Athena Technology Acquisition Corp. II 10-Q for FY2024 Q3
Athena Technology Acquisition Corp. II (ATEK)
About this 10-Q
Athena Technology Acquisition Corp. II filed this 10-Q on February 7, 2025, covering the quarter ended September 30, 2024 (FY2024 Q3).
Headline figures
Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $314.92K
- compared with a net loss of $548.2K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
For the transition period from to
Commission File No.
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices, including zip code)
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section
12(b) of the Act:
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate by check mark whether
the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☐ Large accelerated filer | ☐ Accelerated filer | |
| ☒ | ||
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes
As of February 4, 2025, there
were
ATHENA TECHNOLOGY ACQUISITION CORP. II
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
i
ITEM 1. INTERIM FINANCIAL STATEMENTS (UNAUDITED)
ATHENA TECHNOLOGY ACQUISITION CORP. II
CONDENSED BALANCE SHEETS
| September 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Cash and cash equivalents – restricted | ||||||||
| Prepaid income taxes | ||||||||
| Due from Sponsor | ||||||||
| Total current assets | ||||||||
| Investments held in Trust Account | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Note payable - related party, net of discount | ||||||||
| Convertible note - related party | ||||||||
| Due to related party | ||||||||
| Excise tax payable | ||||||||
| Franchise tax payable | ||||||||
| Income tax payable | ||||||||
| Total current liabilities | ||||||||
| Deferred underwriting fee payable | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION | ||||||||
| Class A Common stock subject to possible redemption, $ | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Preferred stock, $ | ||||||||
| Class A common stock; $ | ||||||||
| Class B common stock; $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ DEFICIT | ( | ) | ( | ) | ||||
| LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
ATHENA TECHNOLOGY ACQUISITION CORP. II
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||
| Franchise tax | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest income on investments held in Trust Account | ||||||||||||||||
| Finance costs – discount on debt issuance | ( | ) | ( | ) | ( | ) | ||||||||||
| Total other income (expense), net | ||||||||||||||||
| (LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES | ( | ) | ( | ) | ( | ) | ||||||||||
| Provision for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| NET (LOSS) INCOME | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Weighted average shares outstanding of Class A common stock | ||||||||||||||||
| Basic and diluted net (loss) income per share, Class A | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Weighted average shares outstanding of Class B common stock | ||||||||||||||||
| Basic and diluted net (loss) income per share, Class B | $ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
ATHENA TECHNOLOGY ACQUISITION CORP. II
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024
| Common stock | Additional | Total | ||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Remeasurement of common stock subject to redemption | — | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Excise tax payable attributable to redemption of common stock | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, March 31, 2024 (unaudited) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Remeasurement of common stock subject to redemption | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2024 (unaudited) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Remeasurement of common stock subject to redemption | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, September 30, 2024 (unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023
| Common stock | Additional | Total | ||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Remeasurement of common stock subject to redemption | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Balance, March 31, 2023 (unaudited) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Conversion of Class B common stock to Class A common stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Remeasurement of common stock subject to redemption | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Balance, June 30, 2023 (unaudited) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Class A common stock to be transferred to fund promissory note | — | — | ||||||||||||||||||||||||||
| Remeasurement of common stock subject to redemption | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, September 30, 2023 (unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
3
ATHENA TECHNOLOGY ACQUISITION CORP. II
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
| For the Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Interest income on investments held in Trust Account | ( | ) | ( | ) | ||||
| Finance costs – discount on debt issuance | ||||||||
| Expenses paid by related party | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other assets | ||||||||
| Prepaid income taxes | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Franchise tax payable | ( | ) | ( | ) | ||||
| Income tax payable | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Cash withdrawn from trust in connection with redemption | ||||||||
| Cash deposited to Trust Account | ( | ) | ( | ) | ||||
| Cash deposited to Trust Account to refund over withdrawal | ( | ) | ||||||
| Cash withdrawn from Trust Account to pay franchise and income taxes | ||||||||
| Net cash provided by investing activities | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from convertible note - related party | ||||||||
| Payment due to related party | ( | ) | ||||||
| Proceeds from promissory note - related party | ||||||||
| Redemptions of Class A common stock | ( | ) | ( | ) | ||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| NET CHANGE IN CASH AND CASH AND CASH EQUIVALENTS – RESTRICTED | ( | ) | ||||||
| CASH AND CASH AND CASH EQUIVALENTS - RESTRICTED, BEGINNING OF PERIOD | ||||||||
| CASH AND CASH AND CASH EQUIVALENTS - RESTRICTED, END OF PERIOD | $ | $ | ||||||
| CASH AND CASH AND CASH EQUIVALENTS - RESTRICTED, END OF PERIOD | ||||||||
| Cash | $ | $ | ||||||
| Cash and cash equivalents - restricted | ||||||||
| CASH AND CASH AND CASH EQUIVALENTS - RESTRICTED, END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | ||||||||
| Cash paid for income taxes | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES: | ||||||||
| Excise tax payable attributable to redemption of Class A common stock | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
ATHENA TECHNOLOGY ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
Note 1 – Organization and Business Operations
Athena Technology Acquisition Corp. II (“Athena”
or the “Company”) was incorporated in Delaware on
The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of September 30, 2024, the Company had not commenced any operations. All activity through September 30, 2024, relates to the Company’s formation and Initial Public Offering (“IPO”), which is described below and, since the offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income earned on investments from the proceeds derived from the IPO.
The registration statement for the Company’s
IPO was declared effective on December 9, 2021. On December 14, 2021, the Company consummated the IPO of
Simultaneously with the closing of the IPO, the
Company consummated the sale (“Private Placement”) of
Subsequent to the closing of the IPO, on December
28, 2021, the Company consummated the closing of the sale of
Offering costs for the IPO and over-allotment
amounted to $
Following the closing of the IPO, $
5
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the IPO and the sale of the Private Placement Units, although substantially
all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the
Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations
having an aggregate fair market value of at least
The Company will provide the holders of the outstanding
Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the
completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or
(ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct
a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion
of the amount then in the Trust Account (initially anticipated to be $
All of the Public Shares contain a redemption
feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder
vote or tender offer in connection with the Company’s Business Combination and in connection with certain amendments to the Company’s
amended and restated certificate of incorporation (as amended, restated, supplemented and/or otherwise modified from time to time, the
“Charter”). In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 480-10-S99, redemption provisions not solely within the control of a company require Class A common stock subject
to redemption to be classified outside of permanent equity. Given that the Public Shares will be issued with other freestanding instruments
(i.e., Public Warrants), the initial carrying value of the Class A common stock classified as temporary equity will be the allocated proceeds
determined in accordance with ASC 470-20. The Class A common stock is subject to ASC 480-10-S99. If it is probable that the equity instrument
will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date
of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption
date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the
instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately.
While redemptions cannot cause the Company’s net tangible assets to fall below $
Redemptions of the Company’s Public Shares may be subject to the satisfaction of conditions, including minimum cash conditions, pursuant to an agreement relating to the Company’s Business Combination. If the Company seeks stockholder approval of the Business Combination, the Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination, or such other vote as required by law or stock exchange rule. If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Charter, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.
If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor, officers and directors (the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the IPO in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
Notwithstanding the foregoing, the Charter provides
that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in
concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of
6
The Initial Stockholders have agreed not to propose
an amendment to the Charter that would affect the substance or timing of the Company’s obligation to redeem
If the Company is unable to complete a Business
Combination within the Combination Period (as defined herein), the Company will (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the
Trust Account and not previously released to the Company to pay its franchise and income taxes (less up to $
On June 13, 2023, the Company held a special meeting
of its stockholders (the “First Extension Special Meeting”), at which the stockholders approved proposals to amend the Company’s
Charter to (i) extend the date by which the Company must consummate its initial business combination from June 14, 2023 to up to March
14, 2024 by electing to extend the date to consummate an initial business combination on a monthly basis up to nine times by an additional
one month each time after June 14, 2023 (the date which is 18 months from the closing date of the IPO, the “First Current Outside
Date”) until March 14, 2024 (the date which is 27 months from the closing date of the IPO), or a total of up to nine months after
the First Current Outside Date, provided that the Sponsor or its affiliates or permitted designees will deposit into the Trust Account
the lesser of (a) $
In connection with the First Extension Special
Meeting,
On June 21, 2023, the Company issued an aggregate
of
Following the Conversion, and after giving effect
to the Redemptions, there were
On July 17, 2023, the Company’s Board of
Directors authorized the transfer of the listing of its Class A common stock, redeemable warrants, each exercisable to purchase one share
of Class A common stock at a price of $
7
On January 8, 2024, the Company deposited $
On February 9, 2024, the Company deposited $
As approved by the stockholders of the Company, at its special meeting
of stockholders held on March 12, 2024 (the “Second Extension Special Meeting”), the Company filed an amendment to its Charter,
with the Secretary of State of the State of Delaware (the “Amendment”). The Amendment (i) extends the date by which the Company
must consummate its initial Business Combination on a monthly basis for up to nine times by an additional one month each time for a total
of up to nine months from March 14, 2024 (the date which is 27 months from the closing date of the Company’s IPO) (to December 14,
2024 (the date which is 36 months from the closing date of the IPO) provided that the Sponsor or its affiliates or permitted designees
deposits into the Trust Account established by the Company in connection with the IPO the lesser of (a) $
On each of March 13, 2024, April 16, 2024, May
14, 2024, and June 14, 2024, July 10, 2024, August 8, 2024, September 12, 2024, October 15, 2024 and November 11, 2024, the Company deposited
$
On July 26, 2024, the Company issued an unsecured
promissory note to the Sponsor with a principal amount equal to $
On October 9, 2024 (effective on April 10, 2024),
the Company issued an unsecured and non-interest-bearing promissory note to the Sponsor with a principal amount equal to $
On October 21, 2024, the Company received a letter from the NYSE notifying the Company of its past due annual listing fees and that failure to pay the annual listing fees may result in the Company facing disciplinary action from the NYSE Regulation, up to and including delisting from the NYSE American.
On November 20, 2024, the Company received an official notice of noncompliance from the NYSE stating that the Company was not in compliance with NYSE American continued listing standards due to the failure to timely file the Company’s Form 10-Q for the quarter ended September 30, 2024 by the filing due date of November 19, 2024.
On December 4, 2024, the Company, the Sponsor, Ace Green Recycling, Inc., a Delaware corporation (“Ace Green Recycling”) and Project Atlas Merger Sub Inc., a Delaware corporation (“Merger Sub”), entered into a Business Combination Agreement (the “Business Combination Agreement”), pursuant to which, subject to the satisfaction or waiver of certain conditions precedent in the Business Combination Agreement, the following transactions will occur: (a) Merger Sub will merge with and into Ace Green Recycling (the “Merger”), with Ace Green Recycling surviving the Merger as a wholly owned subsidiary of the Company and the security holders of Ace Green Recycling becoming security holders of the Company and (b) the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents referred to therein (together with the Merger, the “Transactions”).
8
As approved by the stockholders of the Company,
at its annual meeting of stockholders held on December 10, 2024 (the “2024 Annual Meeting”), the Company filed an amendment
to the Charter, with the Secretary of State of the State of Delaware (the “New Amendment”). The New Amendment extends the
date by which the Company must consummate a Business Combination on a monthly basis for up to nine times by an additional one month each
time for a total of up to nine months from December 14, 2024 (the date which is 36 months from the closing date of the Company’s
IPO) to September 14, 2025 (the date which is 45 months from the closing date of the IPO, the “Combination Period”), provided
that the Sponsor or its affiliates or permitted designees will deposit into the Trust Account the lesser of (a) $
On December 10, 2024, the Company received a letter from the NYSE stating that the staff of NYSE Regulation determined to commence proceedings to delist the Company’s Class A common stock, units and redeemable warrants, pursuant to Sections 119(b) and 119(f) of the NYSE American Company Guide because the Company failed to consummate a business combination within 36 months of the effectiveness of its initial public offering registration statement, or such shorter period that the Company specified in its registration statement. As a result of the determination, the Listed Securities on NYSE American were suspended from trading on December 10, 2024.
On December 11, 2024, the Company deposited $
On December 19, 2024, NYSE American filed a Form 25 to delist the Listed Securities. Such delisting took effect approximately 10 days after the filing of Form 25, or December 30, 2024. The Company’s Class A common stock, units and redeemable warrants currently trade on the OTC Pink Market under the symbols “ATEK,” “ATEK.U” and “ATEK WS,” respectively.
The Initial Stockholders have agreed to waive
their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination
Period. However, if the Initial Stockholders should acquire Public Shares in or after the IPO, they will be entitled to liquidating distributions
from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination
Period. The underwriters have agreed to waive their rights to its deferred underwriting commission (see Note 6) held in the Trust Account
in the event the Company does not complete a Business Combination within the Combination Period, and, in such event, such amounts will
be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the
event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including
the Trust Account assets) will be only $
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
9
Risks and Uncertainties
On August 16, 2022, President Biden signed into law the Inflation Reduction
Act of 2022 (the “IR Act”), which, among other things, generally imposes a
The imposition of the Excise Tax could cause a reduction in the cash available on hand to complete an initial Business Combination or for effecting redemptions and may affect the ability to complete an initial Business Combination, fund future operations or make distributions to stockholders. In addition, the Excise Tax could cause a reduction in the per share amount payable to Public Stockholders in the event the Company liquidates the Trust Account due to a failure to complete an initial Business Combination within the requisite time frame.
In connection with the stockholders’ vote
at the Special Meeting of Stockholders held on June 13, 2023, there were
In connection with the stockholders’ vote
at the Special Meeting of Stockholders held on March 12, 2024, there were
In connection with the stockholders’ vote at the 2024 Annual
Meeting held on December 10, 2024, there were
Pursuant to Internal Revenue Service regulations,
the Company was required to file a return and remit payment for the 2023 excise tax liability of $
The Company filed a return for the 2023 excise
tax liability on November 5, 2024, and as of the date of this Quarterly Report on Form 10-Q, such excise tax remains unpaid. The Company
is currently evaluating its options with respect to payment of this obligation and additional excise tax payment obligations as a result
of the share redemptions in 2024. If the Company is unable to pay its obligations in full, it will be subject to additional interest
and penalties which are currently estimated at
In October 2023, Israel and certain Iranian-backed Palestinian forces began an armed conflict in Israel, the Gaza Strip, and surrounding areas. In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. Armed conflicts around the world, such as those in Ukraine and Israel, as well as the global response to such conflicts, including the imposition of sanctions by the United States and other countries, could create or exacerbate risks facing the Company’s business. In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a pandemic which quickly spread throughout the United States and the world. These events, compounded with rising interest rates and inflation, have had and may in the future have an adverse impact on global supply chains and capital markets resulting in a weaker macroeconomic environment. Any deterioration in credit markets resulting directly or indirectly from the ongoing Russian invasion of Ukraine or the attack by Hamas on Israel from the Gaza Strip could limit the Company’s ability to obtain external financing to fund operations and capital expenditures. Management continues to evaluate the macroeconomic environment as a result of COVID-19 and the Ukraine and Israel conflicts, and the Company has concluded that while it is reasonably possible that the market conditions could have a negative effect on identifying a target company for a Business Combination, the specific impact is not readily determinable as of the date of the unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
10
Franchise and Income Tax Withdrawals from Trust Account
On June 21, 2023, the Company withdrew from the
Trust Account an aggregate amount of $
On March 19, 2024, the Company withdrew an additional
$
Management determined that this use of funds was
not in accordance with the Trust Agreement. The Company disbursed an aggregate of $
On December 6, 2024, the Company and Sponsor entered
into an Amended and Restated Subscription Agreement (the “Subscription Agreement”) with Polar Multi-Strategy Master Fund (“Polar”)
pursuant to which Polar contributed an additional $
In addition to the amended and restated subscription agreement above, the Company expects it will need to raise additional funds prior to the closing of a Business Combination to satisfy operational costs and closing costs. As of the date of this Quarterly Report on Form 10-Q, the Company has not obtained any commitments to provide additional funds and the Company’s board of directors has not approved any method of funding the Company’s income and franchise tax obligations.
Going Concern Consideration and Capital Resources
As of September 30, 2024, the Company had operating
cash of $
11
In order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may,
but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a
Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.
Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination
does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds
held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital
Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either
be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $
Based on the foregoing, management does not believe that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds to pay existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC 205-40, “Presentation of Financial Statements – Going Concern” (“ASC 205-40”), management has determined that the Company’s liquidity position and mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. The Company intends to complete its initial Business Combination before the mandatory liquidation date; however, there can be no assurance that the Company will be able to consummate any Business Combination by September 14, 2025 (if extended by the full amount of time). No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after September 15, 2025. The Company’s unaudited condensed financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
12
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. Operating results for the three and nine months ended September 30, 2024, are not necessarily indicative of the results that may be expected through December 31, 2024, or any future period.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on September 27, 2024 (the “Annual Report on Form 10-K”).
Emerging Growth Company
The Company is an emerging growth company as defined in Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), which exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised, and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of income and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Actual results could differ from those estimates.
13
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had $
Cash and Cash Equivalents - Restricted
Cash and cash equivalents that are encumbered or otherwise restricted
as to their use are included in cash and cash equivalents – restricted. As of September 30, 2024 and December 31, 2023, the balance
was $
Investments Held in Trust Account
At September 30, 2024 and December 31, 2023, substantially all of the assets held in the Trust Account were held in mutual funds which are invested primarily in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in the Trust Account are included in interest income on investments held in Trust Account in the accompanying unaudited condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
At September 30, 2024 and December 31, 2023, the
Company had $
Offering Costs Associated with the Initial Public Offering
Offering costs for the IPO amounted to $
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal
Deposit Insurance Corporation coverage limit of $
14
Fair Value of Financial Instruments
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on an assessment of the assumptions that market participants would use in pricing the asset or liability.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2024 and December 31, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities since its inception.
15
Class A Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”). Shares of Class A common stock subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable Class A common stock (including Class A common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, Class A common stock is classified as stockholders’ deficit.
The Company’s Class A common stock sold
in the IPO and over-allotment feature certain redemption rights that are considered to be outside of the Company’s control and subject
to occurrence of uncertain future events. In connection with the Special Meeting on June 13, 2023, there were
Under ASC 480-10-S99, the Company has elected to recognize changes in redemption value immediately as they occur and adjust the carrying value of the Class A common stock subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
| Class A common stock subject to possible redemption at January 1, 2023 | $ | | ||
| Less: | ||||
| Redemption of common stock | ( | ) | ||
| Plus: | ||||
| Remeasurement of common stock subject to redemption | ||||
| Class A common stock subject to possible redemption at December 31, 2023 | ||||
| Less: | ||||
| Redemption of common stock | ( | ) | ||
| Plus: | ||||
| Remeasurement of common stock subject to redemption | ||||
| Class A common stock subject to possible redemption at September 30, 2024 | $ |
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Net (Loss) Income per Common Share
The Company has two classes of shares, which are
referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of common
shares. Public Warrants (see Note 3) and Private Placement Warrants (see Note 4) to purchase
| For the Three Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
| Common Stock | Common Stock | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
| Basic and diluted net loss per common share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net loss | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Denominator: | ||||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic and diluted net loss per common share | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| For the Nine Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
| Common Stock | Common Stock | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
| Basic and diluted net (loss) income per common share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net (loss) income | $ | ( | ) | $ | $ | $ | ||||||||||
| Denominator: | ||||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic and diluted net (loss) income per common share | $ | ( | ) | $ | $ | $ | ||||||||||
Accounting for Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”).
The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own common shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the instruments are outstanding. As discussed in Note 7, the Company determined that its Warrants, issued pursuant to the public warrant agreement (as may be amended and restated, the “Public Warrant Agreement”) and private warrant agreement (as may be amended and restated, the “Private Warrant Agreement,” and together with the Public Warrant Agreement, the “Warrant Agreements”), qualify for equity accounting treatment.
Recent Accounting Pronouncements
The Company’s management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
17
Note 3 — Initial Public Offering and Over-Allotment
Pursuant to the IPO, the Company sold
Note 4 — Private Placement
On December 14, 2021, simultaneously with the consummation of the IPO
and the underwriters’ exercise of their over-allotment option, the Company consummated the Private Placement of
Note 5 — Related Party Transactions
Founder Shares
On August 31, 2021, the Sponsor purchased
The Initial Stockholders had agreed to forfeit
up to
The Initial Stockholders have agreed, subject to limited exceptions,
not to transfer, assign or sell any of their Founder Shares until the earlier to occur of (A) one year after the completion of the initial
Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of the Class A common stock equals
or exceeds $
18
Due to Related Party
Due to related party represents payments of Company’s
expenses by the Sponsor on the Company’s behalf, including accrual of unpaid monthly administrative support services fees. As of
September 30, 2024 and December 31, 2023, due to related party amounted to $
Convertible note – related party
On July 26, 2024, the Company issued an unsecured
promissory note to the Sponsor with a principal amount equal to $
Working Capital Loans
In addition, in order to finance transaction costs
in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and
directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company
completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to
the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that
a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital
Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms
of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working
Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion,
up to $
In July 2023, the Company issued an unsecured
promissory note to the Sponsor with a principal amount equal to $
In connection with funding the Notes, on July
5, 2023, the Sponsor entered into a subscription agreement with a third-party investor. Pursuant to the subscription agreement, the Sponsor
will transfer one share of Class A common stock of the Company for each dollar funded upon the closing of a Business Combination. As of
September 30, 2024, such third-party investor loaned $
On October 9, 2024 (effective on April 10, 2024),
the Company issued an unsecured and non-interest-bearing promissory note to the Sponsor with a principal amount equal to $
Total borrowings under the Working Capital Loans
structure as of September 30, 2024 and December 31, 2023 were $
Support Services
The Company has agreed to pay the Sponsor a fee of $
19
Note 6 — Commitments and Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Units and units that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights to require the Company to register a sale of any of the Company’s securities held by them pursuant to a certain registration rights agreement, dated December 9, 2021. These holders will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, these holders will have certain “piggyback” registration rights with respect to registration statements filed subsequent to the Company’s completion of its initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day
option from the final prospectus relating to the IPO to purchase up to
The underwriters were paid a cash underwriting
discount of $
On January 28, 2025, Citigroup Global Markets
Inc., as representative of the underwriters (“Citigroup”), agreed to formally waive the deferred underwriting commissions
of $
Note 7 — Stockholders’ Deficit
Preferred Stock—The Company
is authorized to issue
Class A Common Stock—The Company
is authorized to issue
Class B Common Stock—The Company
is authorized to issue
The Company’s Charter provides that the
shares of Class B common stock will automatically convert into shares of Class A common stock at the time of the initial Business Combination
on a one-for-one basis, subject to adjustment. In the case that additional Class A common stock, or equity-linked securities, are issued
or deemed issued in excess of the amounts offered in the IPO and related to the closing of the initial Business Combination, the ratio
at which Class B common stock shall convert into Class A common stock will be adjusted (unless the holders of a majority of the outstanding
Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares
of Class A common stock issuable upon conversion of all Class B common stock will equal, in the aggregate, on an as-converted basis,
20
Holders of common stock will have the right to elect all of the Company’s directors prior to a Business Combination. Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law.
Warrants—As of September 30,
2024 and December 31, 2023, the Company has
The Company will not be obligated to deliver any shares of common stock pursuant to the exercise of a Warrant and will have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the shares of common stock underlying the Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available.
The Company has agreed that as soon as practicable,
but in no event later than
Once the Warrants become exercisable, the Company may redeem the Warrants:
| ● | in whole and not in part; |
| ● | at
a price of $ |
| ● | upon
not less than |
| ● | if,
and only if, the reported last sale price of the shares of common stock equals or exceeds $ |
If and when the Warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of shares upon exercise of the Warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification.
If the Company calls the Warrants for redemption, management will have the option to require all holders that wish to exercise the Warrants to do so on a “cashless basis,” as described in the Public Warrant Agreement and the Private Warrant Agreement. The exercise price and number of shares of common stock issuable upon exercise of the Warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the Warrants will not be adjusted for issuances of shares of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Warrants will not receive any of such funds with respect to their Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such Warrants. Accordingly, the Warrants may expire worthless.
21
In addition, if (x) the Company issues additional
shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business
Combination at an issue price or effective issue price of less than $
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the IPO, except that the Private Placement Warrants and the shares of common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable at the election of the holder on a “cashless basis”.
Neither the Private Placement Warrants nor the Public Warrants contain any provision that change dependent upon the characteristics of the holder of the Warrant.
Note 8 — Fair Value Measurements
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
As of September 30, 2024 and December 31, 2023,
the assets held in the Trust Account were comprised of $
All of the Company’s investments held in
the Trust Account are classified as trading securities. Net amounts of $
| Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | ||||||||||||
| September 30, 2024 | Level | (Level 1) | (Level 2) | (Level 3) | ||||||||||
| Assets: | ||||||||||||||
| Investment in Trust Account – Money Market Fund | 1 | $ | $ | $ | ||||||||||
| Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | ||||||||||||
| December 31, 2023 | Level | (Level 1) | (Level 2) | (Level 3) | ||||||||||
| Assets: | ||||||||||||||
| Investment in Trust Account – Money Market Fund | 1 | $ | $ | $ | ||||||||||
22
Note 9 — Subsequent Events
The Company has evaluated subsequent events and transactions that occurred after the condensed balance sheet date through the date these unaudited condensed financial statements were issued and determined that there were no subsequent events that would require adjustment or disclosure, except as described below.
Company Funding
On October 9, 2024 (effective on April 10, 2024),
the Company issued an unsecured and non-interest-bearing promissory note to the Sponsor with a principal amount equal to $
On December 6, 2024, the Company and Sponsor entered
into an Amended and Restated Subscription Agreement (the “Subscription Agreement”) with Polar Multi-Strategy Master Fund (“Polar”)
pursuant to which Polar contributed an additional $
NYSE American Notifications and Delisting
On October 21, 2024, the Company received a letter from the NYSE notifying the Company of its past due annual listing fees and that failure to pay the annual listing fees may result in the Company facing disciplinary action from the NYSE Regulation, up to and including delisting from the NYSE American.
On November 20, 2024, the Company received an official notice of noncompliance from the NYSE stating that the Company was not in compliance with NYSE American continued listing standards due to the failure to timely file the Company’s Form 10-Q for the quarter ended September 30, 2024 by the filing due date of November 19, 2024.
On December 10, 2024, the Company received a letter from the NYSE stating that the staff of NYSE Regulation has determined to commence proceedings to delist the Listed Securities pursuant to Sections 119(b) and 119(f) of the NYSE American Company Guide because the Company failed to consummate a Business Combination within 36 months of the effectiveness of its initial public offering registration statement, or such shorter period that the Company specified in its registration statement. As a result of the determination, the Listed Securities on NYSE American were suspended from trading on December 10, 2024.
On December 19, 2024, NYSE American filed a Form 25 to delist the Listed Securities and to remove such securities from registration under Section 12(b) of the Securities Exchange Act of 1934. Such delisting took effect approximately 10 days after the filing of Form 25, or December 30, 2024. The Company’s Class A common stock, Units and Warrants currently trade on the OTC Pink Market under the symbols “ATEK,” “ATEK.U” and “ATEK WS,” respectively.
Charter Amendment and Redemptions
As approved by the stockholders of the Company,
at its 2024 Annual Meeting, the Company filed the New Amendment with the Secretary of State of the State of Delaware. The New Amendment
extends the date by which the Company must consummate a Business Combination on a monthly basis for up to nine times by an additional
one month each time for a total of up to nine months from December 14, 2024 to September 14, 2025, provided that the Sponsor or its affiliates
or permitted designees will deposit into the Trust Account the lesser of (a) $
23
Monthly Extensions
On each of October 15, 2024 and November 11, 2024,
the Company deposited $
On each of December 11, 2024 and January 10, 2025,
the Company deposited $
Proposed Business Combination
Business Combination Agreement
On December 4, 2024, the Company, the Sponsor, Ace Green Recycling and Merger Sub, entered into the Business Combination Agreement, pursuant to which, subject to the satisfaction or waiver of certain conditions precedent in the Business Combination Agreement, the following transactions will occur: (a) Merger Sub will merge with and into Ace Green Recycling, with Ace Green Recycling surviving the Merger as a wholly owned subsidiary of the Company and the security holders of Ace Green Recycling becoming security holders of the Company and (b) the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents referred to therein (together with the Merger, the “Transactions”).
Pursuant to the Business Combination Agreement, at the effective time of the Merger, each outstanding share of common stock of Ace Green Recycling (other than any excluded shares and dissenting shares) shall be converted into the right to receive (i) a number of shares of Company common stock equal to the a specified exchange ratio and (ii) a pro rata portion of any Earnout Shares that the Company is obligated to issue pursuant to the terms of the Business Combination Agreement.
The Business Combination Agreement, subject to
the terms and conditions set forth therein, provides that Athena will issue up to an aggregate
Voting and Support Agreements
In connection with the execution of the Business Combination Agreement, Sponsor entered into a Voting and Support Agreement (the “Sponsor Support Agreement”) with Athena and Ace Green Recycling, pursuant to which Sponsor has agreed to, among other things, (a) vote at any meeting of Athena shareholders to be called for approval of the Business Combination Agreement, the Merger, and the other Transactions all shares of Athena Class A Common Stock (together with any warrants to acquire Athena Class A Common Stock, the “Sponsor Securities”) beneficially owned or thereafter acquired in favor of the Business Combination Agreement, the Merger, and the other Transactions, (b) be bound by certain other covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with respect to the Sponsor Securities, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.
In connection with the execution of the Business Combination Agreement, certain Ace Green Recycling shareholders entered into a Voting and Support Agreement (the “Ace Green Recycling Support Agreement”) with Athena and Ace Green Recycling, pursuant to which each such Ace Green Recycling shareholder has agreed to, among other things, (a) vote at any meeting of Ace Green Recycling’s shareholders to be called for approval of, among other things, the Business Combination Agreement and the Transactions all of such Ace Green Recycling shareholder’s shares of Ace Green Recycling common stock (the “Ace Green Recycling Securities”) beneficially owned or thereafter acquired in favor of the Transactions, (b) be bound by certain other covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with respect to the Ace Green Recycling Securities, in each case, on the terms and subject to the conditions set forth in the Ace Green Recycling Support Agreement.
24
Lock-Up Agreements
In connection with the Closing, certain Ace Green Recycling shareholders will each enter into an agreement (the “Ace Green Recycling Shareholder Lock-Up Agreement”) providing that each such Ace Green Recycling shareholder will not, subject to certain exceptions, transfer its shares of Athena common stock during the period commencing on the closing date of the business combination and ending 180 days thereafter.
In connection with the Closing, Sponsor will enter into an agreement (the “Sponsor Lock-Up Agreement”) providing that Sponsor will not, subject to certain exceptions, transfer its shares of Athena common stock during the period commencing on the closing date of the business combination and ending 180 days thereafter.
New Registration Rights Agreement
The Business Combination Agreement contemplates that, at the Closing, certain Ace Green Recycling equityholders, Sponsor and Athena will enter into a Registration Rights Agreement (the “New Registration Rights Agreement”), pursuant to which Athena will agree to register for resale certain shares of Athena’s common stock and other equity securities of Athena that are held by the parties thereto. Pursuant to the New Registration Rights Agreement, Athena will agree to file a shelf registration statement registering the sale or resale of all of the Registrable Securities (as defined in the New Registration Rights Agreement) within 30 days after the closing date of the business combination. Athena will also agree to provide customary “piggyback” registration rights, subject to certain requirements and customary conditions. The New Registration Rights Agreement will also provide that Athena will pay certain expenses relating to such registrations and indemnify the shareholders against certain liabilities.
Waiver of Deferred Underwriting Fee
On January 28, 2025, Citigroup Global Markets Inc., as representative
of the underwriters (“Citigroup”), agreed to formally waive the deferred underwriting commissions of $
25
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report to “we,” “us,” “Athena,” “SPAC” or the “Company” refer to Athena Technology Acquisition Corp. II. References to our “management” or our “management team” refer to our officers, and references to the “Sponsor” refer to Athena Technology Sponsor II, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding a business combination and related timing and the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Annual Report on Form 10-K”) and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, each filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s SEC filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
Athena Technology Acquisition Corp. II was incorporated in Delaware on May 20, 2021. The Company was formed for the purpose of entering into a merger, stock exchange, asset acquisition, stock purchase, reorganization or other similar business transaction with one or more businesses that the Company has not yet identified (a “Business Combination”).
On April 19, 2023, the Company entered into a business combination agreement with the Air Water Company in order to effect a Business Combination, but then terminated the agreement on December 13, 2023 by entering into a mutual release agreement. On December 4, 2024, the Company, the Sponsor, Ace Green Recycling and Merger Sub, entered into the Business Combination Agreement, pursuant to which, subject to the satisfaction or waiver of certain conditions precedent in the Business Combination Agreement, the following transactions will occur: (a) Merger Sub will merge with and into Ace Green Recycling (the “Merger”), with Ace Green Recycling surviving the Merger as a wholly owned subsidiary of the Company and the security holders of Ace Green Recycling becoming security holders of the Company and (b) the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents referred to therein (together with the Merger, the “Transactions”).
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination with Ace Green Recycling will be successful.
Recent Events
Proposed Business Combination
Pursuant to the Business Combination Agreement, at the effective time of the Merger, each outstanding share of common stock of Ace Green Recycling (other than any excluded shares and dissenting shares) shall be converted into the right to receive (i) a number of shares of Company common stock equal to the a specified exchange ratio and (ii) a pro rata portion of any Earnout Shares that the Company is obligated to issue pursuant to the terms of the Business Combination Agreement.
The Business Combination Agreement, subject to the terms and conditions set forth therein, provides that Athena will issue up to an aggregate 10,500,000 shares of its common stock (the “Earnout Shares”) to Ace Green Recycling’s shareholders and up to an aggregate of 1,500,000 shares of its common stock to Sponsor based on the trading prices of Athena’s common stock during the five-year period following the closing of the Merger (the “Closing”).
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Voting and Support Agreements
In connection with the execution of the Business Combination Agreement, Sponsor entered into a Voting and Support Agreement (the “Sponsor Support Agreement”) with Athena and Ace Green Recycling, pursuant to which Sponsor has agreed to, among other things, (a) vote at any meeting of Athena shareholders to be called for approval of the Business Combination Agreement, the Merger, and the other Transactions all shares of Athena Class A Common Stock (together with any warrants to acquire Athena Class A Common Stock, the “Sponsor Securities”) beneficially owned or thereafter acquired in favor of the Business Combination Agreement, the Merger, and the other Transactions, (b) be bound by certain other covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with respect to the Sponsor Securities, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.
In connection with the execution of the Business Combination Agreement, certain Ace Green Recycling shareholders entered into a Voting and Support Agreement (the “Ace Green Recycling Support Agreement”) with Athena and Ace Green Recycling, pursuant to which each such Ace Green Recycling shareholder has agreed to, among other things, (a) vote at any meeting of Ace Green Recycling’s shareholders to be called for approval of, among other things, the Business Combination Agreement and the Transactions all of such Ace Green Recycling shareholder’s shares of Ace Green Recycling common stock (the “Ace Green Recycling Securities”) beneficially owned or thereafter acquired in favor of the Transactions, (b) be bound by certain other covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with respect to the Ace Green Recycling Securities, in each case, on the terms and subject to the conditions set forth in the Ace Green Recycling Support Agreement.
Lock-Up Agreements
In connection with the Closing, certain Ace Green Recycling shareholders will each enter into an agreement (the “Ace Green Recycling Shareholder Lock-Up Agreement”) providing that each such Ace Green Recycling shareholder will not, subject to certain exceptions, transfer its shares of Athena common stock during the period commencing on the closing date of the business combination and ending 180 days thereafter.
In connection with the Closing, Sponsor will enter into an agreement (the “Sponsor Lock-Up Agreement”) providing that Sponsor will not, subject to certain exceptions, transfer its shares of Athena common stock during the period commencing on the closing date of the business combination and ending 180 days thereafter.
New Registration Rights Agreement
The Business Combination Agreement contemplates that, at the Closing, certain Ace Green Recycling equityholders, Sponsor and Athena will enter into a Registration Rights Agreement (the “New Registration Rights Agreement”), pursuant to which Athena will agree to register for resale certain shares of Athena’s common stock and other equity securities of Athena that are held by the parties thereto. Pursuant to the New Registration Rights Agreement, Athena will agree to file a shelf registration statement registering the sale or resale of all of the Registrable Securities (as defined in the New Registration Rights Agreement) within 30 days after the closing date of the business combination. Athena will also agree to provide customary “piggyback” registration rights, subject to certain requirements and customary conditions. The New Registration Rights Agreement will also provide that Athena will pay certain expenses relating to such registrations and indemnify the shareholders against certain liabilities.
Stockholder Meetings
On March 12, 2024, the Company held a special meeting of its stockholders (the “Second Extension Special Meeting”), at which the stockholders approved proposals to further amend the Charter to (i) further extend the date by which the Company must consummate its initial business combination on a monthly basis for up to nine times by an additional one month each time for a total of up to nine months from March 14, 2024 (the date which is 27 months from the closing date of the Company’s IPO) to December 14, 2024 (the date which is 36 months from the closing date of the IPO) provided that the Sponsor or its affiliates or permitted designees deposit into the Trust Account the lesser of (a) $40,000 and (b) $0.02 for each share of the Company’s common stock issued and outstanding that has not been redeemed in accordance with the terms of the Charter upon the election of each such one-month extension unless the closing of the Company’s initial business combination shall have occurred and (ii) eliminate the limitation that the Company may not redeem public shares in an amount that would cause the Company’s net tangible assets to be less than $5,000,001 immediately prior to or upon consummation of an initial business combination. The Company filed an amendment to the Charter to reflect the accepted proposals on March 12, 2024. In connection with the Second Extension Special Meeting, 910,258 shares of the Company’s Class A common stock were redeemed.
On December 10, 2024, the Company held an annual meeting of its stockholders (the “2024 Annual Meeting”), at which the stockholders approved the proposal to amend the Charter to further extend the date by which the Company must consummate its initial business combination on a monthly basis for up to nine times by an additional one month each time for a total of up to nine months from December 14, 2024 to September 14, 2025, provided that the Sponsor or its affiliates or permitted designees deposit into the Trust Account the lesser of (a) $25,000 and (b) $0.02 for each share of the Company’s common stock issued and outstanding that has not been redeemed in accordance with the terms of the Charter upon the election of each such one-month extension unless the closing of the Company’s initial business combination shall have occurred. The Company filed an amendment to the Charter to reflect the accepted proposals on December 10, 2024. In connection with the 2024 Annual Meeting, 977,625 shares of the Company’s Class A common stock were redeemed.
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Trust Deposits
On January 8, 2024, the Company deposited $60,000 into the Trust Account allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month from January 14, 2024 to February 14, 2024.
On February 9, 2024, the Company deposited $60,000 into the Trust Account allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month from February 14, 2024 to March 14, 2024.
On each of March 13, 2024, April 16, 2024, May 14, 2024, June 14, 2024, July 10, 2024, August 8, 2024, September 12, 2024, October 15, 2024 and November 11, 2024, the Company deposited $25,756 into the Trust Account, or an aggregate of $231,800, allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month from March 14, 2024 to December 14, 2024.
On each of December 11, 2024 and January 10, 2025, the Company deposited $6,203 into the Trust Account, or an aggregate of $12,406, allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month from December 14, 2024 to February 14, 2025.
NYSE American Notifications and Delisting
On July 17, 2023, our Board of Directors authorized the transfer of the listing of our Class A common stock, par value $0.0001 per share (“Class A common stock”), redeemable warrants, each exercisable to purchase one share of Class A common stock at a price of $11.50 per share (the “Warrants”), and units, each consisting of one share of Class A common stock and one-half of one Warrant (the “Units” and together with the Class A common stock and the Warrants, the “Listed Securities”), from the New York Stock Exchange (the “NYSE”) to the NYSE American LLC (the “NYSE American”). The listing and trading of the Listed Securities on the NYSE ended at market close on July 20, 2023, and the trading of the Listed Securities on the NYSE American commenced at market open on July 21, 2023.
On each of April 17, 2024 and November 20, 2024, the Company received an official notice of noncompliance from NYSE Regulation stating that we were not in compliance with NYSE American continued listing standards under the timely filing criteria included in Section 1007 of the NYSE American Company Guide due to the failure to timely file the Annual Report on Form 10-K by the filing due date of April 16, 2024 and Form 10-Q for the quarter ended September 30, 2024 by the filing due date of November 19, 2024, respectively (the “Filing Delinquencies”.) The Company filed its Annual Report on Form 10-K, the Quarterly Report on Form 10-Q for the three months ended March 31, 2024, the Quarterly Report on Form 10-Q for the three months ended June 30, 2024 and this Quarterly Report, and believes it has cured the Filing Delinquencies. . On October 21, 2024, the Company received a letter from the NYSE notifying the Company of its past due annual listing fees. On December 10, 2024, the Company received a letter from the NYSE stating that the staff of NYSE Regulation has determined to commence proceedings to delist the Company’s (i) Class A common stock (ii) Units, and (iii) Warrants pursuant to Sections 119(b) and 119(f) of the NYSE American Company Guide because the Company failed to consummate a Business Combination within 36 months of the effectiveness of its initial public offering registration statement, or such shorter period that the Company specified in its registration statement. As a result of the determination, trading of the Listed Securities on NYSE American was suspended on December 10, 2024. On December 19, 2024, NYSE American filed a Form 25 to delist the Listed Securities and to remove such securities from registration under Section 12(b) of the Securities Exchange Act of 1934. Such delisting took effect approximately 10 days after the filing of Form 25, or December 30, 2024. Our Class A common stock, Units and Warrants currently trade on the OTC Pink Market under the symbols “ATEK,” “ATEK.U” and “ATEK WS,” respectively.
