Hennessy Capital Investment Corp VII-A(HVII) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This section presents the unaudited condensed financial statements and related disclosures for Hennessy Capital Investment Corp. VII Item 1. Financial Statements This section presents the unaudited condensed financial statements for Hennessy Capital Investment Corp. VII (HVII) as of June 30, 2025, and for the periods ended June 30, 2025, including detailed notes on organization, accounting policies, IPO, private placement, related party transactions, commitments, contingencies, and fair value measurements Condensed Balance Sheets This section provides a snapshot of HVII's financial position, detailing assets, liabilities, and shareholders' deficit at specific dates Condensed Balance Sheet Data | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :----------------------------------- | :------------------------ | :------------------ | | Cash and cash equivalents | $1,861,192 | $20,005 | | Total current assets | $1,982,233 | $40,834 | | Marketable securities held in Trust Account | $193,308,208 | — | | Total Assets | $195,290,441 | $993,266 | | Total current liabilities | $156,654 | $566,218 | | Total Liabilities | $8,531,654 | $1,016,218 | | Class A ordinary shares subject to possible redemption | $193,308,208 | — | | Total Shareholders' Deficit | $(6,549,421) | $(22,952) | - Significant increase in total assets from $993,266 at December 31, 2024, to $195,290,441 at June 30, 2025, primarily due to marketable securities held in the Trust Account following the IPO[10] - Class A ordinary shares subject to possible redemption increased from $0 to $193,308,208, reflecting the IPO proceeds placed in the Trust Account[10] Condensed Statement of Operations This section outlines HVII's financial performance, reporting revenues, expenses, and net income over specific periods Condensed Statement of Operations Data | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------------------ | :------------------------------- | :----------------------------- | | General and administrative costs | $448,910 | $937,945 | | Loss from operations | $(448,910) | $(937,945) | | Interest earned on cash equivalents | $15,444 | $27,997 | | Interest earned on marketable securities held in Trust Account | $1,953,980 | $3,448,469 | | Total other income | $1,969,424 | $3,476,466 | | Net income | $1,520,515 | $2,538,521 | | Basic and diluted net income per ordinary share, Class A ordinary shares | $0.06 | $0.11 | - The company reported net income of $1,520,515 for the three months and $2,538,521 for the six months ended June 30, 2025, primarily driven by interest earned on marketable securities in the Trust Account[14] Condensed Statement of Changes in Shareholders' Deficit This section details the changes in HVII's shareholders' deficit, including net income and share-related transactions Condensed Statement of Changes in Shareholders' Deficit Data | Metric | January 1, 2025 | June 30, 2025 | | :------------------------------------------------ | :-------------- | :------------ | | Total Shareholders' Deficit | $(22,952) | $(6,549,421) | | Sale of Private Placement Units (Class A ordinary shares) | — | $69 | | Fair value of public Share Rights at issuance | — | $1,577,000 | | Accretion for Class A ordinary shares to redemption amount | — | $(15,504,819) | | Net income (six months) | — | $2,538,522 | - Shareholders' Deficit increased significantly from $(22,952) at January 1, 2025, to $(6,549,421) at June 30, 2025, largely due to the accretion for Class A ordinary shares to redemption amount[16] - The company recorded $6,900,000 from the sale of Private Placement Units and recognized $1,577,000 for the fair value of public Share Rights at issuance[16] Condensed Statement of Cash Flows This section presents HVII's cash inflows and outflows from operating, investing, and financing activities Condensed Statement of Cash Flows Data | Cash Flow Activity | Six Months Ended June 30, 2025 | | :------------------------------------ | :----------------------------- | | Net cash used in operating activities | $(811,872) | | Net cash used in investing activities | $(189,859,739) | | Net cash provided by financing activities | $192,512,798 | | Net change in cash and cash equivalents | $1,841,187 | | Cash and cash equivalents, end of the period | $1,861,192 | - Operating activities used $811,872 in cash, primarily due to adjustments reconciling net income to cash flow, including interest earned on marketable securities held in the Trust Account[18] - Investing activities resulted in a net cash outflow of $189,859,739, mainly from the investment of cash into the Trust Account[18] - Financing activities provided $192,512,798, driven by proceeds from the sale of Units and Private Placement Units, net of underwriting discounts[18] Notes to Condensed Financial Statements This section provides detailed explanations and disclosures supporting the condensed financial statements NOTE 1 — ORGANIZATION AND BUSINESS OPERATIONS This note describes HVII's formation, IPO, private placement, and business combination objectives - Hennessy Capital Investment Corp. VII (HVII) is a blank check company incorporated on September 27, 2024, for the purpose of effecting a business combination[20] - On January 21, 2025, HVII consummated its Initial Public Offering (IPO) of 19,000,000 units at $10.00 per unit, generating gross proceeds of $190,000,000[22] - Simultaneously with the IPO, HVII sold 690,000 private placement units at $10.00 per unit, generating $6,900,000, with the Sponsor and Underwriters as purchasers[23] - Transaction costs for the IPO amounted to $12,656,782, including cash underwriting fees, deferred underwriting fees, and other offering costs[24] - Substantially all net proceeds are intended for a Business Combination, which must have a fair market value of at least 80% of the Trust Account's net balance[25][26] - As of June 30, 2025, HVII had cash and cash equivalents of $1,861,192 and working capital of $1,825,579, with sufficient funds for working capital needs for at least one year[34] NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES This note outlines the key accounting principles and methods used in preparing HVII's financial statements - The unaudited condensed financial statements are prepared in accordance with GAAP for interim financial information and SEC rules, with certain disclosures condensed or omitted[36] - HVII is an 'emerging growth company' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[38][39] - Marketable securities held in the Trust Account are classified as held-to-maturity and recorded at amortized cost, or as trading securities when comprised of money market securities[44] - Offering costs allocated to Class A ordinary shares subject to possible redemption were charged to temporary equity, while those allocated to Share Rights were charged to shareholders' deficit[46] - HVII is an exempted Cayman Islands company and is not subject to income taxes in the Cayman Islands or the United States, resulting in a zero tax provision[52] - Class A ordinary shares subject to possible redemption are classified as temporary equity at redemption value, with changes recognized immediately[54] NOTE 3 — INITIAL PUBLIC OFFERING This note details the terms and proceeds of HVII's Initial Public Offering, including unit structure - On January 21, 2025, HVII sold 19,000,000 Units in its IPO, including a partial exercise of the over-allotment option, at $10.00 per Unit[61] - Each Unit consists of one Class A ordinary share and one Share Right, entitling the holder to receive one-twelfth (1/12) of one Class A ordinary share upon Business Combination[61] NOTE 4 — PRIVATE PLACEMENT This note describes the private placement of units to the Sponsor and Underwriters, including transfer restrictions - Simultaneously with the IPO, the Sponsor and Underwriters purchased 690,000 Private Placement Units at $10.00 each, totaling $6,900,000[62] - Private Placement Units are subject to transfer restrictions until 30 days after a Business Combination and grant certain registration rights[63] - The Sponsor, officers, and directors waived redemption rights for their founder shares, private placement shares, and public shares in connection with a Business Combination[65] NOTE 5 — RELATED PARTY TRANSACTIONS This note discloses transactions and arrangements between HVII and its related parties, including the Sponsor - The Sponsor initially received 5,750,000 founder shares for $25,000 and an additional 958,333 founder shares for no consideration, subject to forfeiture[66] - After partial exercise of the over-allotment option and forfeiture, the Sponsor holds 5,203,333 founder shares[66] - Founder shares were transferred to the CFO, COO, and independent directors for $0.004 per share, with a fair value of $0.99 per share, recognized as compensation expense upon probable occurrence of a Business Combination[67] - The Sponsor loaned the Company up to $250,000 via a non-interest bearing Promissory Note, which was fully repaid on January 21, 2025[71] - HVII pays $15,000 per month to the Sponsor for administrative services and $10,000 per month to the CFO for services[73][74] NOTE 6 — COMMITMENTS AND CONTINGENCIES This note outlines HVII's contractual obligations, potential liabilities, and geopolitical risks - Geopolitical instability (Russia-Ukraine, Israel-Hamas, Israel-Iran conflicts) and U.S. tariff policies pose risks to HVII's search for a Business Combination and potential target businesses[76][77] - Holders of founder shares, Private Placement Units, and Working Capital Loans have registration rights for their securities[78] - Underwriters received a $3,800,000 cash underwriting discount and are entitled to a deferred underwriting discount of up to $7,600,000, payable upon completion of a Business Combination[80] - Deferred legal fees totaled $775,000 as of June 30, 2025, payable upon consummation of a Business Combination and classified as a non-current liability[82] NOTE 7 — SHAREHOLDERS' DEFICIT This note details HVII's authorized and outstanding share capital, including Class A and Class B ordinary shares - HVII is authorized to issue 1,000,000 preference shares, 200,000,000 Class A ordinary shares, and 20,000,000 Class B ordinary shares[83][84][85] - As of June 30, 2025, there were 690,000 Class A ordinary shares and 6,333,333 Class B ordinary shares issued and outstanding (excluding redeemable Class A shares)[84][85] - Founder shares (Class B ordinary shares) automatically convert to Class A ordinary shares on a one-for-one basis upon Business Combination, subject to certain adjustments[86] - Holders of Class B ordinary shares have exclusive voting rights on director appointments/removals and continuation in a different jurisdiction prior to a Business Combination[89] - Each Share Right entitles the holder to receive one-twelfth (1/12) of one Class A ordinary share upon consummation of a Business Combination, but will expire worthless if HVII fails to complete a Business Combination[90] NOTE 8 — FAIR VALUE MEASUREMENTS This note explains HVII's fair value hierarchy and the valuation of assets and liabilities, particularly Trust Account securities - HVII uses a fair value hierarchy (Level 1, 2, 3) to classify assets and liabilities based on observable and unobservable inputs[91][92] - As of June 30, 2025, assets in the Trust Account were $193,308,208, held in a money market account (Level 1 fair value)[94][95] - The fair value of Share Rights issued in the IPO was $1,577,000, or $0.083 per Share Right, classified within shareholders' deficit and not subject to remeasurement[95] NOTE 9 — SEGMENT REPORTING This note clarifies that HVII operates as a single reportable segment, with the CFO as the primary decision-maker - HVII operates as a single reportable segment, with the Chief Financial Officer (CODM) reviewing overall assets, operating results, and financial metrics[97] - The CODM monitors interest earned on the Trust Account and general and administrative costs to manage shareholder value, investment strategy, and capital availability for a Business Combination[100] NOTE 10 — SUBSEQUENT EVENTS This note confirms no material events occurred after the balance sheet date requiring disclosure - No subsequent events requiring adjustment or disclosure were identified after the balance sheet date up to the issuance of the unaudited condensed financial statements[102] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on HVII's financial condition and results of operations, including forward-looking statements, an overview of its SPAC nature, factors affecting its performance, detailed results of operations, liquidity and capital resources, and contractual obligations, highlighting the company's focus on completing a business combination and related financial activities Special Note Regarding Forward Looking Statements This section highlights that the report contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially - The report contains forward-looking statements regarding HVII's future expectations, hopes, beliefs, intentions, or strategies, which are not guarantees of future performance[105][106] - Actual results may differ materially due to various risks and uncertainties, including HVII's ability to select a target, complete a business combination, and retain key personnel[106][107] Overview This section provides an overview of HVII as a SPAC, its formation, and its objective to effect a business combination - HVII is a SPAC formed on September 27, 2024, to effect a business combination using proceeds from its IPO, private placement units, and potentially additional securities or debt[109] - Issuance of additional ordinary shares or incurring significant indebtedness in a business combination could dilute public shareholders, subordinate rights, cause a change of control, or adversely affect market prices[110][112] Factors That May Adversely Affect HVII's Results of Operations This section discusses economic uncertainty and geopolitical instability as key factors that may negatively impact HVII's operations and ability to complete a business combination - HVII's operations and ability to complete a business combination are susceptible to economic uncertainty and volatility, including geopolitical instability (Ukraine, Middle East conflicts) and changes in financial markets[114] - These factors could negatively impact HVII's search for a target business and the consummation of a business combination[114] Results of Operations This section details HVII's financial performance, primarily driven by interest income from the Trust Account offset by administrative costs - HVII has not generated operating revenues to date, with activities focused on organizational efforts and the IPO[115] Results of Operations Summary | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------------------ | :------------------------------- | :----------------------------- | | Net income | $1,520,515 | $2,538,521 | | Interest earned on marketable securities held in Trust Account | $1,953,980 | $3,448,469 | | General and administrative costs | $448,910 | $937,945 | - Net income is primarily derived from interest earned on marketable securities held in the Trust Account, offset by general and administrative costs[116][117] Liquidity and Capital Resources This section discusses HVII's sources and uses of cash, including IPO proceeds, Trust Account investments, and funding for operational expenses and potential business combinations - HVII's liquidity prior to the IPO was limited to initial Class B share purchases and sponsor loans, which were repaid[119] - Following the IPO and private placement, $190,000,000 was placed in the Trust Account, and HVII incurred $12,656,782 in transaction costs[120][121] - Funds in the Trust Account are primarily for the business combination, while funds outside are for identifying targets, due diligence, and operational expenses[122][123] - The Sponsor or affiliates may provide Working Capital Loans, convertible into Private Placement Units, to finance transaction costs[124] - HVII may need additional financing for a business combination if current funds are insufficient or if a significant number of public shares are redeemed[126] Off-Balance Sheet Financing Arrangements This section confirms that HVII has no off-balance sheet arrangements as of the reporting date - As of June 30, 2025, HVII has no obligations, assets, or liabilities considered off-balance sheet arrangements[127] Contractual Obligations This section outlines HVII's contractual commitments, including administrative fees and deferred underwriting discounts - HVII has no long-term debt, capital lease, or operating lease obligations, other than monthly administrative fees of $15,000 to the Sponsor and $10,000 to the CFO[128] - A deferred underwriting discount of up to $7,600,000 is payable to underwriters upon completion of a business combination[129] Critical Accounting Estimates This section states that HVII has not identified any critical accounting estimates requiring significant judgment - HVII has not identified any critical accounting estimates that require significant judgment and could materially differ from actual results[130] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, HVII is exempt from providing quantitative and qualitative disclosures about market risk - HVII is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[131] Item 4. Controls and Procedures This section details the evaluation of HVII's disclosure controls and procedures and reports on any changes in internal control over financial reporting, concluding that disclosure controls were effective as of June 30, 2025, and no material changes to internal controls occurred during the quarter Evaluation of Disclosure Controls and Procedures This section confirms the effectiveness of HVII's disclosure controls and procedures as evaluated by certifying officers - HVII's Certifying Officers evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and concluded they were effective[132] - Disclosure controls provide reasonable, not absolute, assurance that objectives are met, acknowledging inherent limitations and resource constraints[133] Changes in Internal Control over Financial Reporting This section reports on the absence of material changes to HVII's internal control over financial reporting during the most recent fiscal quarter - There were no changes in HVII's internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[134] PART II - OTHER INFORMATION This section provides additional information beyond financial statements, covering legal, risk, and other disclosures Item 1. Legal Proceedings HVII's management reports no pending litigation against the company, its officers, or directors as of the date of this Quarterly Report - To the knowledge of HVII's management, there is no litigation currently pending against HVII, its officers, or directors[136] Item 1A. Risk Factors This section updates the risk factors previously disclosed, emphasizing the potential adverse effects of changes in international trade policies, tariffs, and treaties on HVII's search for a business combination target or the performance of a post-business combination company - No material changes to risk factors were disclosed since the Annual Report on Form 10-K, except for the detailed discussion on international trade policies and tariffs[137] - Changes in international trade policies, tariffs, and treaties could materially affect HVII's ability to find a suitable business combination target or the performance of a post-business combination company[138][140] - Uncertainty regarding future trade policies and tariffs may reduce the pool of potential target companies and adversely affect the market value of the post-business combination company's securities[139][141] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section confirms no unregistered equity sales or use of proceeds during the reporting period - No unregistered sales of equity securities or use of proceeds occurred[142] Item 3. Defaults Upon Senior Securities This section confirms no defaults on senior securities occurred during the reporting period - No defaults upon senior securities occurred[143] Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to HVII's operations - Mine safety disclosures are not applicable to HVII[144] Item 5. Other Information This section reports on director and officer trading arrangements during the quarter - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[145] Item 6. Exhibits This section lists all documents filed as exhibits to the Quarterly Report on Form 10-Q - Exhibits include the Amended and Restated Memorandum and Articles of Association, CEO and CFO certifications (31.1*, 31.2*, 32.1**, 32.2**), and Inline XBRL documents (101.INS*, 101.SCH*, 101.CAL*, 101.LAB*, 101.PRE*, 101.DEF*, 104*)[146] Signatures This section provides the official signatures of HVII's authorized officers, certifying the report's accuracy - The report is duly signed on behalf of Hennessy Capital Investment Corp. VII by Daniel J. Hennessy, Chairman of the Board of Directors and Chief Executive Officer, and Nicholas Geeza, Executive Vice President, Chief Financial Officer and Secretary, on August 13, 2025[149][150]