HCM Acquisition p(HCMA) - 2023 Q1 - Quarterly Report

Part I. Financial Information Financial Statements This section presents the unaudited condensed financial statements for the quarter ended March 31, 2023, detailing a net income of $851,333 primarily from trust account interest and total assets of $300.7 million Condensed Balance Sheet (Unaudited) | | March 31, 2023 ($) | December 31, 2022 ($) | | :--- | :--- | :--- | | Total Assets | 300,706,119 | 298,599,516 | | Cash and marketable securities held in trust account | 300,037,814 | 297,619,343 | | Total Liabilities | 6,383,497 | 16,956,165 | | Deferred underwriting fee payable | 3,000,000 | 15,125,000 | | Total Shareholders' Deficit | (5,715,192) | (15,975,992) | Condensed Statement of Operations (Unaudited) | | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :--- | :--- | :--- | | Loss from operations | (1,590,450) | (406,424) | | Interest earned on marketable securities held in Trust Account | 2,418,471 | 95,502 | | Change in fair value of warrant liabilities | (273,750) | 7,938,750 | | Net income | 851,333 | 7,104,081 | | Basic and diluted net income per share, Class A | 0.02 | 0.23 | Notes to Condensed Financial Statements (Unaudited) The notes detail the company's status as a blank check company, its January 2022 IPO, the March 2023 business combination agreement with Murano PV, and the April 2023 shareholder vote to extend the deadline, which triggered the redemption of 24.7 million shares, also covering accounting policies for warrants and redeemable Class A shares - The Company operates as a blank check company, with all activities through March 31, 2023, focused on its formation, IPO, and search for a business combination target[23][25] - On March 13, 2023, the Company entered into a Business Combination Agreement with Murano PV, S.A. DE C.V., which, if consummated, will result in the company becoming a wholly-owned subsidiary of a new public company, PubCo[101] - Shareholders voted on April 19, 2023, to extend the business combination deadline to May 25, 2023, with further monthly options until January 25, 2024, leading to the redemption of 24,670,594 ordinary shares and a $258.5 million withdrawal from the Trust Account[41][127] - Underwriters agreed on March 13, 2023, to forfeit 80.17% of deferred underwriting commissions, reducing the fee from $15,125,000 to $3,000,000, payable upon business combination completion[99] - The company accounts for warrants as liabilities at fair value, with changes recognized in the statement of operations, valuing public warrants using market quotes (Level 1) and Private Placement Warrants using a binomial lattice model (Level 3)[61][124] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial state as a blank check company with no operations or revenue, reporting a Q1 2023 net income of $851,333, a significant decrease from Q1 2022, and acknowledges substantial doubt about its going concern ability due to limited cash and impending business combination deadline, while detailing reduced deferred underwriting fees and potential advisor fees Quarterly Results Comparison | | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :--- | :--- | :--- | | Net Income | 851,333 | 7,104,081 | | Interest Earned on Trust Account | 2,418,471 | 95,502 | | Change in Fair Value of Warrant Liabilities | (273,750) | 7,938,750 | | Operating Costs | (1,590,450) | (406,424) | - As of March 31, 2023, the company reported $467,492 in cash and a working capital deficit of $1,893,942, leading management to conclude substantial doubt about its ability to continue as a going concern without a timely business combination[46][146] - A fee reduction agreement on March 13, 2023, decreased the deferred underwriting commission to $3,000,000, payable upon business combination completion[149] - The company engaged Cohen & Company Capital Markets (CCM) as a financial advisor for the merger, with fees including $1,000,000 upon closing and a potential discretionary fee up to $1,000,000[150][151] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, HCM Acquisition Corp is not required to provide disclosures for this item - Disclosure is not required for smaller reporting companies[160] Controls and Procedures Management, including the principal executive and financial officers, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2023, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2023, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[162] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[163] Part II. Other Information Legal Proceedings The company reports that there are no legal proceedings - None[165] Risk Factors The company states there have been no material changes to the risk factors previously disclosed in its Form 10-K for the fiscal year ended December 31, 2022 - There have been no material changes to the risk factors disclosed in the Form 10-K for the period ended December 31, 2022[165] Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities or use of proceeds for the period - None[166] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[166] Mine Safety Disclosures The company reports no mine safety disclosures - None[166] Other Information The company reports no other information - None[166] Exhibits This section lists the exhibits filed as part of the Form 10-Q, primarily consisting of officer certifications required by the Sarbanes-Oxley Act and XBRL interactive data files List of Exhibits | No. | Description of Exhibit | | :--- | :--- | | 31.1* | Certification of Principal Executive Officer (SOX 302) | | 31.2* | Certification of Principal Financial Officer (SOX 302) | | 32.1* | Certification of Principal Executive Officer (SOX 906) | | 32.2* | Certification of Principal Financial Officer (SOX 906) | | 101.INS* | XBRL Instance Document | | 101.SCH* | XBRL Taxonomy Extension Schema Document | | 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | | 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | | 101.LAB* | XBRL Taxonomy Extension Labels Linkbase Document | | 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |