IPO and Financial Proceeds - The company completed its Initial Public Offering (IPO) on August 19, 2024, raising gross proceeds of $230,000,000 from the sale of 23,000,000 units at $10.00 per unit[28]. - An additional $6,850,000 was generated from the sale of 6,850,000 Private Placement Warrants at $1.00 each, bringing total gross proceeds to $236,850,000[29]. - A total of $231,150,000 from the net proceeds was placed in a trust account, with an initial value of $10.05 per unit[30]. - Transaction costs related to the IPO amounted to $15,396,014, which included $4,000,000 in underwriting fees and $10,720,000 in deferred underwriting fees[41]. - The company has not generated any revenues to date and expects to incur significant costs in pursuit of its acquisition plans[143][144]. Business Combination Plans - The company must complete a business combination with a fair market value of at least 80% of the assets held in the trust account[42]. - The company anticipates structuring its initial business combination to acquire 100% of the equity interests or assets of the target business, but may also acquire less than 100% under certain conditions[51]. - The company is focused on identifying a target business for a merger or acquisition, with an emphasis on established businesses poised for growth[24]. - The management team emphasizes the importance of quality management in target businesses to ensure efficient scaling and sustained growth[32]. - The company has entered into a Business Combination Agreement with Terrestrial Energy Inc., with the merger expected to close in Q4 2025, subject to shareholder approvals[145][146]. Shareholder Rights and Redemption - The company will provide stockholders the opportunity to redeem shares for a pro rata portion of the trust account, initially valued at $10.05 per share[43]. - Public shareholders will have the opportunity to redeem their shares for cash upon completion of the initial business combination, regardless of their voting decision[82]. - A public stockholder is restricted from seeking redemption rights for more than 10% of the shares sold in the Initial Public Offering, referred to as "Excess Shares"[88]. - Shareholders are restricted from seeking redemption rights for Excess Shares without prior consent, limiting the ability of large shareholders to block the business combination[94]. - The company plans to redeem Public Shares at a per-share price equal to the aggregate amount in the trust account, estimated at approximately $10.05 per share[108]. Financial Management and Risks - The company has not secured third-party financing for its initial business combination, and there is no assurance that such financing will be available[69]. - If the cash consideration required exceeds the available cash, the initial business combination will not be completed, and shares submitted for redemption will be returned[93]. - The company may face significant risks, including the inability to complete its initial business combination and potential dilution of public shareholders' investments[124]. - If the net proceeds from the Initial Public Offering are insufficient, the company may depend on loans from its Sponsor or affiliates to fund its search for a target business[125]. - The company expects to have access to approximately $1,150,000 from the Initial Public Offering proceeds to cover potential claims and liquidation costs[111]. Management and Governance - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements, which may affect the attractiveness of its securities[66]. - The management team has developed a broad network of contacts and corporate relationships, which is expected to provide a substantial number of potential initial business combination targets[58]. - The board of directors consists of five members, with three independent directors, ensuring compliance with Nasdaq rules[190]. - The audit committee is composed solely of independent directors, including Jacob Loveless, ensuring financial oversight and compliance with SEC rules[192]. - The company has adopted a code of ethics applicable to all directors, officers, and employees, ensuring adherence to ethical standards[199]. Operational Status and Future Outlook - The company has not commenced any operations as of December 31, 2024, and will not generate operating revenues until after completing its initial business combination[38]. - The company has until August 19, 2026, to complete the initial Business Combination, or it will face automatic winding up and liquidation[160]. - Management plans to address liquidity concerns through a Business Combination, with substantial doubt raised about the ability to continue as a going concern if not completed[162]. - The company has no off-balance sheet financing arrangements or long-term liabilities, except for a monthly payment of $15,000 to the Sponsor[163][164]. - The company may face adverse effects on its business due to economic uncertainties, including geopolitical instability and inflation[152].
HCM II Acquisition Corp.(HONDU) - 2024 Q4 - Annual Report