HCM Acquisition p(HCMA) - 2023 Q2 - Quarterly Report

Part I. Financial Information Financial Statements The blank check company reported a $2.1 million net income for H1 2023, driven by trust account interest, with significant share redemptions reducing trust assets and raising going concern doubts Notes to Condensed Financial Statements (Unaudited) Notes detail the company's blank check status, IPO, business combination deadline extension to January 2024 with significant share redemptions, and related financial policies and transactions - On April 19, 2023, shareholders approved extending the business combination deadline, leading to the redemption of 24,670,594 ordinary shares, with $258.5 million withdrawn from the Trust Account[37][38] - The company entered into a Business Combination Agreement with Murano PV on March 13, 2023, later amended on August 2, 2023, to change the post-merger public company's incorporation from the Netherlands to the Bailiwick of Jersey[99][127][128] - Management has substantial doubt about the Company's ability to continue as a going concern due to the mandatory liquidation deadline if a Business Combination is not completed by the extended date of January 25, 2024[44] - The deferred underwriting commission payable upon a business combination was reduced by $12.125 million to a remaining $3.0 million after an agreement with the underwriter[97] - The Sponsor has provided loans to fund monthly extensions of the business combination deadline, with $428,338 advanced as of June 30, 2023, under a promissory note[91] Condensed Balance Sheet Comparison (Unaudited) | | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $126,741 | $792,423 | | Cash and marketable securities held in trust account | $43,679,931 | $297,619,343 | | Total Assets | $43,940,547 | $298,599,516 | | Liabilities & Equity | | | | Total Liabilities | $6,877,528 | $16,956,165 | | Class A ordinary shares subject to possible redemption | $43,679,931 | $297,619,343 | | Total Shareholders' Deficit | ($6,616,912) | ($15,975,992) | | Total Liabilities, Redemption Shares, and Deficit | $43,940,547 | $298,599,516 | Condensed Statement of Operations (Unaudited) | | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Loss from operations | ($2,340,609) | ($568,562) | | Interest earned on marketable securities held in Trust Account | $4,164,051 | $547,651 | | Change in fair value of warrant liabilities | $0 | $10,676,250 | | Net income | $2,123,531 | $10,089,869 | | Basic and diluted net income per share, Class A | $0.07 | $0.29 | Condensed Statement of Cash Flows (Unaudited) | | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($595,682) | ($611,529) | | Net cash provided by (used in) investing activities | $258,103,463 | ($293,250,000) | | Net cash (used in) provided by financing activities | ($258,173,463) | $294,932,450 | | Net Change in Cash and Cash Equivalents | ($665,682) | $1,070,921 | Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes the blank check company's financial performance, noting a decrease in net income to $2.1 million for H1 2023 due to prior year's non-recurring gains, constrained liquidity, and reliance on sponsor loans, reinforcing going concern doubts Results of Operations Comparison (Unaudited) | | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net Income | $2,123,531 | $10,089,869 | | Key Components | | | | Operating Costs | ($2,340,609) | ($568,562) | | Interest Income (Trust) | $4,164,051 | $547,651 | | Change in Fair Value of Warrants | $0 | $10,676,250 | - As of June 30, 2023, the company had cash of $126,741 and marketable securities in the Trust Account of $43,679,931, with the significant decrease in trust assets from $293.3 million at IPO due to shareholder redemptions[148][149] - The mandatory liquidation date of August 25, 2023 (extendable monthly to January 25, 2024) and low cash balance raise substantial doubt about the company's ability to continue as a going concern[153] - The company has several contractual obligations contingent on a business combination, including a $3 million deferred underwriting fee, a potential $1 million finder's fee, and advisory fees to Cohen & Company Capital Markets[157][158][160] Quantitative and Qualitative Disclosures Regarding Market Risk As a smaller reporting company, the company is not required to provide this information - This disclosure is not required for smaller reporting companies[167] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting identified during the quarter - Based on an evaluation as of June 30, 2023, management concluded that the company's disclosure controls and procedures were effective[169] - 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[170] Part II. Other Information Legal Proceedings The company reports that there are no legal proceedings - None[172] 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[172] Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities or changes in the use of proceeds - None[174] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[174] Mine Safety Disclosures The company reports no mine safety disclosures - None[174] Other Information The company reports no other information - None[174] Exhibits This section lists the exhibits filed with the report, which include certifications by the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, and XBRL data files - The report includes officer certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act and XBRL data files as filed exhibits[176]