ESH Acquisition Corp 10-Q for FY2025 Q3
ESH Acquisition Corp. (ESHA)
About this 10-Q
ESH Acquisition Corp filed this 10-Q on November 17, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $802.48K
- compared with net income of $1.06M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
For the quarter ended
For the transition period from to
Commission file number:
(Exact Name of Registrant as Specified in Its Charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Issuer’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The | ||||
| The |
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an 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 | ☐ |
| ☒ | 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 13(a) of the Exchange Act.
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November
17, 2025, there were
ESH ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2025
TABLE OF CONTENTS
i
PART I - FINANCIAL INFORMATION
Item 1. Interim Financial Statements
ESH ACQUISITION CORP.
CONDENSED BALANCE SHEETS
| September 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Cash – restricted | ||||||||
| Due from Sponsor | ||||||||
| Prepaid expenses | ||||||||
| Prepaid insurance – current portion | ||||||||
| Prepaid income taxes | ||||||||
| Total Current Assets | ||||||||
| Investments held in Trust Account | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Due to Sponsor | ||||||||
| Excise taxes payable | ||||||||
| Franchise tax payable | ||||||||
| Income taxes payable | ||||||||
| Total Current Liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and Contingencies | ||||||||
| COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION | ||||||||
| Class A common stock subject to possible redemption, | ||||||||
| STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||
| Preferred stock, $ | ||||||||
| Class A common stock, $ | ||||||||
| Class B common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| (Accumulated deficit) retained earnings | ( | ) | ||||||
| TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY | ( | ) | ||||||
| TOTAL LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
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ESH ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| General and administrative expenses | $ | $ | $ | $ | ||||||||||||
| Franchise tax expense | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income: | ||||||||||||||||
| Interest earned on investments held in Trust Account | ||||||||||||||||
| Interest income - bank | ||||||||||||||||
| Total other income | ||||||||||||||||
| (Loss) income before provision for income taxes | ( | ) | ( | ) | ||||||||||||
| Provision for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net (loss) income | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Basic and diluted weighted average shares outstanding, Class A common stock | ||||||||||||||||
| Basic and diluted net (loss) income per share | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Basic and diluted weighted average shares outstanding, non-redeemable Class A common stock | ||||||||||||||||
| Basic and diluted net (loss) income per share | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Basic and diluted weighted average shares outstanding, Class B common stock | ||||||||||||||||
| Basic and diluted net (loss) income per share | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
2
ESH ACQUISITION CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
(UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025
| Class A Common Stock | Class B Common Stock | Additional Paid-in | Subscription | Retained Earnings (Accumulated | Total Stockholders’ (Deficit) | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Receivable | Deficit) | Equity | |||||||||||||||||||||||||
| Balance – December 31, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
| Accretion of Class A common stock subject to possible redemption to redemption amount | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance – March 31, 2025 (unaudited) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Accretion of Class A common stock subject to possible redemption to redemption amount | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance – June 30, 2025 (unaudited) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Accretion of Class A common stock subject to possible redemption to redemption amount | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance – September 30, 2025 (unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024
| Class A Common Stock | Class B Common Stock | Additional Paid-in | Retained | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Earnings | Equity | ||||||||||||||||||||||
| Balance – January 1, 2024 | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| Remeasurement of Class A common stock subject to possible redemption | — | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Balance – March 31, 2024 (unaudited) | ||||||||||||||||||||||||||||
| Remeasurement of Class A common stock subject to possible redemption | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Balance – June 30, 2024 (unaudited) | ||||||||||||||||||||||||||||
| Remeasurement of Class A common stock subject to possible redemption | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Balance – September 30, 2024 (unaudited) | $ | $ | $ | $ | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
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ESH ACQUISITION CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Interest earned on investments held in Trust Account | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Short-term prepaid insurance | ||||||||
| Prepaid income taxes | ( | ) | ||||||
| Long-term prepaid insurance | ||||||||
| Due from Sponsor | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Due to Sponsor | ||||||||
| Franchise tax payable | ( | ) | ( | ) | ||||
| Excise taxes payable | ||||||||
| Income taxes payable | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Investment of cash into Trust Account | ( | ) | ||||||
| Cash withdrawn from Trust Account to pay franchise and income taxes | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from related party | — | |||||||
| Payment of offering costs | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net Change in Cash and Restricted Cash | $ | ( | ) | $ | ( | ) | ||
| Cash and Restricted Cash – Beginning of period | ||||||||
| Cash and Restricted Cash – End of period | $ | $ | ||||||
| Cash and Restricted Cash, end of period | ||||||||
| Cash | ||||||||
| Cash – restricted | ||||||||
| Cash and Restricted Cash, end of period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid during the year for: | ||||||||
| Income tax | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
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ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
ESH Acquisition Corp. (the “Company”)
was incorporated as a Delaware corporation on
As of September 30, 2025, the Company had not commenced any operations. All activity for the period from November 17, 2021 (inception) through September 30, 2025 relates to the Company’s formation and the initial public offering (the “IPO”), which is described below, and subsequent to the IPO, identifying a target company for the Initial Business Combination. The Company will not generate any operating revenues until after the completion of the Initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds held in the Trust Account (defined below). The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s
IPO was declared effective on June 13, 2023. On June 16, 2023, the Company consummated the IPO of
Simultaneously with the closing of the IPO, the
Company consummated the sale of
Transaction costs amounted to $
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of its IPO and the sale of Private Placement Warrants, although substantially
all of the net proceeds are intended to be applied generally toward consummating the Initial Business Combination. The Company’s
Initial Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least
Following the closing of the IPO on June 16, 2023,
an amount of $
5
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
The Company will provide holders of the Company’s
outstanding Public Shares sold in the IPO (the “Public Stockholders”) with the opportunity to redeem all or a portion of
their Public Shares upon the completion of the Initial Business Combination either (i) in connection with a stockholder meeting called
to approve the Initial Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder
approval of the Initial Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public
Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially
anticipated to be $
The Public Shares are recorded at a redemption
value and classified as temporary equity in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”). The Company
will proceed with an Initial Business Combination if the Company has net tangible assets of at least $
Notwithstanding the foregoing, the Amended and
Restated Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other
person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act),
will be restricted from redeeming its shares with respect to more than an aggregate of
The Initial Stockholders will agree not to propose
an amendment to the Certificate of Incorporation (A) in a manner that would affect the substance or timing of the Company’s obligation
to redeem
On December 3, 2024, the Company held a special
meeting of stockholders (the “Special Meeting”). At the Special Meeting, the Company’s stockholders approved a proposal
to amend the Company’s Amended and Restated Certificate of Incorporation to provide the Company with the right to extend the date
by which the Company must consummate its Initial Business Combination (the “Business Combination”), for up to 12 additional
one-month periods after December 16, 2024 (and ultimately no later than December 16, 2025) (the “Combination Period”) (the
“Extension Amendment” and, such proposal, the “Extension Amendment Proposal”). The Company’s stockholders
also approved a proposal to amend the Investment Management Trust Agreement, dated June 13, 2023, by and between the Company and Continental
Stock Transfer & Trust Company, as trustee (“Continental”), to give the Company the right to extend the date on which
Continental must liquidate the Trust Account established in connection with the Company’s initial public offering if the Company
has not completed its Initial Business Combination, for up to 12 additional one-month periods after December 16, 2024 (and ultimately
no later than December 16, 2025) (the “Trust Amendment” and, such proposal, the “Trust Amendment Proposal”) upon
the deposit into the Trust Account of the lesser of (x) $
In connection with the votes to approve the Extension
Amendment Proposal and the Trust Amendment Proposal, the holders of
6
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
The Company expects to hold its annual meeting
of stockholders (the “2025 Annual Meeting”) on December 3, 2025 to, among other things, vote on a proposal to amend the Company’s
amended and restated certificate of incorporation to extend the date by which the Company must consummate a business combination (the
“Second Extension Amendment Proposal”). If passed, the Second Extension Amendment Proposal will allow the Company to, at its
discretion, exercise up to six monthly extensions to the date by which the Company must consummate a business combination, from December
16, 2025 until as late as June 13, 2026, or, if it fails to consummate a business combination during such time, cease its operations and
redeem or repurchase
If the Second Extension Amendment Proposal is
not approved, the Company 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 (which interest shall be net of taxes payable, and less up to $
On July 20, 2023, the Company issued a press release announcing that, on July 21, 2023, the Units would no longer trade, and that the Company’s common stock and rights, which together comprise the Units will commence trading separately. The common stock and rights will be listed on the Nasdaq Global Market and trade with the ticker symbols “ESHA,” and “ESHAR,” respectively. This is a mandatory and automatic separation, and no action was required by the holders of Units.
The Initial Stockholders will not be entitled
to liquidation rights with respect to the Founder Shares if the Company fails to complete an Initial Business Combination within the Combination
Period. However, if the Initial Stockholders should acquire Public Shares in or after the IPO, they will be entitled to liquidating distributions
from the Trust Account with respect to such Public Shares if the Company fails to complete an Initial Business Combination within the
Combination Period. The underwriters will agree to waive their rights to the Marketing Fee (see Note 6) held in the Trust Account in the
event the Company does not complete an Initial Business Combination within the Combination Period and, in such event, such amounts will
be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the
event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including
Trust Account assets) will be only $
On April 11, 2025, the Company received a notice
from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that, for the prior
7
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
On April 22, 2025, May 15, 2025, June 13, 2025
and July 18, 2025, the Company deposited $
On September 29, 2025 and October
17, 2025, the Company deposited $
On September 15, 2025, the Company entered into the “Business Combination Agreement” with The Original Fit Factory, Ltd., a company registered in Scotland with registration number SC541304 (“TOFF”), The Original Fit Factory Holdings Inc., a Delaware corporation (“PubCo”), and The Original Fit Factory Acquisition Inc., a Delaware corporation and a wholly owned subsidiary of PubCo (“Merger Sub”) (see Note 6).
Risks and Uncertainties
On August 16, 2022, President Biden signed into
law the Inflation Reduction Act of 2022 (the “IR Act”), which, among other things, generally imposes a
The imposition of the Excise Tax could cause a reduction in the cash available on hand to complete an initial Business Combination or for effecting redemptions and may affect the ability to complete an initial Business Combination, fund future operations or make distributions to stockholders. In addition, the Excise Tax could cause a reduction in the per share amount payable to Public Stockholders in the event the Company liquidates the Trust Account due to a failure to complete an initial Business Combination within the requisite time frame.
In connection with the stockholders’ vote
at the 2024 Annual Meeting held on December 3, 2024, there were
Pursuant to Internal Revenue Service regulations, the Company was required to file a return and remit payment for the 2024 excise tax liabilities on or before April 30, 2025. As of the filing of these unaudited condensed financial statements, the Company has not filed a return for the 2024 excise tax liability and such excise tax remains unpaid.
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law in the United States. The significant provisions of OBBBA include the permanent extension and modification of certain provisions of the Tax Cuts and Jobs Act, including international tax provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented in later years. The Company is evaluating the provisions of OBBBA but it is not expected to have a material impact on the Company’s unaudited condensed financial statements.
Management is currently evaluating the impact of the current global economic uncertainty, rising interest rates, high inflation, high energy prices, supply chain disruptions, the Israel-Hamas conflict and the Russia-Ukraine war (including the impact of any sanctions imposed in response thereto) and has concluded that while it is reasonably possible that any of these events could have a negative effect on the Company’s financial position, results of operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Company cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude, or the extent to which they may negatively impact the Company’s business and its ability to complete an Initial Business Combination.
