cord Acquisition II(CNDA) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and related disclosures for Concord Acquisition Corp II, highlighting its financial position, operational results, and significant risks Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements for Concord Acquisition Corp II for the quarterly period ended March 31, 2025, including balance sheets, statements of operations, changes in stockholders' deficit, and cash flows, along with detailed notes Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2025, shows a dramatic decrease in total assets to $550,477 from $24.7 million at year-end 2024, primarily driven by a reduction in cash held in the Trust Account due to shareholder redemptions Condensed Consolidated Balance Sheet Highlights | Account | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | $134,681 | $537,970 | | Cash held in Trust Account | $97,122 | $23,791,131 | | Total Assets | $550,477 | $24,653,974 | | Liabilities & Stockholders' Deficit | | | | Total Current Liabilities | $5,471,895 | $5,211,001 | | Warrant liability | $2,210,487 | $736,829 | | Capital Contribution Note, at fair value | $2,691,710 | $3,535,612 | | Total Liabilities | $10,717,212 | $9,826,562 | | Class A common stock subject to possible redemption | $106,416 | $23,793,335 | | Total Stockholders' Deficit | $(10,273,151) | $(8,965,923) | Condensed Consolidated Statements of Operations (Unaudited) For the three months ended March 31, 2025, the company reported a net loss of $990,974, a significant shift from the net income of $689,518 in the same period of 2024, primarily due to a $1.47 million expense from the change in fair value of warrant liability Comparison of Statements of Operations (Unaudited) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Loss from operations | $(474,341) | $(345,251) | | Income from cash held in Trust Account | $134,016 | $1,688,163 | | Change in fair value of warrant liability | $(1,473,658) | $290,594 | | Change in fair value of Capital Contribution Note | $843,902 | — | | Net (loss) income | $(990,974) | $689,518 | | Basic and diluted net (loss) income per share | $(0.12) | $0.03 | Condensed Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) The total stockholders' deficit increased from $(9.0) million to $(10.3) million as of March 31, 2025, primarily due to the net loss of $990,974 for the quarter and an excise tax charge related to stock redemptions - The accumulated deficit grew to $(10,273,851) as of March 31, 2025, from $(8,966,623) at the start of the year, driven by the quarterly net loss and charges related to stock redemptions[14] Condensed Consolidated Statements of Cash Flows (Unaudited) For Q1 2025, net cash used in operating activities was $690,796, while investing activities provided $23.8 million from Trust Account withdrawals, resulting in a net decrease in cash to $134,681 - The company withdrew $23.77 million from its Trust Account to fund shareholder redemptions during the quarter[17] - Cash at the end of the period was $134,681, down from $537,970 at the beginning of the year[17] Notes to Condensed Consolidated Financial Statements (Unaudited) The notes detail the company's status as a blank check company, its proposed merger with Events.com, and the extension of its business combination deadline, highlighting significant redemptions and a going concern warning due to insufficient funds and a $2.5 million excise tax liability - The company is a blank check company formed to effect a business combination and has not commenced any operations[19][20] - On August 26, 2024, the Company entered into a merger agreement with Events.com, Inc. The transaction is pending shareholder approval and other closing conditions[40] - The deadline to consummate a business combination was extended to December 31, 2025. Following the extension vote, redemptions left approximately $92,709 in the Trust Account[34] - Management has determined that the mandatory liquidation if a business combination is not completed, along with insufficient funds, raises substantial doubt about the Company's ability to continue as a going concern[73] - The company has an outstanding excise tax liability of $2,516,676 as of March 31, 2025, related to the 1% federal excise tax on stock redemptions[111] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial results, liquidity, and proposed merger with Events.com, reiterating severe liquidity constraints with only $134,681 in cash and a $2.5 million unpaid excise tax liability, raising substantial doubt about its going concern ability - The company is a blank check company with no operations, focused on completing its proposed business combination with Events.com[159][195] - The deadline to complete a business combination has been extended to December 31, 2025. Following the latest extension, shareholder redemptions reduced the Trust Account balance to approximately $92,709[166] - The company has insufficient funds to pay its excise tax liability of approximately $2.5 million, which was partially due on April 30, 2025[199] - Management has concluded that there is substantial doubt about the Company's ability to continue as a going concern due to the risk of mandatory liquidation if a business combination is not completed[205] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk[221] Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025, due to a material weakness in internal control over financial reporting related to complex financial instruments - The CEO and CFO concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025[224] - The ineffectiveness is attributed to a material weakness in internal control over financial reporting concerning the accounting for complex financial instruments[224] - No changes occurred during the quarter that materially affected internal control, but the company is implementing enhancements to its accounting processes[225][226] PART II. OTHER INFORMATION This section covers other required disclosures, including legal proceedings, risk factors, equity sales, and exhibits, providing additional context on the company's operational and financial environment Legal Proceedings The company reports that there are no legal proceedings - The company has no legal proceedings to report[229] Risk Factors This section refers to the risk factors detailed in the company's Annual Report on Form 10-K, specifically highlighting the adverse impact of changes in international trade policies on business combination efforts or post-combination performance - The company identifies that changes in international trade policies and tariffs pose a material risk to its ability to find a suitable business combination target and to the future performance of a post-combination entity[231][233] Unregistered Sales of Equity Securities and Use of Proceeds This section details the proceeds from the company's IPO and private placements, outlining significant shareholder redemptions, including the February 28, 2025, redemption of 2,191,753 shares for $23.8 million, leaving only $92,709 in the Trust Account - On February 28, 2025, holders of 2,191,753 shares of Class A common stock redeemed their shares for approximately $10.84 per share, totaling an aggregate redemption of $23,765,518[240] - Following the February 2025 redemptions, the amount remaining in the Trust Account was reduced to approximately $92,709[240] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[241] Mine Safety Disclosures This item is not applicable to the company - Not applicable[242] Other Information The company reports no other information - None[243] Exhibits This section lists the exhibits filed with the Form 10-Q, including the Certificate of Amendment to the charter, the form of Non-Redemption Agreement, and officer certifications required under the Sarbanes-Oxley Act