination, Nasdaq delists New Aspire’s securities from trading on its exchange for failure to meet the continued listing standards, New Aspire and its stockholders could face significant material adverse consequences including, but not limited to:
| | ● | a limited availability of market quotations for New Aspire’s securities; |
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| | ● | reduced liquidity for New Aspire’s securities; |
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| | ● | a determination that New Aspire Common Stock is a “penny stock,” which will require brokers trading in New Aspire Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for New Aspire’s securities; |
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| | ● | a limited amount of news and analyst coverage; and |
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| | ● | a decreased ability to issue additional securities or obtain additional financing in the future. |
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” If New Aspire’s securities are listed on Nasdaq, they will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state, other than the state of Idaho, having used these powers to prohibit or restrict the sale of securities issued by blank check companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if New Aspire’s securities were no longer listed on Nasdaq, the securities would not be covered securities and New Aspire would be subject to regulation in each state in which it offers its securities.
If, after initial listing, New Aspire fails to satisfy the continued listing requirements of Nasdaq such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist its securities. Such a delisting would likely have a negative effect on the price of the securities and would impair your ability to sell or purchase the securities when you wish to do so. In the event of a delisting, New Aspire can provide no assurance that any action taken by it to restore compliance with listing requirements would allow its securities to become listed again, stabilize the market price or improve the liquidity of its securities, prevent its securities from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements. Additionally, if New Aspire’s securities become delisted from Nasdaq for any reason, and are quoted on an OTC Markets Group, Inc. exchange that is not a national securities exchange, the liquidity and price of these securities may be more limited than if they were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your New Aspire securities unless a market can be established or sustained.
New Aspire does not intend to pay cash dividends for the foreseeable future.
Following the Business Combination, New Aspire currently intends to retain its future earnings, if any, to finance the further development and expansion of its business and does not intend to pay cash dividends for the foreseeable future. Any future determination to pay dividends will be at the discretion of New Aspire’s Board and will depend on its financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as its board of directors deems relevant.
In addition, the terms of any future debt agreements may preclude New Aspire from paying dividends. As a result, capital appreciation, if any, of New Aspire Common Stock will be your sole source of gain for the foreseeable future.
Because New Aspire does not anticipate paying any cash dividends on its capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.
PowerUp has never declared or paid cash dividends on its capital stock. New Aspire currently intends to retain all of its future earnings, if any, to finance the growth and development of its business. In addition, the terms of any future debt agreements may preclude New Aspire from paying dividends. As a result, capital appreciation, if any, of New Aspire Common Stock will be your sole source of gain for the foreseeable future.
PowerUp is subject to, and New Aspire will be subject to, changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both PowerUp’s costs and the risk of non-compliance and will increase both New Aspire’s costs and the risk of non-compliance.
PowerUp is and New Aspire will be subject to rules and regulations by various governing bodies, including, for example, the SEC, which is charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. PowerUp’s efforts to comply with new and changing laws and regulations have resulted in and New Aspire’s efforts to comply with new and changing laws and regulations likely will result in increased general and administrative expenses and a diversion of management time and attention.
Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to New Aspire’s disclosure and governance practices. If New Aspire fails to address and comply with these regulations and any subsequent changes, New Aspire may be subject to penalty and its business may be harmed.
During the pendency of the Business Combination, PowerUp will not be able to solicit, initiate, or take any action to facilitate or encourage any inquiries or the making, submission, or announcement of, or enter into an initial business combination with another party because of restrictions in the Business Combination Agreement. Furthermore, certain provisions of the Business Combination Agreement will discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Business Combination Agreement.
During the pendency of the Business Combination, PowerUp will not be able to enter into an initial business combination with another party because of restrictions in the Business Combination Agreement. Furthermore, certain provisions of the Business Combination Agreement will discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Business Combination Agreement, in part because of the inability of the PowerUp Board to change its recommendation in connection with the Business Combination. The Business Combination Agreement does not permit the PowerUp Board to change, withdraw, withhold, qualify or modify, or publicly propose to change, withdraw, withhold, qualify or modify its recommendation in favor of adoption of the Proposals.
Certain covenants in the Business Combination Agreement impede the ability of PowerUp to make acquisitions or complete certain other transactions pending completion of the Business Combination. As a result, PowerUp may be at a disadvantage to its competitors during that period. In addition, if the Business Combination is not completed, these provisions will make it more difficult to complete an alternative business combination following the termination of the Business Combination Agreement due to the passage of time during which these provisions have remained in effect.
Increased volatility for publicly traded securities and other economic disruptions and uncertainties, including due to recent increases in inflation and interest rates in the United States and elsewhere and military conflict in Ukraine or elsewhere, could make it more difficult for PowerUp to consummate the Business Combination.
Recent increases in inflation and interest rates in the United States and elsewhere, military conflict in Ukraine or elsewhere, and other economic or geopolitical events, may lead to increased price volatility for publicly traded securities, including ours, and may lead to other national, regional and international economic disruptions or economic uncertainty, any of which could make it more difficult for us to consummate the Business Combination.
The waiver of fees by Citigroup may indicate that they may be unwilling to be associated with the disclosures in this proxy statement/prospectus or the underlying business analysis related to the Business Combination.
Citigroup was paid a cash underwriting discount of $0.20 per unit, or $5,000,000 in the aggregate at the closing of the initial public offering. Citigroup agreed to defer the cash underwriting discount of $0.20 per share related to the over-allotment to be paid upon the closing of the Business Combination ($750,000 in the aggregate). In addition, Citigroup was originally entitled to a deferred underwriting commissions of $0.35 per unit, or $10,062,500 from the closing of the initial public offering. The total deferred fee was $10,812,500 consisting of the $10,062,500 deferred portion and the $750,000 cash discount was agreed to be deferred until Business Combination. The deferred fee was to become payable to the underwriters from the amounts held in the Trust Account solely if the Company completes a Business Combination, subject to the terms of the underwriting agreement.
On June 28, 2023, the underwriters agreed to waive their entitlement to the deferred underwriting commissions of $10,812,500 in accordance with the Underwriting Agreement. The underwriters did not provide a reason for waiving the deferred underwriting commission and there was no consideration exchanged for the waiver. Representatives of Citigroup did not review or comment on any of the disclosures in this proxy statement/prospectus. Accordingly, no inference should be drawn that Citigroup agrees with the disclosure regarding their waiver. Shareholders should be aware that such waivers indicate that Citigroup does not want to be associated with the disclosures in this proxy statement/prospectus or any underlying business analysis related to the transaction described herein. Further, pursuant to the letter received on June 28, 2023, Citigroup ceased and refuses to act in every office, capacity and relationship with respect to the Business Combination.
Citigroup has performed all its obligations under the Underwriting Agreement to obtain its fee and is therefore gratuitously waiving its right to be compensated. Such a fee waiver for services already rendered is unusual. PowerUp was not made aware of the reasons why Citigroup waived the deferred underwriting commission fee and there was no consideration exchanged for the waiver. Citigroup has not performed any additional services for PowerUp after the IPO and is not expected to perform any additional services following the consummation of the Business Combination.
Investors should not place any reliance on the fact that Citigroup was previously involved with PowerUp’s initial public offering.
Without additional financing, it is possible that our shareholders will vote in favor of the Business Combination and related proposals and yet the Business Combination may not close.
Even if the Business Combination Agreement is approved by PowerUp’s shareholders, specified conditions must be satisfied or waived before the parties to the Business Combination Agreement are obligated to complete the Business Combination. For further details, see “Business Combination Proposal – Conditions to Closing of the Business Combination.” PowerUp and Aspire may not satisfy all of the closing conditions in the Business Combination Agreement. For example, the Minimum Cash Condition requires Aspire to have no less than $0.00 of available cash, after giving effect to the payment in full of Aspire’s unpaid transaction expenses and PowerUp’s unpaid expenses and liabilities (including, but not limited to, the Working Capital Loans). Therefore, even if the Business Combination Proposal is approved, the Business Combination will not close if Aspire does not have sufficient cash remaining to meet the Minimum Cash Condition.
The parties anticipate needing to raise outside capital through debt or equity financing at, or in connection with, Closing to allow Aspire to meet the Minimum Cash Condition, to allow the combined company to meet Nasdaq initial listing requirements as well as demonstrate to Nasdaq its ability to continue to meet the exchange’s on-going listing requirements, and to allow the combined company to satisfy certain obligations and have sufficient working capital. If the parties are unsuccessful at closing a financing concurrent with the Closing of the Business Combination, the Closing likely would not occur even if PowerUp waives the $0.00 Minimum Cash Condition, unless PowerUp and/or Aspire is able to defer, or convert into equity, some or all of their expenses and liabilities. However, as of the date of the proxy statement/prospectus, no parties have affirmatively agreed to waive or convert into equity, any obligations that are, by their terms, repayable in cash. This could result in the parties electing to proceed with the Closing, and the combined company would have to reach an accommodation with its creditors and other counterparties to defer repayment of those obligations and/or the combined company having insufficient cash to fully implement its business and commercialize its products. There is no assurance that any debtors or counterparties will agree to defer obligations owed by the combined company or otherwise agree to accommodations favorable to the combined company.
Moreover, any obligations of the combined company that are not satisfied at closing, or that are deferred at the closing, would result in the combined company carrying additional liabilities on its balance sheet and, in turn, could have an adverse effect on the combined company’s ability to raise additional equity or debt financing after the closing, or result in the combined company raising capital on terms less favorable, and also would result in the combined company needing to reserve or utilize funds for deferred expenses and obligations in lieu of utilizing those funds to further its business operations. Impediments to the combined company’s access to outside capital, and matters that could cause the combined company to scale back or delay the implementation of its business plan would likely delay the on-going development of the combined company’s products and timeline by which hopes to begin generating revenue which would have an adverse effect on the combined company’s results of operations. For more information, see “Summary of the Proxy Statement/Prospectus – Sources and Uses of Funds for the Business Combination.”
If the Business Combination does not qualify as a “reorganization” for U.S. federal income tax purposes, U.S. holders of Aspire Common Stock will be required to recognize gain or loss for U.S. federal income tax purposes upon the exchange of their Aspire Common Stock for New Aspire Common Stock in the Business Combination.
The U.S. federal income tax consequences of the Business Combination to Aspire U.S. holders (as defined in the section titled “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders—Material U.S. Federal Income Tax Consequences of the Business Combination”) will depend on whether the Business Combination qualifies as a “reorganization” for U.S. federal income tax purposes. If the Business Combination fails to qualify as a reorganization within the meaning of Section 368(a) of the Code, an Aspire U.S. holder would recognize gain or loss for U.S. federal income tax purposes on each share of Aspire Common Stock surrendered in the Business Combination for New Aspire Common Stock. For a more complete discussion of the material U.S. federal income tax consequences of the Business Combination, please carefully review the information set forth in the section titled “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders—Material U.S. Federal Income Tax Consequences of the Business Combination” in this proxy statement/prospectus. Each Aspire U.S. holder of Aspire Common Stock should consult its own tax advisor to determine the particular tax consequences to it in light of its own particular circumstances if the Business Combination fails to qualify as a reorganization for U.S. federal income tax purposes.
The PowerUp Domestication may result in adverse tax consequences for Public Shareholders and holders of PowerUp Warrants.
As discussed more fully under the section titled “Material U.S. Federal Income Tax Consequences of the PowerUp Domestication and Redemption to Public Shareholders” below, the PowerUp Domestication will qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code. In the case of a transaction, such as the PowerUp Domestication, that qualifies as a reorganization within the meaning of Section 368(a)(1)(F) of the Code, U.S. Holders (as defined in such section) of Public Shares will be subject to Section 367(b) of the Code and as a result:
