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Ares Acquisition II(AACT) - 2023 Q1 - Quarterly Report

Financial Position - As of March 31, 2023, total assets amounted to 842,780,asignificantincreasefrom842,780, a significant increase from 512,595 as of December 31, 2022, reflecting a growth of approximately 64.3%[8] - Total liabilities increased to 834,119asofMarch31,2023,upfrom834,119 as of March 31, 2023, up from 503,634 as of December 31, 2022, representing a rise of about 65.5%[8] - The total shareholder's equity decreased to 8,661asofMarch31,2023,downfrom8,661 as of March 31, 2023, down from 8,961 as of December 31, 2022, reflecting a decline of about 3.3%[8] - As of March 31, 2023, the Company had no cash equivalents and did not hold cash in any financial institution accounts[46][54] - The Company has no long-term debt obligations or off-balance sheet arrangements as of the reporting date[95] Operating Performance - The company reported a net loss of 300forthethreemonthsendedMarch31,2023,comparedtoanetlossof300 for the three months ended March 31, 2023, compared to a net loss of 1,751 for the same period in 2022, indicating a reduction in losses by approximately 82.9%[12] - The Company incurred formation costs of 300forthethreemonthsendedMarch31,2023,comparedto300 for the three months ended March 31, 2023, compared to 1,751 for the same period in 2022, showing a decrease of approximately 82.9%[12] - The company reported no cash flows from operating activities for the three months ended March 31, 2023, consistent with the previous year[21] - The company had a net loss of 300forthethreemonthsendedMarch31,2023,comparedtoanetlossof300 for the three months ended March 31, 2023, compared to a net loss of 1,751 for the same period in 2022, primarily due to formation costs[91] Initial Public Offering (IPO) - The Initial Public Offering (IPO) was completed on April 25, 2023, raising gross proceeds of 500,000,000fromthesaleof50,000,000unitsat500,000,000 from the sale of 50,000,000 units at 10.00 per unit, with offering costs amounting to 28,452,534[26]TheCompanycompleteditsInitialPublicOfferingonApril25,2023,raisinggrossproceedsof28,452,534[26] - The Company completed its Initial Public Offering on April 25, 2023, raising gross proceeds of 500,000,000 from the sale of 50,000,000 Units at 10.00perUnit,incurringofferingcostsof10.00 per Unit, incurring offering costs of 28,452,534[58] - The Company sold an additional 14,300,000 Private Placement Warrants for 14,300,000simultaneouslywiththeIPO[27]TheCompanyissued14,300,000PrivatePlacementWarrantsatapriceof14,300,000 simultaneously with the IPO[27] - The Company issued 14,300,000 Private Placement Warrants at a price of 11.50 per share, generating 14,300,000inproceeds,whichwereaddedtotheTrustAccount[71]TrustAccountandBusinessCombinationAtotalof14,300,000 in proceeds, which were added to the Trust Account[71] Trust Account and Business Combination - A total of 505,000,000 was placed in a Trust Account, invested solely in U.S. government securities, with a per unit value of 10.10[28]TheCompanymustcompleteaBusinessCombinationwithtargetbusinesseshavingafairmarketvalueofatleast8010.10[28] - The Company must complete a Business Combination with target businesses having a fair market value of at least 80% of the Trust Account assets[29] - Public shareholders can redeem their shares for a pro rata portion of the Trust Account, initially valued at 10.10 per share[31] - The Company has until April 25, 2025, to complete a Business Combination, after which it will redeem Public Shares at the amount in the Trust Account[34] - The Sponsor has agreed to waive its liquidation rights regarding Founder Shares if the Company fails to complete a Business Combination within the Combination Period[35] Management and Operations - The Company has approximately 3,400,000initsoperatingbankaccountimmediatelyaftertheIPOtocoverliquidityneeds[38]ManagementbelievesthattheCompanywillhavesufficientworkingcapitalandborrowingcapacitytomeetitsneedsthroughtheearlieroftheconsummationofaBusinessCombinationoroneyearfromthefilingdate[39]TheCompanyexpectstoincursignificantcostsrelatedtobeingapubliccompanyandpursuinginitialbusinesscombinations,withnooperatingrevenuesanticipateduntilaftersuchcombinationsarecompleted[90]ShareholderInformationThecompanyhad50,000,000ClassAordinarysharesand12,937,500ClassBordinarysharesissuedandoutstandingasofMay30,2023[3]Theweightedaveragesharesoutstandingremainedconstantat11,250,000forboththethreemonthsendedMarch31,2023,and2022[12]Theweightedaveragenumberofordinarysharesoutstandingwasadjustedfor1,687,500ClassBordinarysharessubjecttoforfeiture,resultinginanetlossperordinarysharecalculation[53]TheSponsorholds12,937,500FounderShares,representing203,400,000 in its operating bank account immediately after the IPO to cover liquidity needs[38] - Management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from the filing date[39] - The Company expects to incur significant costs related to being a public company and pursuing initial business combinations, with no operating revenues anticipated until after such combinations are completed[90] Shareholder Information - The company had 50,000,000 Class A ordinary shares and 12,937,500 Class B ordinary shares issued and outstanding as of May 30, 2023[3] - The weighted average shares outstanding remained constant at 11,250,000 for both the three months ended March 31, 2023, and 2022[12] - The weighted average number of ordinary shares outstanding was adjusted for 1,687,500 Class B ordinary shares subject to forfeiture, resulting in a net loss per ordinary share calculation[53] - The Sponsor holds 12,937,500 Founder Shares, representing 20% of the outstanding shares upon completion of the offering[67] - The Company increased its authorized share capital to 9,000,000,000 Class A ordinary shares and 900,000,000 Class B ordinary shares as of April 20, 2023[86] Legal and Compliance - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of new accounting standards[102] - There were no changes in internal control over financial reporting that materially affected the company's financial reporting during the most recent fiscal quarter[107] - The company is not currently subject to any material legal proceedings, nor are any material legal proceedings threatened against it[108] - The company has not experienced any material changes in risk factors since its Initial Public Offering on April 25, 2023[109] Costs and Fees - The Company incurred 17,500,000 in deferred underwriting commissions as part of the offering costs related to the Initial Public Offering[58] - The underwriters received a cash underwriting discount of 0.20perUnit,totaling0.20 per Unit, totaling 10,000,000, and will receive deferred underwriting commissions of 17,500,000,payableonlyiftheCompanycompletesaBusinessCombination[79]TheCompanyhasagreedtopayamonthlyAdministrativeServiceFeeof17,500,000, payable only if the Company completes a Business Combination[79] - The Company has agreed to pay a monthly Administrative Service Fee of 16,667 to the Sponsor for office space and administrative services, effective April 20, 2023[74] - Ares Management Capital Markets LLC received an advisory fee of 2,000,000upontheclosingoftheInitialPublicOfferingandwillreceiveadeferredfeeof2,000,000 upon the closing of the Initial Public Offering and will receive a deferred fee of 3,500,000 contingent on completing the initial Business Combination[75] Accounting and Estimates - The company has identified critical accounting estimates that may affect reported amounts of assets and liabilities, emphasizing the potential for actual results to differ from estimates[98] - The company has no unrecognized tax benefits or accrued interest and penalties related to tax positions as of March 31, 2023[51] - The funds in the Trust Account will be comprised entirely of U.S. government securities with maturities of 185 days or less or money market funds meeting certain conditions[110]