8
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
Going Concern Consideration
As of September 30, 2025, the Company had cash
of $
Until the consummation of an Initial Business Combination, the Company will be using the funds held outside the Trust Account for identifying and evaluating target businesses, performing due diligence on prospective target businesses, paying for travel expenditures, reviewing corporate documents and material agreements of prospective target businesses, and structuring, negotiating and completing an Initial Business Combination.
In order to finance transaction costs in connection
with an Initial Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors
may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes
an Initial Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released
to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that
the Initial Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the
Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing,
the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans.
The Working Capital Loans would either be repaid upon consummation of an Initial Business Combination, without interest, or, at the lender’s
discretion, up to $
In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Codification (“ASC”) Topic 205-40, “Presentation of Financial Statements—Going Concern”, the Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the unaudited condensed financial statements. The Company’s management has determined that if the Company is unable to complete an Initial Business Combination by December 16, 2025 (Extension Date), then the Company will cease all operations except for the purpose of liquidating. The Company’s liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. Management plans to consummate an Initial Business Combination prior to the mandatory liquidation date. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after December 16, 2025 (Extension Date).
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on April 4, 2025. The interim results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any future periods.
9
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
Emerging Growth Company
The Company is 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its 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 Securities Act registration statement 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. The Company 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, the Company, 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 the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had $
Cash - Restricted
Cash that is encumbered or otherwise restricted
as to its use is included in cash – restricted. As of September 30, 2025 and December 31, 2024, the balance was $
Investments Held in Trust Account
At September 30, 2025 and December 31, 2024, all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. treasury securities. The investments held in Trust Account are classified as trading securities. Trading securities are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on investments held in Trust Account in the accompanying unaudited condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
10
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal
Deposit Insurance Corporation coverage limit of $
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the condensed balance sheets, primarily due to their short-term nature.
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The Company’s financial instruments are classified as either Level 1, Level 2, or Level 3. These tiers include:
| ● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Offering Costs
Offering costs consisted of legal, accounting, and other costs incurred through the balance sheet date that were directly related to the IPO. Upon completion of the IPO, offering costs were allocated to the separable financial instruments issued in the IPO based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to the warrants and public rights included in the Units sold in the IPO were charged to equity. Offering costs allocated to the Class A common stock were charged against the carrying value of Class A common stock subject to possible redemption upon the completion of the IPO.
Class A Common Stock Subject to Possible Redemption
The Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, or if there is a stockholder vote or tender offer in connection with the Company’s Initial Business Combination. In accordance with ASC 480-10-S99, the Company classifies Public Shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Public Shares sold as part of the Units in the IPO were issued with other freestanding instruments (i.e., Public Rights), and as such, the initial carrying value of Public Shares classified as temporary equity is the allocated proceeds determined in accordance with ASC 470-20. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital and retained earnings. Accordingly, at September 30, 2025 and December 31, 2024, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ (deficit) equity section of the Company’s condensed balance sheets.
On December 3, 2024, the Company held a special meeting of stockholders. At the Special Meeting, the Company’s stockholders approved a proposal to amend the Company’s Amended and Restated Certificate of Incorporation to provide the Company with the right to extend the date by which the Company must consummate its Initial Business Combination (the “Business Combination”), for up to 12 additional one-month periods after December 16, 2024 (and ultimately no later than December 16, 2025) (the “Extension Amendment” and, such proposal, the “Extension Amendment Proposal”).
11
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
In connection with the votes to approve the Extension
Amendment Proposal and the Trust Amendment Proposal, the holders of
The Company’s Class A common stock features
certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain
future events.
| Gross proceeds | $ | |||
| Less: | ||||
| Proceeds allocated to Public Rights | ( | ) | ||
| Class A common stock issuance costs | ( | ) | ||
| Plus: | ||||
| Remeasurement of carrying value to redemption value | ||||
| Class A common stock subject to possible redemption, December 31, 2023 | ||||
| Less: | ||||
| Redemption of Class A ordinary stock subject to redemption | ( | ) | ||
| Plus: | ||||
| Remeasurement of carrying value to redemption value | ||||
| Class A common stock subject to possible redemption, December 31, 2024 | ||||
| Plus: | ||||
| Remeasurement of carrying value to redemption value | ||||
| Class A common stock subject to possible redemption, September 30, 2025 | $ |
Derivative Financial Instruments
The Company evaluates its equity-linked financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815, “Derivatives and Hedging.” For derivative financial instruments that are classified as liabilities, the derivative instrument is initially recognized at fair value with subsequent changes in fair value recognized in the unaudited condensed statements of operations each reporting period. The classification of derivative instruments, including whether such instruments should be classified as liabilities or as equity, is evaluated at the end of each reporting period. The Company accounted for the rights issued in connection with the IPO and the warrants issued in connection with the Private Placement as equity-classified instruments in accordance with ASC 815 as they did not meet the liability criteria (i.e., cashless exercises).
Income Taxes
The Company follows the asset and liability method
of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for
the estimated future tax consequences attributable to differences between the unaudited condensed financial statements carrying amounts
of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment
date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Deferred
tax assets were deemed de minimis as of September 30, 2025 and December 31, 2024. As of September 30, 2025 and December 31, 2024, the
Company’s deferred tax asset had a full valuation allowance recorded against it. The effective tax rate was
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
12
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2025 and December 31, 2024. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company has identified the United States as its only “major” tax jurisdiction. The Company has been subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Net (Loss) Income per Share of Common Stock
The Company has two classes of stock, which are
referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of stock.
The Company has not considered the effect of the rights and warrants sold in the IPO and the Private Placement to purchase an aggregate
of
| For the Three Months Ended September 30, | ||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||
| Class A | Class A | Class A | Class A | |||||||||||||||||||||
| Redeemable | Non-Redeemable | Class B | Redeemable | Non-Redeemable | Class B | |||||||||||||||||||
| Basic and diluted net (loss) income per share | ||||||||||||||||||||||||
| Numerator | ||||||||||||||||||||||||
| Allocation of net (loss) income | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | — | $ | |||||||||||
| Denominator | ||||||||||||||||||||||||
| Weighted average shares outstanding | — | |||||||||||||||||||||||
| Basic and diluted net (loss) income per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | — | $ | |||||||||||
| For the Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||
| Class A | Class A | Class A | Class A | |||||||||||||||||||||
| Redeemable | Non-Redeemable | Class B | Redeemable | Non-Redeemable | Class B | |||||||||||||||||||
| Basic and diluted net (loss) income per share | ||||||||||||||||||||||||
| Numerator | ||||||||||||||||||||||||
| Allocation of net (loss) income | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | — | $ | |||||||||||
| Denominator | ||||||||||||||||||||||||
| Weighted average shares outstanding | — | |||||||||||||||||||||||
| Basic and diluted net (loss) income per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | — | $ | |||||||||||
13
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the IPO, the Company sold
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the IPO, the
Sponsor, I-Bankers and Dawson James purchased an aggregate of
Each whole Private Placement Warrant is exercisable
for one whole share of Class A common stock at a price of $
The Sponsor and the Company’s officers and
directors have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On December 17, 2021, the Sponsor subscribed to
purchase
On December 2, 2024 the Sponsor elected to convert
14
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
The Converted Shares are subject to the same restrictions
as applied to the Class B Founder Shares before the Conversion, including, among other things, certain transfer restrictions, waiver of
redemption rights and the obligation to vote in favor of an Initial Business Combination as described in the prospectus for the Company’s
initial public offering. The Sponsor, with respect to itself, acknowledged that it has no right, title, interest or claim of any kind
in or to any monies held in the Trust Account or any other asset of the Company as a result of any liquidation of the Company with respect
to the Converted Shares held by it. After giving effect to the Conversion described above, there will be (i) an aggregate of
The Initial Stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of (A) one year after the completion of the Initial Business Combination or (B) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction after the Initial Business Combination that results in all of the Public Stockholders having the right to exchange their shares of common stock for cash, securities or other property (the “Lock-Up”).
Notwithstanding the foregoing, if the last sale
price of the Class A common stock equals or exceeds $
Administrative Services Agreement
The Company entered into an agreement, commencing
on June 13, 2023 through the earlier of consummation of the Initial Business Combination and the Company’s liquidation, to reimburse
an affiliate of the Company’s officers $
In addition, the Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential partner businesses and performing due diligence on suitable Initial Business Combinations. Any such payments prior to an Initial Business Combination will be made using funds held outside the Trust Account.
For the three and nine months ended September
30, 2025, the Company incurred and paid $
Consulting Agreement
The Company entered into an agreement with the
Sponsor, commencing on June 24, 2025. Reference is made to (i) that certain Commitment Letter, dated January 23, 2025, by and between
the Company Sponsor whereby Sponsor agreed to provide advances to the Company, upon the Company’s request and from time to time
as a loan, the lesser of (x) $
The Company acknowledges that (i) the fees payable by the Sponsor (the “Consulting Fees”) to the Consultants (as defined in the Consulting Agreements) under the Consulting Agreements, are being incurred by the Sponsor on behalf of the Company and (ii) the Consulting Fees shall be borne solely by and charged directly to the Company as they relate to work performed on behalf of the Company.
The Company and Sponsor agree that, in lieu of
Sponsor making Advances, Sponsor shall bear all of the cost of the Consulting Fees payable to the Consultants and the Company shall make
the Advances; provided that, in the event that, upon the earlier of the liquidation of the Company or the completion of the Initial Business
Combination of the Company, the Advances paid by the Company in the aggregate equal the lesser of (x) $
The Company deposited $
15
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
Related Party Loans
Promissory Note to Sponsor
On December 17, 2021 and as amended on May 9,
2023, the Sponsor agreed to loan the Company up to $
In connection with the Extension Amendment, the
Company entered into a letter agreement with the Sponsor pursuant to which the Sponsor has agreed to fund up to $
Due from Sponsor
At the closing of the IPO on June 16, 2023, a
portion of the proceeds from the sale of the Private Placement Warrants in the amount of $
As of September 30, 2025 and December 31, 2024,
the Sponsor owes the Company an outstanding amount of
Due to Sponsor
In February 2025 and August 2025, the Sponsor
paid a total of $
On June 24, 2025 the Company entered into a consulting
expense agreement with the Sponsor that, in lieu of the Sponsor making advances for the monthly extensions, Sponsor shall bear all of
the cost of the consulting fees payable to the Consultants for work performed on behalf of the Company. For the three and nine months
ended September 30, 2025, the Company incurred $
On September 26, 2025, the Company issued a promissory
note in the principal amount of $
As of September 30, 2025 and December 31, 2024,
the Company owes the Sponsor an outstanding amount of $
Working Capital Loan
In addition, in order to finance transaction
costs in connection with an Initial Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s
officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).
If the Company completes an Initial Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the
Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust
Account. In the event that an Initial Business Combination does not close, the Company may use a portion of proceeds held outside the
Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital
Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements
exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of an Initial Business Combination,
without interest, or, at the lender’s discretion, up to $
16
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
NOTE 6. COMMITMENTS AND CONTINGENCIES
Registration and Stockholder Rights
The holders of Founder Shares, Private Placement Warrants (and underlying securities) and Private Placement Warrants that may be issued upon conversion of Working Capital Loans (and any underlying securities) are entitled to registration rights pursuant to a registration rights agreement signed at the consummation of the IPO. These holders are entitled to certain demand and “piggyback” registration rights. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
On June 16, 2023, the Company issued to I-Bankers
The Representative Shares have been deemed compensation
by Financial Industry Regulatory Authority (“FINRA”) and were therefore subject to a Lock-Up for a period of
The underwriters were also entitled to an underwriting
discount of $
Initial Business Combination Marketing Agreement
The Company entered into the Marketing Agreement
with the underwriters, I-Bankers and Dawson James to assist the Company in holding meetings with the stockholders to discuss the potential
Initial Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested
in purchasing the Company’s securities in connection with the Initial Business Combination, assist the Company in obtaining stockholder
approval for the Initial Business Combination and assist the Company with its press releases and public filings in connection with the
Initial Business Combination. Pursuant to the Initial Business Combination Marketing Agreement, the Company will pay I-Bankers and Dawson
James, collectively,
Business Combination Agreement
On September 15, 2025, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with The Original Fit Factory, Ltd., a company registered in Scotland with registration number SC541304 (“TOFF”), The Original Fit Factory Holdings Inc., a Delaware corporation (“PubCo”), and The Original Fit Factory Acquisition Inc., a Delaware corporation and a wholly owned subsidiary of PubCo (“Merger Sub”).
Pursuant to the Business Combination Agreement
and subject to the terms and conditions set forth therein, (i) (A) PubCo will issue and deliver to each shareholder of TOFF (a “Seller”)
17
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
Related Agreements
Company Shareholder Commitment Agreement
Simultaneously with the execution of the Business
Combination Agreement, certain of the Sellers who collectively own more than
Sponsor Support Agreement
Simultaneously with the execution of the Business Combination Agreement, the Sponsor entered into a support agreement with the Company and TOFF (the “Sponsor Support Agreement”), pursuant to which the Sponsor agreed, among other things, to vote all of the Founder Shares held by it in favor of (i) the Business Combination Agreement and the Transactions (ii) each other proposal included in the proxy statement for the the Company’s Special Meeting and for which the Company’s board of directors has recommended that the Company’s stockholders vote in favor and against any competing transaction. In addition to the foregoing, the Sponsor Support Agreement prevents transfers of the securities of the Company held by the Sponsor between the date of the Sponsor Support Agreement and its termination, subject to certain limited exceptions.
Lock-Up Agreements
Simultaneously with the execution of the Business Combination Agreement, certain Sellers entered into a lock-up agreement (each, a “Lock-Up Agreement”), pursuant to which each such Seller agreed not to (i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of PubCo Common Stock to be received by such Seller in the Transactions, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such shares of PubCo Common Stock, or (iii) publicly disclose the intention to do any of the foregoing, for a period commencing from the Closing and ending on the date that is six months after the Closing (subject to early release on the earlier upon the date after the Closing on which PubCo consummates a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of its stockholders having the right to exchange their shares of PubCo Common Stock for cash, securities, or other property), subject to certain customary transfer exceptions.
Insider Letter Amendment
Simultaneously with the execution of the Business
Combination Agreement, PubCo, the Company and the Sponsor entered into an Amendment to Letter Agreement (the “Insider Letter Amendment”)
to the Letter Agreement, dated as of June 13, 2023, that was entered into in connection with the Company’s initial public offering
(the “Insider Letter”), (i) to add PubCo as a party to the Insider Letter, and (ii) to revise the terms of the Insider Letter
to reflect the transactions contemplated by the Business Combination Agreement, including the issuance of shares of PubCo Common Stock
and warrants entitling the holder to purchase
18
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
Non-Competition and Non-Solicitation Agreements
Simultaneously with the execution and delivery of the Business Combination Agreement, certain Sellers entered into a Non-Competition and Non-Solicitation Agreement (each, a “Non-Competition Agreement”) in favor of TOFF and PubCo and their respective subsidiaries (the “Covered Parties”), pursuant to which they will agree for a period of two years after the Closing not to compete with the Covered Parties and not to solicit the employees and customers of the Covered Parties. Each Seller also agreed not to disparage the Covered Parties and to customary confidentiality requirements.
Amended and Restated Registration Rights Agreement
Prior to the Closing, PubCo, the Sponsor, the Sellers and the other holders thereunder will enter into an Amended and Restated Registration Rights Agreement (the “Amended and Restated Registration Rights Agreement”) that will amend and restate the Registration Rights Agreement, dated as of June 13, 2023, entered into at the time of the Company’s initial public offering, pursuant to which (i) PubCo will assume the registration obligations of the Company under such registration rights agreement, with such rights applying to the shares PubCo Common Stock and (ii) Sellers will be granted equal registration rights thereunder.
NOTE 7. STOCKHOLDERS’ (DEFICIT) EQUITY
Preferred Stock — The Company
is authorized to issue
Class A Common Stock — The
Company is authorized to issue
Class B Common Stock — The
Company is authorized to issue
On December 2, 2024, the Sponsor elected to convert
Holders of the Class B common stock will have
the right to appoint all of the Company’s directors prior to an Initial Business Combination. On any other matter submitted to a
vote of the Company’s stockholders, holders of the Class A common stock and holders of the Class B common stock will vote together
as a single class, except as required by law or stock exchange rule; provided, that the holders of Class B common stock will be entitled
to vote as a separate class to increase the authorized number of shares of Class B common stock. Each share of common stock will have
The shares of Class B common stock will automatically
convert into shares of the Company’s Class A common stock at the time of the Company’s Initial Business Combination on a one-for-one
basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further
adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess
of the amounts offered and related to the closing of the Initial Business Combination, the ratio at which shares of Class B common stock
shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class
B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class
A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis,
19
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
Rights — At September 30,
2025 and December 31, 2024, there were
Warrants — At September
30, 2025 and December 31, 2024, there were
Each Private Placement Warrant entitles the registered
holder to purchase one share of the Class A common stock at a price of $
The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the Initial Business Combination, the Company will use its reasonable best efforts to file, and within 60 business days after the closing the Initial Business Combination, to have declared effective, a registration statement relating to the shares of Class A common stock issuable upon exercise of the Private Placement Warrants and to maintain the effectiveness of such registration statement, and a current Prospectus relating to those shares of Class A common stock until the Private Placement Warrants expire. Notwithstanding the above, if the Company’s shares of Class A 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 a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of the Private Placement Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, but the Company will be required to use its best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants. Once the Private Placement Warrants become exercisable, the Company may redeem the outstanding warrants:
| ● | in whole and not in part; |
| ● | at
a price of $ |
| ● | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
| ● | if,
and only if, the last reported sale price of the Class A common stock equals or exceeds $ |
20
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
The Company may not redeem the Private Placement
Warrants when a holder may not exercise such warrants. The Company has established the last of the redemption criterion discussed above
to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing
conditions are satisfied and the Company issues a notice of redemption of the Private Placement Warrants, each warrant holder will be
entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A common stock may
fall below the $
If the Company calls the Private Placement Warrants for redemption as described above, management will have the option to require any holder that wishes to exercise their warrant to do so on a “cashless basis”. In determining whether to require all holders to exercise their Private Placement Warrants on a “cashless basis,” the Company will consider, among other factors, the cash position, the number of Private Placement Warrants that are outstanding and the dilutive effect on the stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of the Private Placement Warrants. If the Company takes advantage of this option, all holders of the Private Placement Warrants would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class A 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 warrants.
NOTE 8. FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
At September 30, 2025 and December 31, 2024, assets
held in the Trust Account were comprised of $
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at September 30, 2025 and December 31, 2024 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| September 30, | December 31, | |||||||||
| Description | Level | 2025 | 2024 | |||||||
| Assets: | ||||||||||
| Investments held in Trust Account – U.S. Treasury Securities Money Market Fund | 1 | $ | $ | |||||||
21
ESH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(UNAUDITED)
NOTE 9. SEGMENT INFORMATION
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance.
The CODM assesses performance for the single segment
and decides how to allocate resources based on net income or loss that also is reported on the condensed statements of operations as net
income or loss. The measure of segment assets is reported on the condensed balance sheets as total assets.
| September 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| Cash | $ | $ | ||||||
| Investments held in Trust Account | $ | $ | ||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| General and administrative expenses | $ | $ | $ | $ | ||||||||||||
| Interest earned on investments held in Trust Account | $ | $ | $ | $ | ||||||||||||
The CODM reviews interest earned on investments held in Trust Account to measure and monitor stockholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the trust agreement. General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination within the business combination period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.
General and administrative costs, as reported on the condensed statements of operations, are the significant segment expenses provided to the CODM on a regular basis. All other segment items included in net income are reported on the condensed statements of operations and described within their respective disclosures.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date up to the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements, except as described below.
On October 29, 2025, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) approving the Company’s application to list its Class A Common Stock (“Class A Shares”) and Rights on The Nasdaq Capital Market. The Company’s securities began trading on The Nasdaq Capital Market at the opening of business on October 31, 2025, under the Company’s trading symbol, ESHA. The Company’s transfer to The Nasdaq Capital Market does not affect the registration of its securities under the Securities Exchange Act of 1934, as amended (the “Act”), and the Company will remain subject to the periodic reporting requirements of the Act.
22
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to ESH Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to ESH Sponsor LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of the Initial Business Combination (as defined below), the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of the Initial Business Combination are not satisfied. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company formed under the laws of the State of Delaware on November 17, 2021 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities. We intend to effectuate the Initial Business Combination using cash from the proceeds of the IPO and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete an Initial Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from November 17, 2021 (inception) through September 30, 2025 were organizational activities, those necessary to prepare for the IPO, described below, and identifying a target company for the Initial Business Combination. We do not expect to generate any operating revenues until after the completion of the Initial Business Combination. We generate non-operating income in the form of interest income on investments held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended September 30, 2025, we had a net loss of $802,475, which consists of operating costs of $852,868, franchise tax expense of $24,200 and provision for income taxes of $13,395, offset by interest income on investments held in the Trust Account of $87,963 and interest income – bank of $25.
For the three months ended September 30, 2024, we had a net income of $1,059,413, which consists of interest income on investments held in the Trust Account of $1,588,812, offset by operating costs of $156,771, provision for income taxes of $322,628, and franchise tax expense of $50,000.
For the nine months ended September 30, 2025, 2025, we had a net loss of $2,081,973, which consists of operating costs of $2,228,110, franchise tax expense of $75,600 and provision for income taxes of $38,945, offset by interest income on investments held in the Trust Account of $260,657 and interest income – bank of $25.
For the nine months ended September 30, 2024, we had a net income of $3,218,561, which consists of interest income on investments held in the Trust Account of $4,724,702, offset by operating costs of $550,758, provision for income taxes of $804,765, and franchise tax expense of $150,618.
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Factors That May Adversely Affect our Results of Operations
Our results of operations and our ability to complete an Initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our results of operations and our ability to consummate an Initial Business Combination could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. We cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an Initial Business Combination.
Liquidity, Capital Resources and Going Concern
On June 16, 2023, we consummated the IPO of 11,500,000 Units at $10.00 per Unit, which includes the full exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at $10.00 per Unit, generating gross proceeds of $115,000,000. Simultaneously with the closing of the IPO, we consummated the sale of 7,470,000 Private Placement Warrants at a price of $1.00 per warrant, in a private placement to the Sponsor and I-Bankers Securities, Inc. and Dawson James, generating gross proceeds of $7,470,000.
Following the IPO, the full exercise of the over-allotment option, and the sale of the Private Placement Warrants, a total of $116,725,000 ($10.15 per Unit) was placed in the Trust Account. We incurred $5,368,092 in IPO related costs, consisting of $2,300,000 of cash underwriting discount, $2,239,466 fair value of Representative Shares, and $828,626 of other offering costs.
For the nine months ended September 30, 2025, cash used in operating activities was $1,604,804. Net loss of $2,081,973 was affected by interest earned on investments held in the Trust Account of $260,657. Changes in operating assets and liabilities provided $737,826 of cash for operating activities.
For the nine months ended September 30, 2024, cash used in operating activities was $1,183,275. Net income of $3,218,561 was affected by interest earned on investments held in the Trust Account of $4,724,702. Changes in operating assets and liabilities provided $322,866 of cash for operating activities.
As of September 30, 2025, we had investments held in the Trust Account of $8,548,921 (including $739,129 of interest income) consisting of U.S. Treasury securities. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through September 30, 2025, we have withdrawn $2,263,200 interest earned from the Trust Account of which all of the amounts withdrawn was used to pay taxes.
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete the Initial Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete the Initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of September 30, 2025, we had cash of $135,578 and restricted cash of $409. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete the Initial Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with the Initial Business Combination, the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete the Initial Business Combination, we would repay such loaned amounts. In the event that the Initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants.
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In connection with the Extension Amendment, we entered into a letter agreement with our Sponsor pursuant to which our Sponsor has agreed to fund up to $360,000 in extension loans prior to the earlier of December 16, 2025 and the closing of an Initial Business Combination. Each one month extension is subject to our Sponsor, or its designee, depositing the lesser of (x) $0.05 per public share that remains outstanding (and was not redeemed in connection with the 2024 Redemption) and (y) $30,000 into the Trust Account (the “Extension Payments”). Each deposit of the Extension Fee is evidenced by an unsecured promissory note (each an “Extension Promissory Note”). The Extension Promissory Notes bear no interest and are payable in full on the date on we consummate an Initial Business Combination (such date, the “Maturity Date”). The following shall constitute an event of default: (i) a failure to pay the principal within five business days of the Maturity Date; and (ii) the commencement of a voluntary or involuntary bankruptcy action, in which case the Extension Promissory Notes may be accelerated. As of September 30, 2025 and December 31, 2024, the Sponsor has not made any deposit into the Trust Account. The Company deposited $300,000 from the Company’s operating account into the Trust Account as extension deposit from December 2024 to September 2025.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating the Initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to the Initial Business Combination. Moreover, we may need to obtain additional financing either to complete the Initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of the Initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Initial Business Combination.
We have determined that the Company’s liquidity condition and mandatory liquidation, should the Initial Business Combination not occur by December 16, 2025, and potential subsequent dissolution, raise substantial doubt about our ability to continue as a going concern for a reasonable period of time which is considered to be one year from the date of the issuance of the unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of one of our officers a monthly fee of $5,000 for office space, utilities, secretarial support and other administrative and consulting services. We began incurring these fees on June 13, 2023 and will continue to incur these fees monthly until the earlier of the completion of the Initial Business Combination and our liquidation.
In addition, the Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential partner businesses and performing due diligence on suitable Initial Business Combinations. Any such payments prior to an Initial Business Combination will be made using funds held outside the Trust Account.
The underwriters were entitled to an underwriting discount of $0.20 per unit, or $2.3 million in the aggregate, which was paid upon the closing of the IPO.
We entered into an Initial Business Combination marketing agreement (the “Marketing Agreement”) with the underwriters, I-Bankers and Dawson James, to assist us in holding meetings with the stockholders to discuss the potential Initial Business Combination and the target business’ attributes, introduce us to potential investors that are interested in purchasing our securities in connection with the Initial Business Combination, assist us in obtaining stockholder approval for the Initial Business Combination and assist us with its press releases and public filings in connection with the Initial Business Combination. Pursuant to the Marketing Agreement, we will pay I-Bankers and Dawson James, collectively, 3.5% of the gross proceeds of the IPO, or $4.03 million in the aggregate (the “Marketing Fee”). The Marketing Fee will become payable to I-Bankers and Dawson James from the amounts held in the Trust Account solely in the event that we complete an Initial Business Combination with a target introduced to us by I-Bankers.
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Critical Accounting Policies and Estimates
The preparation of unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements, and income and expenses during the periods reported. Making estimates requires management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could materially differ from those estimates. As of September 30, 2025, we have not identified any critical accounting policies, while we have identified a critical accounting estimate below:
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified in temporary equity. At all other times, common stock is classified as stockholders’ equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2025 and December 31, 2024, 739,881 shares of Class A common stock, respectively, are presented at redemption value as temporary equity, outside of the stockholders’ equity section of our unaudited condensed balance sheets. As of September 30, 2025 and December 31, 2024, Class A common stock subject to possible redemption amounts to $8,553,227 and $8,147,290, respectively.
Recent Accounting Standards
In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter of 2025 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our Annual Report on Form 10-K filed with the SEC. As of the date of this Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC, with the exception of those discussed below. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
There is no assurance when or if our Initial Business Combination with TOFF pursuant to the Business Combination Agreement will be completed.
Completion of our Initial Business Combination with TOFF pursuant to the Business Combination Agreement is subject to the satisfaction or waiver of a number of conditions as set forth in the Business Combination Agreement, including shareholder approvals, a minimum cash condition, a proceeds condition and other closing conditions. There can be no assurance that the conditions to completion of our Initial Business Combination will be satisfied or waived. In addition, each of the Company and TOFF may unilaterally terminate the Business Combination Agreement under certain circumstances set forth in the Business Combination Agreement, and the Company and TOFF may agree at any time to terminate the Business Combination Agreement. Furthermore, significant redemptions by public shareholders would increase the likelihood that our Initial Business Combination would not be consummated. Our ability to issue equity or obtain financing in connection with our Initial Business Combination or in the future is also uncertain.
The announcement and pendency of our Initial Business Combination could have an adverse effect on the Company’s results of operations, financial condition, cash flows or the market value of the Company’s securities.
Uncertainty about the effect of our Initial Business Combination with TOFF may have an adverse effect on the Company or the combined company following such combination. Uncertainties about our Initial Business Combination with TOFF may also cause a loss of key management personnel. Until closing of our Initial Business Combination with TOFF, the Company is also prohibited from entering into certain transactions that might otherwise be beneficial to the Company or its shareholders. Further, our Initial Business Combination with TOFF may give rise to potential liabilities, including as a result of pending and future shareholder lawsuits relating to such combination. In addition, the Company has incurred, and expects to incur additional, material non-recurring expenses in connection with our Initial Business Combination with TOFF and consummation of the transactions contemplated by the Business Combination Agreement. Any of these matters could harm the results of operations, financial condition or cash flows of the Company and the market value of the Company’s securities.
The risks related to the Business Combination will be described in more detail in the registration statement that PubCo intends to file with the SEC (the “Registration Statement”) that will include a prospectus with respect to PubCo’s securities to be issued in connection with our Initial Business Combination with TOFF and a proxy statement with respect to the shareholder meeting of the Company to vote on such combination. Shareholders of the Company and other interested persons are encouraged to read, when available, the preliminary proxy statement/prospectus as well as other documents to be filed with the SEC in connection with our Initial Business Combination with TOFF because these documents will contain important information.
Changes in international trade policies, tariffs and treaties affecting imports and exports may have a material adverse effect on our search for an Initial Business Combination target, including our Initial Business Combination with TOFF, or the performance or business prospects of a post-Initial Business Combination company.
There have recently been significant changes to international trade policies and tariffs affecting imports and exports. Any significant increases in tariffs on goods or materials or other changes in trade policy could negatively affect our search for a target and/or our ability to complete our Initial Business Combination, including our Initial Business Combination with TOFF.
Recently, the United States has implemented a range of new tariffs and increases to existing tariffs. In response to the tariffs announced by the United States, other countries have imposed, are considering imposing, and may in the future impose new or increased tariffs on certain exports from the United States. There is currently significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations and tariffs, and we cannot predict whether, and to what extent, current tariffs will continue or trade policies will change in the future.
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Tariffs, or the threat of tariffs or increased tariffs, could have a significant negative impact on certain businesses (either due to domestic businesses’ reliance on imported goods or dependence on access to foreign markets, or foreign businesses’ reliance on sales into the United States), including the business of PubCo. In addition, retaliatory tariffs could have a significant negative impact on foreign businesses that rely on imports from the United States, and domestic businesses that rely on exporting goods internationally. These tariffs and threats of tariffs and other potential trade policy changes could negatively affect the attractiveness of certain Initial Business Combination targets, or lead to material adverse effects on a post-Initial Business Combination company. Among other things, historical financial performance of companies affected by trade policies and/or tariffs may not provide useful guidance as to the future performance of such companies, because future financial performance of those companies may be materially affected by new United States tariffs or foreign retaliatory tariffs, or other changes to trade policies. The business prospects of a particular target for an Initial Business Combination, including our Initial Business Combination with TOFF, could change even though we have entered into the Business Combination Agreement, as a result of tariffs or the threat of tariffs that may have a material impact on PubCo’s business.
We may not be able to adequately address the risks presented by these tariffs or other potential trade policy changes. As a result, we may deem it costly, impractical or risky to complete an Initial Business Combination with a particular target or with a target in a particular industry or from a particular country. Consequently, the pool of potential target companies may be reduced, which could impair our ability to identify a suitable target and to complete an initial Business Combination. If we complete an initial Business Combination with such a target, including our Initial Business Combination with TOFF, the post-Initial Business Combination company’s operations and financial results could be adversely affected as a result of tariffs or changes to trade policies, which may cause the market value of the securities of the post-Initial Business Combination company to decline.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On June 16, 2023, we consummated the Initial Public Offering of 11,500,000 Units, which includes the full exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at $10.00 per Unit, generating total gross proceeds of $115,000,000. I-Bankers Securities, Inc and IB Capital LLC acted as joint book-running managers, with Dawson James Securities, Inc. acting as co-manager of the Initial Public Offering. The securities in the offering were registered under the Securities Act on registration statement on Form S-1 (No. 333-265226). The Securities and Exchange Commission declared the registration statements effective on June 13, 2023.
Simultaneous with the consummation of the Initial Public Offering, the Sponsor, I-Bankers Securities, Inc. and Dawson James, consummated the private placement warrants of an aggregate of 7,470,000 warrants at a price of $1.00 per warrant, generating total proceeds of $7,470,000. Each Unit consists of one share of Class A common stock and one right. Each whole Private Placement Warrant is exercisable for one whole share of Class A common stock at a price of $11.50 per share. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Of the gross proceeds received from the Initial Public Offering, the full exercise of the over-allotment option and the Private Placement Warrants, an aggregate of $116,725,000 was placed in the Trust Account.
We incurred transaction costs amounting to $5,368,092 consisting of $2,300,000 of cash underwriting discount, $2,239,466 fair value of representative shares, and $828,626 of other offering costs.
For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
None
Item 5. Other Information
During the three and nine months ended September
30, 2025, no director or Section 16 officer
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith. |
| (1) | Previously filed as an exhibit to our Current Report on Form 8-K filed on September 19, 2025 and incorporated by reference herein. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ESH Acquisition Corp. | ||
| Date: November 17, 2025 | By: | /s/ James Francis |
| Name: | James Francis | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: November 17, 2025 | By: | /s/ Jonathan Morris |
| Name: | Jonathan Morris | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
31
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, James Francis, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of ESH Acquisition Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and |
| b) | (Paragraph omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a); |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 17, 2025
| /s/ James Francis | |
| James Francis | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Jonathan Morris, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of ESH Acquisition Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and |
| b) | (Paragraph omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a); |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 17, 2025
| /s/ Jonathan Morris | |
| Jonathan Morris | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of ESH Acquisition Corp. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2025, as filed with the Securities and Exchange Commission (the “Report”), I, James Francis, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: November 17, 2025
| /s/ James Francis | |
| James Francis | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of ESH Acquisition Corp. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2025, as filed with the Securities and Exchange Commission (the “Report”), I, Jonathan Morris, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: November 17, 2025
| /s/ Jonathan Morris | |
| Jonathan Morris | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |