HCM II Acquisition Corp.(HOND) - 2024 Q3 - Quarterly Report

Part I. Financial Information Interim Financial Statements HCM II Acquisition Corp.'s interim financial statements as of September 30, 2024, detail its financial position as a blank check company, showing $233.6 million in assets and a $10.0 million accumulated deficit Condensed Balance Sheet As of September 30, 2024, total assets were $233.6 million, primarily trust account securities, with a $10.0 million shareholders' deficit Condensed Balance Sheet as of September 30, 2024 (Unaudited) | Category | Amount (USD) | | :--- | :--- | | Assets | | | Total Current Assets | $1,017,503 | | Marketable securities held in Trust Account | $232,499,715 | | Total Assets | $233,592,426 | | Liabilities & Shareholders' Deficit | | | Total Current Liabilities | $374,882 | | Deferred underwriting fee | $10,720,000 | | Total Liabilities | $11,094,882 | | Class A ordinary shares subject to possible redemption | $232,499,715 | | Total Shareholders' Deficit | ($10,002,171) | Condensed Statements of Operations Net income for Q3 2024 was $1.07 million, driven by interest on trust account securities, resulting in $1.02 million cumulative net income since inception Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended Sep 30, 2024 (USD) | Period from Apr 4, 2024 (Inception) to Sep 30, 2024 (USD) | | :--- | :--- | :--- | | General and administrative costs | $278,494 | $331,157 | | Loss from operations | ($278,494) | ($331,157) | | Interest earned on marketable securities | $1,349,715 | $1,349,715 | | Net Income | $1,071,221 | $1,018,558 | | Basic and diluted net income per share | $0.07 | $0.09 | Condensed Statement of Changes in Shareholder's Deficit Shareholder's deficit increased to $10.0 million by September 30, 2024, primarily due to an $18.4 million accretion of Class A ordinary shares - The primary driver of the increased deficit was the accretion of Class A ordinary shares to their redemption amount, totaling $18,369,812[9] - The company recorded proceeds of $6.85 million from the sale of Private Placement Warrants and recognized a fair value of $529,000 for Public Warrants at issuance[9] Condensed Statement of Cash Flows Cash increased to $825,134 from inception to September 30, 2024, driven by $232.3 million in financing activities offset by $231.2 million in investing activities Cash Flow Summary (Inception to Sep 30, 2024) | Activity | Net Cash Flow (USD) | | :--- | :--- | | Net cash used in operating activities | ($294,130) | | Net cash used in investing activities | ($231,150,000) | | Net cash provided by financing activities | $232,269,264 | | Net Change in Cash | $825,134 | Notes to Condensed Financial Statements (Unaudited) The notes provide detailed context to the financial statements, including the company's SPAC formation, August 2024 IPO, going concern uncertainty, related-party transactions, and warrant terms - The company is a blank check company formed on April 4, 2024, to effect a Business Combination and has not yet selected a target[12] - On August 19, 2024, the company consummated its IPO of 23,000,000 units at $10.00 per unit, generating gross proceeds of $230 million[14] - Management has determined a going concern uncertainty exists as the company must consummate a Business Combination by August 19, 2026, or face mandatory liquidation[29] - On October 10, 2024, the company announced that holders of its units could separately trade the included Class A ordinary shares and warrants under the symbols 'HOND' and 'HONDW', respectively[83] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's status as a blank check company, its $1.07 million net income from interest, and its liquidity of $825,134 cash and $232.5 million in trust - The company is a blank check company formed to effect a business combination and has not generated any operating revenues to date[87][89] Results of Operations Summary | Period | Net Income (USD) | Key Driver | | :--- | :--- | :--- | | Q3 2024 | $1,071,221 | Interest income of $1,349,715 offset by operating costs | | Inception to Sep 30, 2024 | $1,018,558 | Interest income of $1,349,715 offset by operating costs | - As of September 30, 2024, the company had $825,134 in cash available for working capital and $232,499,715 in marketable securities held in the trust account[97][98] - The Sponsor may provide up to $1.5 million in Working Capital Loans, convertible into private placement warrants at $1.00 per warrant upon a business combination[99] Quantitative and Qualitative Disclosures About Market Risk This disclosure is not required for smaller reporting companies, and therefore no information is provided - The company is a smaller reporting company and is not required to provide this disclosure[105] Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal controls - Based on an evaluation, the Certifying Officers concluded that the company's disclosure controls and procedures were effective as of September 30, 2024[106] - No changes in internal control over financial reporting occurred during the fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[107] Part II. Other Information Legal Proceedings The company reports that there are no legal proceedings - None[109] Risk Factors No material changes have occurred to the risk factors previously disclosed in the company's final IPO prospectus - No material changes have occurred to the risk factors disclosed in the company's final IPO prospectus[109] Unregistered Sales of Equity Securities and Use of Proceeds This section details the $230 million IPO proceeds and $6.85 million from private warrant sales, with $231.15 million placed in trust - The IPO of 23,000,000 units generated gross proceeds of $230,000,000[110] - A private placement of 6,850,000 warrants at $1.00 each generated gross proceeds of $6,850,000[111] - Total offering costs amounted to $15,396,014, including a $4,000,000 cash underwriting fee and a $10,720,000 deferred underwriting fee[112] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[113] Mine Safety Disclosures The company reports no mine safety disclosures - None[113] Other Information The company reports no other information - None[113] Exhibits This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including various agreements and certifications - The report includes several exhibits, such as the Underwriting Agreement, Amended and Restated Memorandum and Articles of Association, and CEO/CFO certifications[115] Part III. Signatures