Use of Restricted Funds
Through April 2023, the Company withdrew $356,693 of interest and dividend income earned in the Trust Account for payment of the Company’s 2021 and 2022 franchise tax liabilities. The Company settled the 2021 and 2022 franchise tax liabilities of $356,693 in April 2023.
On June 21, 2023, the Company withdrew from the Trust Account an aggregate amount of $2.4 million to be used for tax purposes. It was determined as of June 30, 2023 that the withdrawal amount was approximately $328,000 in excess of the amount necessary for tax purposes. As a result, the overdrawn amount of $328,000 was allocated back to the contingently redeemable Class A common stock subject to possible redemption and distributed back to the Trust Account on August 17, 2023. As of December 31, 2023, after the overdrawn amount was returned to the Trust Account, approximately $2.1 million of restricted funds remained in the Company’s operating account for future payment of franchise and income taxes (the “Restricted Funds”). On March 19, 2024, the Company withdrew an additional $252,108 from the Trust Account to pay the Company’s franchise and income taxes payable, increasing the Restricted Funds to $2.3 million as of March 31, 2024.
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Though March 31, 2024, the Company used portions of the Restricted Funds to pay for general operating expenses in the aggregate amount of $669,440. Management later determined that this use of Restricted Funds was not in accordance with the Charter and the amended Trust Agreement. On April 10, 2024, the misallocated $669,440 of Restricted Funds was replenished to the Company’s operating account in the form of an intercompany loan made by Sponsor.
On April 3, 2024, the Company paid $720,192 to satisfy income tax liabilities for 2022. On May 16, 2024, the Company paid $820,571 of its 2023 income tax liabilities and on July 22, 2024, the Company paid $79,849 of its 2023 Delaware franchise tax liabilities. During September 2024, the Company paid $658,686 of its 2024 income taxes, inclusive of $43,257 of interest and penalties incurred. As of September 30, 2024, the total amount of prepaid income taxes was $475,743, and the remaining restricted cash balance amounted to $38,231.
Company Funding
On October 9, 2024 (effective on April 10, 2024), the Company issued an unsecured and non-interest-bearing promissory note to the Sponsor with a principal amount equal to $1,500,000 to cover the monthly extension payments of the Company and for working capital purposes. The note is payable in full upon the earlier of (a) April 10, 2026 (b) the date the Company consummates a business combination. The Company drew $800,000 from this note on April 10, 2024 to replenish the misallocated restricted funds.
On December 6, 2024, the Company and Sponsor entered into an Amended and Restated Subscription Agreement (the “Subscription Agreement”) with Polar Multi-Strategy Master Fund (“Polar”) pursuant to which Polar contributed an additional $200,000 to Sponsor (for an aggregate of $500,000, such funded amounts, the “Polar Capital Investment”), which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the Company must consummate an initial Business Combination and to cover working capital expenses. The Subscription Agreement provides that in connection with the Polar Capital Investment, the Company will repay the entire balance of the Polar Capital Investment to Polar within five business days of the closing of an initial Business Combination of the Company and that Sponsor will transfer and/or the Company will issue on Sponsor’s behalf an additional 200,000 shares of Class A common stock to Polar immediately prior to the closing of an initial Business Combination of the Company (for an aggregate of 500,000 shares to be transferred and/or issued to Polar).
Results of Operations
We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from May 20, 2021 (inception) through September 30, 2024 were organizational activities and those necessary to prepare for our initial public offering, described below, and since our initial public offering, the search for a prospective initial business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination, at the earliest. We generate non-operating income in the form of interest income from the proceeds of our initial public offering placed in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a business combination.
For the three months ended September 30, 2024, we had a net loss of $314,920, which consisted of operating expenses of $467,928 and income tax expenses of $38,553, offset by interest income on investments held in the Trust Account of $191,561.
For the nine months ended September 30, 2024, we had a net loss of $1,151,865, which consisted of operating expenses of $1,656,769, finance cost of $59,940 and income tax expenses of $139,657, offset by interest income on investments held in the Trust Account of $704,501.
For the three months ended September 30, 2023, we had a net loss of $548,195, which consisted of finance cost of $89,910, operating expenses of $702,851 and income tax expenses of $59,136, offset by interest income on investment held in the Trust Account of $303,702.
For the nine months ended September 30, 2023, we had a net income of $1,257,443, which consisted of interest income on investment held in the Trust Account of $5,690,465, offset by operating expenses of $3,176,587, finance cost of $89,910 and income tax expenses of $1,166,525.
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Liquidity and Capital Resources
The securities in our initial public offering were registered under the Securities Act on a Registration Statement on Form S-1 (Registration No. 333-261287). The Registration Statement on Form S-1, as amended (the “Registration Statement”), for the Company’s initial public offering was declared effective on December 9, 2021. On December 14, 2021, the Company consummated its initial public offering of 25,000,000 units. Each unit consists of one share of Class A common stock and one-half of one redeemable warrant, with each warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds of $250,000,000.
Simultaneously with the closing of our initial public offering, we consummated the sale of 950,000 private placement units at a price of $10.00 per private placement unit in a private placement with our Sponsor, generating gross proceeds of $9,500,000.
Subsequent to the closing of our initial public offering, we consummated the closing of the sale of 375,000 additional units upon receiving notice of the underwriter’s election to partially exercise their over-allotment option, generating additional gross proceeds of $3,750,000. Simultaneously with the exercise of the over-allotment, we consummated the private placement of an additional 3,750 private placement units to our Sponsor, generating gross proceeds of $37,500.
Offering costs for our initial public offering amounted to $14,420,146, consisting of $5,000,000 of underwriting fees, $8,956,250 of deferred underwriting fees payable (which are held in the Trust Account) and $463,896 of other costs. The $8,956,250 of deferred underwriting fee payable is contingent upon the consummation of a business combination by December 14, 2024, subject to the terms of the underwriting agreement.
Following the closing of the initial public offering and partial exercise of the over-allotment, $256,287,500 of the net proceeds from the initial public offering (including the over-allotment units) and a portion of the private placement units was placed in the Trust Account and invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 of the Investment Company Act, which invest only in direct U.S. government treasury obligations, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the Trust Account, as described below.
As of September 30, 2024, the accumulated interest income earned on investments held in Trust Account amounted to $10,411,560 and total amounts withdrawn from the Trust Account to pay the Company’s franchise and income tax obligations amounted to $2,674,222 (net of approximately $328,000 cash deposited to Trust Account to refund the over withdrawal). In connection with the First Extension Special Meeting held on June 13, 2023, there were 23,176,961 shares of the Company’s Class A common stock redeemed. On June 21, 2023, $239,604,919 was withdrawn from the Trust Account to pay the redeeming holders and the 23,176,961 shares of the Company’s Class A common stock that were redeemed were cancelled. In connection with the Second Extension Special Meeting held on March 12, 2024, there were 910,258 shares of the Company’s Class A common stock redeemed. On April 5, 2024, $10,179,663 was withdrawn from the Trust Account to pay the redeeming holders and the 910,258 shares of the Company’s Class A common stock that were redeemed were cancelled.
Through March 31, 2024, the Company used portions of the Restricted Funds to pay for general operating expenses in the aggregate amount of $669,440. Management later determined that this use of Restricted Funds was not in accordance with the Charter and the amended Trust Agreement. On April 10, 2024, the misallocated $669,440 of Restricted Funds was replenished to the Company’s operating account in the form of an intercompany loan made by Sponsor. On April 3, 2024, the Company paid $720,192 to satisfy income tax liabilities for 2022. On May 16, 2024, the Company paid $820,571 of its 2023 income tax liabilities and on July 22, 2024, the Company paid $79,849 of its 2023 Delaware franchise tax liabilities. During September 2024, the Company paid $658,686 of its 2024 income taxes, inclusive of $43,257 of interest and penalties incurred. As of September 30, 2024, the total amount of prepaid income taxes was $475,743, and the remaining restricted cash balance amounted to $38,231.
For the nine months ended September 30, 2024, cash used in operating activities was $2,756,485. Net loss of $1,151,865 was reduced by interest income on investments held in Trust Account of $704,501 and increased by finance costs – discount on debt issuance of $59,940 and expenses paid by related party of $133,221. Changes in operating assets and liabilities used $1,093,280 of cash for operating activities.
For the nine months ended September 30, 2023, cash used in operating activities was $806,662. Net income of $1,257,443 was reduced by interest income on investments held in Trust Account of $5,690,465 and increased by finance costs – discount on debt issuance of $89,910. Changes in operating assets and liabilities provided $3,536,450 of cash for operating activities.
In connection with the stockholders’ vote at the Special Meeting of Stockholders held on June 13, 2023, there were 23,176,961 shares tendered for redemption and approximately $239,604,919 was paid out of the Trust Account to the redeeming stockholders. The Company has recorded 1% excise tax based on the amount redeemed or an aggregate amount of $2,396,049 excise tax payable as of December 31, 2023.
In connection with the stockholders’ vote at the Special Meeting of Stockholders held on March 12, 2024, there were 910,258 shares tendered for redemption and approximately $10,179,663 was paid out of the Trust Account on April 5, 2024 to the redeeming stockholders. The Company has recorded 1% excise tax based on the amount redeemed or an aggregate amount of $101,797. As of September 30, 2024, the Company’s excise tax payable amounted to $2,497,846.
In connection with the stockholders’ vote at the 2024 Annual Meeting held on December 10, 2024, there were 977,625 shares tendered for redemption and approximately $ 11,497,959 was paid out of the Trust Account on December 11, 2024 to the redeeming stockholders. The Company has recorded 1% excise tax based on the amount redeemed or an aggregate amount of $114,980 excise tax payable. As of December 31, 2024, the Company’s aggregate excise tax payable amounted to $2,612,816.
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Pursuant to Internal Revenue Service regulations, the Company was required to file a return and remit payment for the 2023 excise tax liability of $2,396,049 on or before October 31, 2024. The Company will be required to file a return and remit payment for the 2024 excise tax liabilities on or before April 30, 2025.
The Company filed a return for the 2023 excise tax liability on November 5, 2024, and as of the date of this Quarterly Report on Form 10-Q, such excise tax remains unpaid. The Company is currently evaluating its options with respect to payment of this obligation and additional excise tax payment obligations as a result of the share redemptions in 2024. If the Company is unable to pay its obligations in full, it will be subject to additional interest and penalties which are currently estimated at 10% interest per annum and a 0.5% underpayment penalty per month or portion of a month up to 25% of the total liability for any amount that is unpaid from the due date of payment until paid in full.
At September 30, 2024, we had investments held in the Trust Account of $14,960,544. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable), to complete our business combination. We may withdraw interest from the Trust Account to pay our taxes. We estimate our annual franchise tax obligations, based on the number of shares of Athena common stock authorized and outstanding as of the date of this filing, to be approximately $63,600, which we may pay from funds from the initial public offering held outside of the Trust Account or from interest earned on the funds held in the Trust Account and released to us for this purpose. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust Account. We expect the interest earned on the amount in the Trust Account will be sufficient to pay our franchise and income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
However, as the Trust Account balance may not be sufficient after the payment of our annual taxes, the Company will likely need to raise additional funds prior to the closing of a Business Combination to satisfy further tax liabilities, operational costs and closing costs. In the event that a Business Combination does not close, any loan made to the Company for the purpose of paying overdue tax obligations would be repaid only out of funds held outside the Trust Account. As of the date of this Quarterly Report on Form 10-Q, the Company has not obtained any commitments to provide additional funds and the Company’s board of directors has not approved any method of funding the Company’s further tax and cost obligations.
At September 30, 2024, we had operating cash of $159,864, restricted cash and cash equivalents to pay tax obligations of $38,231 and a working capital deficit of $7,631,838. As of September 30, 2024, approximately $1,457,293 of the amount on deposit in the Trust Account represented interest income, which is available to pay the Company’s tax obligations.
In order to fund working capital deficiencies or finance transaction costs in connection with a business combination, the Sponsor, or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a business combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a business combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a business combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into units of the post business combination entity at a price of $10.00 per unit. The units would be identical to the private placement units. As of September 30, 2024 and December 31, 2023, there were $1,100,000 and $360,060, respectively, Working Capital Loans outstanding.
On July 26, 2024, the Company issued an unsecured promissory note to the Sponsor with a principal amount equal to $422,182. The Note is non-interest bearing and payable on the earlier of July 26, 2026 or the Company’s initial Business Combination. The Note may be converted into equity securities of the Company on mutually agreeable terms if consented to in writing by the Sponsor. As of September 30, 2024, the Company received the full principal amount of $422,182 under this Note.
On December 6, 2024, the Company and Sponsor entered into the Subscription Agreement with Polar pursuant to which Polar contributed an additional $200,000 to Sponsor (for an aggregate of $500,000), which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the Company must consummate an initial Business Combination and to cover working capital expenses. The Subscription Agreement provides that in connection with the Polar Capital Investment, the Company will repay the entire balance of the Polar Capital Investment to Polar within five business days of the closing of an initial Business Combination of the Company and that Sponsor will transfer and/or the Company will issue on Sponsor’s behalf an additional 200,000 shares of Class A common stock to Polar immediately prior to the closing of an initial Business Combination of the Company (for an aggregate of 500,000 shares to be transferred and/or issued to Polar).
In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC 205-40, “Presentation of Financial Statements - Going Concern” (“ASC 205-40”), management has determined that the Company’s liquidity position and mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. The Company intends to complete its initial Business Combination before the mandatory liquidation date; however, there can be no assurance that the Company will be able to consummate any Business Combination by September 14, 2025 (if extended by the full amount of time). No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after September 14, 2025. The unaudited condensed financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
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Off-Balance Sheet Arrangements
We have no obligations, assets, or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2024. We do not participate in transactions that create relationships with entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay our Sponsor a monthly fee of $10,000 for office space, and administrative and support services, provided to the Company. We began incurring these fees on December 9, 2021, and will continue to incur these fees monthly until the earlier of the completion of a Business Combination and the Company’s liquidation.
The underwriters are entitled to deferred underwriting commissions of $0.35 per unit ($0.55 per unit from the over-allotment units), or $8,956,250 from the closing of the initial public offering and the over-allotment units. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a business combination, subject to the terms of the underwriting agreement.
The holders of Founder Shares, Private Placement Units and units that may be issued upon conversion of Working Capital Loans, if any, are entitled to registration rights pursuant to a certain registration rights agreement, dated December 9, 2021. These holders are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, these holders will have certain “piggyback” registration rights with respect to registration statements filed subsequent to the Company’s completion of its initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We have elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.
Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of executive compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an “emerging growth company,” whichever is earlier.
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Critical Accounting Policies and Estimates
The preparation of unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Common Stock Subject to Possible Redemption
We account for our common stock subject to possible redemption in accordance with the guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”). Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ deficit section of our condensed balance sheets. This method would view the end of the reporting period as if it were also the redemption date for the security. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital and accumulated deficit.
Net Income (loss) Per Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding during the period. The Company has two classes of shares, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of shares. Public Warrants (see Note 3 to the unaudited condensed financial statements) and Private Placement Warrants (see Note 4 to the unaudited condensed financial statements) to purchase 13,164,375 shares of Class A common stock at $11.50 per share were issued on December 14, 2021. At September 30, 2024 and December 31, 2023, no Public Warrants or Private Placement Warrants have been exercised. The 13,164,375 potential shares of Class A common stock for outstanding Public Warrants and Private Placement Warrants to purchase the Company’s stock were excluded from diluted earnings per share for the period ended September 30, 2024 and 2023 because they are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income (loss) per common stock is the same as basic net income (loss) per common stock for the period.
Accounting for Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own shares of common stock and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the instruments are outstanding. As discussed in Note 7 to the unaudited condensed financial statements, the Company determined that upon review of the warrant agreements, the public warrants and private placement warrants issued pursuant to the warrant agreements qualify for equity accounting treatment.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company,” we are not required to provide the information called for by this Item 3.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2024. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of the end of the period covered by this Quarterly Report due to the material weakness described below.
Material Weakness
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its financial statements would not be prevented or detected on a timely basis. These deficiencies could result in additional material misstatements to our financial statements that could not be prevented or detected on a timely basis.
The following deficiencies resulted in the Company’s inability to timely file its Annual Report on Form 10-K, the Form 10-Q for the three months ended March 31, 2024, the Form 10-Q for the three months ended June 30, 2024 and this Form 10-Q, and resulted in a material weakness in our internal control over financial reporting:
Through March 31, 2024, the Company used portions of the Restricted Funds to pay for general operating expenses in the aggregate amount of $669,440. Management later determined that this use of Restricted Funds was not in accordance with the Charter and the amended Trust Agreement. On April 10, 2024, the misallocated $669,440 of Restricted Funds was replenished to the Company’s operating account in the form of an intercompany loan made by Sponsor.
On April 3, 2024, the Company paid $720,192 to satisfy income tax liabilities for 2022. On May 16, 2024, the Company paid $820,571 of its 2023 income tax liabilities and on July 22, 2024, the Company paid $79,849 of 2023 Delaware franchise tax liabilities. During September 2024, the Company paid $658,686 of its 2024 income taxes, inclusive of $43,257 of interest and penalties incurred.
In connection with the preparation of the Company’s financial statements as of and for the year ended December 31, 2023, the Audit Committee of the Board of Directors, in consultation with management, determined that the Company should restate its previously issued unaudited condensed financial statements contained in its Quarterly Report on Form 10-Q for the three months ended September 30, 2023. During 2023, the Company withdrew funds from the Trust Account, which was restricted for payment of tax liabilities, and determined that approximately $1.5 million of the funds withdrawn from the Trust Account were incorrectly recorded as a component of Investments held in Trust Account when such funds should have been recorded and presented as a component of restricted cash as of September 30, 2023. This resulted in a restatement of restricted cash and investments held in Trust Account. In connection with the change in presentation for restricted cash and Trust Account, the Company also restated the cash flow statement to properly present the amount of cash withdrawn from the Trust Account to pay franchise and income taxes.
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Remediation Efforts to Address the Identified Material Weakness
To address the material weakness, management has devoted, and plans to continue to devote, significant effort and resources to the remediation and improvement of its internal control over financial reporting. In particular, management’s plans include enhanced controls and improved internal communications within the Company and its financial reporting advisors related to the identification of any new contractual arrangements, as well as controls to ensure the Company has oversight of the cash availability for operating needs, including more clearly designating in the Company’s internal books and records the cash that is restricted in its use and the implementation of an additional layer of review of payments for operating expenses to ensure that restricted cash is not used for payment of general operating expenses, and conducting remedial training for management, relevant staff and service providers to reiterate and reinforce the terms of the Trust Agreement. Management’s remediation plan also includes the addition of a control requiring the Company’s audit committee to approve any withdrawals from the Trust Account and requiring the placement of such withdrawn funds in a restricted account for the payment of taxes. To address the material weakness identified in connection with the Company’s financial statements, management has added a control requiring enhanced documentation of discussions between management, the Company’s advisors and the Company’s audit committee regarding the proper usage of the cash withdrawn from the Trust Account.
As of September 30, 2024, we continue to implement our remediation plan and we believe we have put in place the processes, procedures and reviews necessary to address the material weakness, however until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively, the material weaknesses will not be considered remediated. We can offer no assurance that these initiatives will ultimately have the intended effects. We are committed to the continuous improvement of our internal control over financial reporting and will continue to diligently review our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting
Except as described above under “Remediation Efforts to Address the Identified Material Weakness,” there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended September 30, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Factors that could cause our actual results to differ materially from those in this Quarterly Report on Form 10-Q are any of the risks described in our Annual Report on Form 10-K or subsequent Quarterly Reports on Form 10-Q. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, except as set forth below, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K or in our subsequent Quarterly Reports on Form 10-Q.
Our securities have been delisted from trading on NYSE American, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
On December 19, 2024, NYSE American filed a Form 25 to delist the Company’s securities and to remove such securities from registration under Section 12(b) of the Securities Exchange Act of 1934. Such delisting took effect approximately 10 days after the filing of Form 25, or December 30, 2024. Our Class A common stock, Units and Warrants currently trade on the OTC Pink Market under the symbols “ATEK,” “ATEK.U” and “ATEK WS,” respectively. The Company remains subject to the periodic reporting requirements of the Exchange Act. Because our securities were delisted from NYSE American and are no longer listed on a national securities exchange, we may face significant material adverse consequences, including: (i) a limited availability of market quotations for our securities, (ii) reduced liquidity for our securities, and (iii) a less attractive acquisition vehicle to a target business in connection with an initial business combination.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Class A common stock, Units and Warrants were delisted from NYSE American and trade on the OTC Pink Market, our Class A common stock, Units and Warrants do not qualify as covered securities under the Securities Act and we are subject to regulation in each state in which we offer our securities. Public shareholders who do not elect to redeem their Public Shares in connection with the shareholder meeting to approve the Business Combination may be unable to recover their investment except through sales of our shares on the open market or upon our liquidation or redemption of shares. The price of our shares may be volatile, and there can be no assurance that shareholders will be able to dispose of our shares at favorable prices, or at all.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The securities sold in the IPO were registered under the Securities Act on a registration statement on Form S-1 (Registration No. 333-261287). The Registration Statement on Form S-1, as amended (the “Registration Statement”), for the Company’s IPO was declared effective on December 9, 2021. On December 14, 2021, the Company consummated the IPO of 25,000,000 Units. Each Unit consists of one Public Share and one-half of a Public Warrant. The Units were sold at a price of $10.00 per Unit, generating gross proceeds of $250,000,000, which is discussed in Note 3.
Simultaneously with the closing of the IPO, the Company consummated the sale of 950,000 Private Placement Units at a price of $10.00 per Private Placement Unit in a private placement to the Company’s Sponsor, generating gross proceeds of $9,500,000 which is described in Note 4.
Subsequent to the closing of the IPO, the Company consummated the closing of the sale of 375,000 Over-allotment Units upon receiving notice of the underwriter’s election to partially exercise its over-allotment option, generating additional gross proceeds of $3,750,000. Simultaneously with the exercise of the over-allotment, the Company consummated the Private Placement of an additional 3,750 Private Placement Units to the Sponsor, generating gross proceeds of $37,500.
Offering costs for the IPO and the exercise of the underwriters’ Over-allotment Units amounted to $14,420,146, consisting of $5,075,000 of underwriting fees, $8,881,250 of deferred underwriting fees payable (which are held in the Trust Account) and $463,896 of other costs. As described in Note 6, the $8,956,250 of deferred underwriting fee payable is contingent upon the consummation of a Business Combination by September 14, 2025, subject to the terms of the underwriting agreement.
Following the closing of the IPO and exercise of the over-allotment, $256,287,500 of the net proceeds from the IPO (including the Over-allotment Units) and the Private Placement Units was placed in a Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account.
We paid a total of $5,000,000 underwriting discounts and commissions and $463,896 for other offering costs and expenses related to the IPO. In addition, the underwriters agreed to defer $8,956,250 in underwriting discounts and commissions until consummation of a Business Combination as described above.
For a description of the use of the proceeds generated in our IPO, see Part I, Item 2 of this Quarterly Report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith. |
| ** | Furnished herewith |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ATHENA TECHNOLOGY ACQUISITION CORP. II | ||
| Date: February 7, 2025 | By: | /s/ Isabelle Freidheim |
| Name: | Isabelle Freidheim | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| ATHENA TECHNOLOGY ACQUISITION CORP. II | ||
| Date: February 7, 2025 | By: | /s/ Jennifer Calabrese |
| Name: | Jennifer Calabrese | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer and Authorized Signatory) | ||
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Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Isabelle Freidheim, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Athena Technology Acquisition Corp. II; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: February 7, 2025
| By: | /s/ Isabelle Freidheim | |
| Name: | Isabelle Freidheim | |
| Title: | Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) AND
15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Jennifer Calabrese, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Athena Technology Acquisition Corp. II; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: February 7, 2025
| By: | /s/ Jennifer Calabrese | |
| Name: | Jennifer Calabrese | |
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Athena Technology Acquisition Corp. II (the “Company”) for the quarterly period ended September 30, 2024, as filed with the Securities and Exchange Commission (the “Report”) on the date hereof, the undersigned officer of the Company certifies, pursuant to 18 U.S.C. §1350, as adopted by §906 of the Sarbanes-Oxley Act of 2002, that to such officer’s knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 7, 2025
| By: | /s/ Isabelle Freidheim | |
| Name: | Isabelle Freidheim | |
| Title: | Chief Executive Officer (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Athena Technology Acquisition Corp. II (the “Company”) for the quarterly period ended September 30, 2024, as filed with the Securities and Exchange Commission (the “Report”) on the date hereof, the undersigned officer of the Company certifies, pursuant to 18 U.S.C. §1350, as adopted by §906 of the Sarbanes-Oxley Act of 2002, that to such officer’s knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 7, 2025
| By: | /s/ Jennifer Calabrese | |
| Name: | Jennifer Calabrese | |
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |