HCM Acquisition p(HCMA) - 2023 Q3 - Quarterly Report

Part I. Financial Information Financial Statements This section presents HCM Acquisition Corp's unaudited condensed financial statements, including balance sheets, operations, equity, and cash flows, for the period ended September 30, 2023 Condensed Balance Sheets Total assets significantly decreased from $298.6 million to $44.8 million due to share redemptions, while liabilities also declined Condensed Balance Sheet Highlights (Unaudited) | Account | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Assets | $44,847,360 | $298,599,516 | | Cash and marketable securities held in trust account | $44,680,719 | $297,619,343 | | Total Liabilities | $8,729,480 | $16,956,165 | | Deferred underwriting fee payable | $3,000,000 | $15,125,000 | | Class A ordinary shares subject to possible redemption | $44,680,719 | $297,619,343 | | Total Shareholders' Deficit | ($8,562,839) | ($15,975,992) | Condensed Statements of Operations Net income for the nine months ended September 30, 2023, was $1.18 million, a decrease from $11.96 million in 2022 Condensed Statements of Operations (Unaudited) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Loss from operations | ($3,858,238) | ($946,108) | | Interest earned on marketable securities held in Trust Account | $4,736,501 | $1,146,917 | | Change in fair value of warrant liabilities | $0 | $11,497,500 | | Net Income | $1,178,392 | $11,956,900 | | Basic and diluted net income per share, Class A | $0.05 | $0.33 | Condensed Statements of Changes in Shareholders' Deficit Shareholders' deficit improved from $(16.0) million to $(8.6) million, driven by a non-cash gain from deferred underwriting fee reduction Changes in Shareholders' Deficit (Jan 1, 2023 to Sep 30, 2023) | Item | Amount | | :--- | :--- | | Balance — January 1, 2023 | ($15,975,992) | | Reduction of Deferred Underwriting Fee | $11,827,938 | | Net income (allocated to deficit) | $851,333 | | Accretion for Class A ordinary shares to redemption amount | ($5,593,177) | | Balance — September 30, 2023 | ($8,562,839) | Condensed Statements of Cash Flows Net cash used in operating activities was $1.04 million, while investing and financing activities primarily related to share redemptions Condensed Statements of Cash Flows Highlights (Nine Months Ended Sep 30, 2023) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash used in operating activities | ($1,043,319) | | Net cash provided by investing activities | $257,675,125 | | Net cash used in financing activities | ($257,345,126) | | Net Change in Cash and Cash Equivalents | ($713,320) | Notes to Condensed Financial Statements Notes detail the company's SPAC status, business combination deadline extension, share redemptions, and going concern uncertainties - The company is a blank check company formed to effect a business combination[22] - Shareholders approved extending the business combination deadline on April 19, 2023, leading to the redemption of 24.7 million ordinary shares[40] - An Amended and Restated Business Combination Agreement was entered into with Murano PV, S.A. DE C.V. on August 2, 2023[107] - Management identified substantial doubt about the company's ability to continue as a going concern due to the approaching liquidation date and limited cash[47][156] Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's operational results, liquidity, and capital resources, highlighting its reliance on trust account interest and going concern issues Results of Operations Summary | Period | Net (Loss) Income | Key Drivers | | :--- | :--- | :--- | | 3 Months Ended Sep 30, 2023 | ($945,139) | $1.5M operating costs offset by $0.6M interest income | | 3 Months Ended Sep 30, 2022 | $1,867,031 | $2.2M other income (interest, unrealized gains, warrant value change) offset by $0.4M operating costs | | 9 Months Ended Sep 30, 2023 | $1,178,392 | $5.0M other income (interest, fee reduction) offset by $3.9M operating costs | | 9 Months Ended Sep 30, 2022 | $11,956,900 | $12.9M other income (primarily $11.5M warrant value change) offset by $0.9M operating costs | - As of September 30, 2023, the company held $79,103 in cash and $44.7 million in marketable securities within the Trust Account[151][150] - The business combination deadline was extended to November 25, 2023, with potential monthly extensions until January 25, 2024[154][47] - The deferred underwriting fee was reduced by $12.1 million, with $3.0 million remaining payable upon business combination[160][100] Quantitative and Qualitative Disclosures Regarding Market Risk Disclosure for market risk is not required as the company qualifies as a smaller reporting company - Disclosure is not required as the company is a smaller reporting company[170] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal controls - Management concluded that disclosure controls and procedures were effective as of September 30, 2023[172] - No material changes occurred in internal control over financial reporting during the quarter ended September 30, 2023[173] Part II. Other Information Legal Proceedings The company reports no legal proceedings - The company has no legal proceedings to report[175] Risk Factors No material changes to risk factors previously disclosed in the 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 fiscal year ended December 31, 2022[175] 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 - The company reports none[176] Defaults Upon Senior Securities The company reports no defaults upon senior securities - The company reports none[176] Mine Safety Disclosures The company reports no mine safety disclosures - The company reports none[176] Other Information The company reports no other information - The company reports none[176] Exhibits This section lists filed exhibits, including the Amended and Restated Business Combination Agreement and various officer certifications - Lists filed exhibits, including the Amended and Restated Business Combination Agreement dated August 2, 2023, and various officer certifications[177]