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SHAREHOLDERS’ DEFICIT
 3 Months Ended
Mar. 31, 2025
Equity [Abstract]  
SHAREHOLDERS’ DEFICIT

NOTE 11. SHAREHOLDERS’ DEFICIT

 

Preference Shares—The Company is authorized to issue 10,000,000 preference shares with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Board. At March 31, 2025 and December 31, 2024, there were no preference shares issued or outstanding.

 

Class A Common Stock— The Company is authorized to issue 490,000,000 Class A common stock with a par value of $0.0001 per share. As of March 31, 2025 and December 31, 2024, there were 48,900,970 and 27,601,767 Class A common stock issued and outstanding, respectively.

 

PowerUp Warrants

 

As part of the PowerUp initial public offering (“IPO”), PowerUp issued warrants to third-party investors where each whole warrant entitles the holder to purchase one share of the Company’s Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the closing of the IPO, PowerUp completed the private sale of 9,763,333 Private Placement warrants where each warrant allows the holder to purchase one share of the Company’s Class A common stock at $11.50 per share. At March 31, 2025, there are 14,374,969 Public Warrants and 9,763,333 Private Placement warrants outstanding.

 

The Public Warrants will become exercisable commencing 30 days after the consummation of the Business Combination.

 

Once the warrants become exercisable, the Company may redeem the warrants:

 

  ● in whole and not in part;
  ● at a price of $0.01 per warrant;
  ● upon not less than 30 days’ prior written notice of redemption, to each warrant holder; and
  ● if, and only if, the reported last sale price of the Public Shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders.

 

 

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the IPO, except that the Private Placement Warrants and the common stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable, or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.

 

The Company has determined that warrants issued in connection with its IPO in February 2022 are subject to treatment as equity. Upon the closing of the Business Combination, in accordance with the guidance contained in ASC 815 , the warrants continue to be equity classified.

 

Stock based compensation

 

On February 29, 2024, Aspire Biopharma, Inc entered Corporate advisory agreement with an advisory firm, pursuant to which the advisory firm will receive 6% of the amount shares outstanding after the close of the Business Combination as compensation for advisory services to support the Company’s efforts related to the Business Combination. On January 3, 2025, the agreed upon compensation was reduced to 4.75% of the amount of shares outstanding after the close of the Business Combination. In February 2025, 1,662,500 shares of the 35,000,000 Business Combination shares were issued to the affiliated company under this agreement. The issuance of these shares to the service advisors is subject to ASC 718. Under ASC 718, compensation associated with equity-classified awards is measured at fair value upon the grant date. The shares were granted subject to a performance condition (i.e., the occurrence of a Business Combination). Stock-based compensation of $14,131,250 was recognized in general and administrative expenses upon consummation of the Business Combination in February 2025 based on the grant date fair value per share. The fair value was determined by applying a 15% discount for lack of marketability to the market price of the share on date of grant.

 

Aspire Biopharma warrants

 

During the years ended December 31, 2024 and December 31, 2023, on a post-split basis, Aspire Biopharma, Inc issued 44,000,000 at a per share price of $0.40 and 7,500,000 warrants at an average per share price of $0.13, respectively. As of December 31, 2024 all warrants issued were fully vested. As of December 31, 2024, there were 91,500,000 warrants outstanding. On January 21, 2025 the 91,500,000 warrants were converted into 91,500,000 shares of Aspire Biopharma Inc. common stock, which, on the Business Combination date, were subsequently converted into 5,735,717 Class A common stock of the Company.