HCM Acquisition p(HCMA) - 2022 Q1 - Quarterly Report

Part I. Financial Information This section details the company's unaudited financial performance, condition, market risks, and internal controls Financial Statements This section presents HCM Acquisition Corp's unaudited condensed financial statements, detailing its financial position, operations, equity, and cash flows Condensed Balance Sheets This section provides a snapshot of the company's financial position at specific dates, detailing assets, liabilities, and equity Condensed Balance Sheet Highlights (Unaudited) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash | $1,189,809 | $158 | | Cash marketable securities held in trust account | $293,357,945 | — | | Total Assets | $294,939,107 | $342,022 | | Liabilities | | | | Warrant liabilities | $5,475,000 | — | | Deferred underwriting fee payable | $15,125,000 | — | | Total Liabilities | $20,974,978 | $332,808 | | Class A ordinary shares subject to possible redemption | $293,250,000 | — | | Total Shareholders' (Deficit) Equity | ($19,285,871) | $9,214 | Condensed Statements of Operations This section presents the company's financial performance over a period, detailing revenues, expenses, and net income or loss Statement of Operations Summary (Unaudited) | Item | For the Three Months Ended March 31, 2022 | For the Period from Feb 5, 2021 to Mar 31, 2021 | | :--- | :--- | :--- | | Loss from operations | ($406,424) | ($12,500) | | Change in fair value of warrant liabilities | $7,938,750 | — | | Net income (loss) | $7,104,081 | ($12,500) | | Basic and diluted net income (loss) per share, Class A | $0.23 | $0.00 | Condensed Statements of Changes in Shareholders' (Deficit) Equity This section details the changes in the company's shareholders' equity over a period, including net income and share transactions - Shareholders' equity shifted from a positive $9,214 on January 1, 2022, to a deficit of ($19,285,871) by March 31, 2022. This change was primarily driven by a $33 million charge for the accretion of Class A ordinary shares to their redemption value, which was partially offset by a net income of $7.1 million[16] Condensed Statements of Cash Flows This section summarizes the cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary for the Three Months Ended March 31, 2022 (Unaudited) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash used in operating activities | ($511,388) | | Net cash used in investing activities | ($293,250,000) | | Net cash provided by financing activities | $294,951,039 | | Net Change in Cash | $1,189,651 | - Financing activities were primarily driven by $282.5 million in proceeds from the sale of Units and $13.0 million from the sale of Private Placement Warrants. Investing activities consisted entirely of placing funds into the Trust Account[20] Notes to Condensed Financial Statements This section provides detailed explanations and additional information supporting the condensed financial statements - The Company is a blank check company incorporated on February 5, 2021, for the purpose of effecting a business combination. It has not commenced any operations and its activities relate to its formation and the Initial Public Offering (IPO)[23][25] - On January 25, 2022, the Company consummated its IPO of 28,750,000 units at $10.00 per unit, generating gross proceeds of $287,500,000. Following the IPO, $293,250,000 was placed in a trust account[26][29] - The Company has until 15 months from the IPO closing (approximately April 25, 2023) to complete a Business Combination, or it will be required to liquidate and redeem public shares[38][43] - Warrants are accounted for as liabilities at fair value, with changes in fair value recognized in the statement of operations. Class A ordinary shares subject to possible redemption are classified as temporary equity outside of shareholders' deficit[57][59] Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's financial condition and results, highlighting its blank check status, non-cash net income, and liquidity - The company's activities since inception on February 5, 2021, have been limited to organizational activities, preparing for the IPO, and identifying a target for a Business Combination[117] Financial Highlights for Q1 2022 | Metric | Value | | :--- | :--- | | Net Income | $7,104,081 | | Interest Earned on Trust Account | $95,502 | | Change in Fair Value of Warrant Liabilities | $7,938,750 | | Operating Costs | ($406,424) | - As of March 31, 2022, the company had $1,189,809 in cash and $293,357,945 in marketable securities held in the Trust Account. The funds outside the trust are intended for identifying and evaluating target businesses[125][126] - The underwriter is entitled to a deferred fee totaling $15,125,000, which is payable from the Trust Account only upon the completion of a Business Combination[131] Quantitative and Qualitative Disclosures Regarding Market Risk As a smaller reporting company, HCM Acquisition Corp is not required to provide quantitative and qualitative disclosures about market risk - Disclosure is not required for smaller reporting companies[139] Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal controls - Based on an evaluation as of March 31, 2022, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[141] - There were no changes in the company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, its internal controls[142] Part II. Other Information This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, and other disclosures Legal Proceedings The company has no legal proceedings to report - None reported[145] Risk Factors This section updates the company's risk factors, emphasizing the potential adverse impact of new regulations, especially the SEC's proposed rules for SPACs - The company notes that on March 30, 2022, the SEC issued proposed rules that could impose additional disclosure requirements and increase potential liability for SPACs, which may adversely affect the company's ability to complete its initial business combination[146] Unregistered Sales of Equity Securities and Use of Proceeds This section outlines the company's IPO and private placement results, detailing gross proceeds and funds deposited into the trust account - On January 25, 2022, the company consummated its IPO of 28,750,000 Units at $10.00 per Unit, generating gross proceeds of $287,500,000[148] - Concurrently with the IPO, the company sold 13,000,000 Private Placement Warrants at $1.00 each in a private placement, generating total proceeds of $13,000,000[149] - Of the gross proceeds from the IPO and private placement, $293,250,000 was placed in the Trust Account[150] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None reported[153] Mine Safety Disclosures The company reports no mine safety disclosures - None reported[153] Other Information The company reports no other information - None reported[153] Exhibits This section lists the exhibits filed with the quarterly report, including key legal and financial agreements and officer certifications - The report includes a list of filed exhibits, such as the Underwriting Agreement, Warrant Agreement, Trust Agreement, and officer certifications required under the Sarbanes-Oxley Act[154] Part III. Signatures This section contains the official signatures authorizing the filing of the quarterly report - The report was duly authorized and signed on May 16, 2022, by Shawn Matthews, Chairman and Chief Executive Officer, and James Bond, President and Chief Financial Officer[158]