UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-41241

HCM ACQUISITION CORP

(Exact Name of Registrant as Specified in Its Charter)

Cayman Islands		98-1581263
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

100 First Stamford Place, Suite 330

Stamford, CT 06902

(Address of principal executive offices)

(203) 930-2200

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one Class A ordinary share and one-half of one Redeemable Warrant	HCMAU	The Nasdaq Stock Market LLC
Class A Ordinary Shares, par value $0.0001 per share	HCMA	The Nasdaq Stock Market LLC
Redeemable Warrants, each whole warrant exercisable for one Class A ordinary share at a price of $11.50 per share	HCMAW	The Nasdaq Stock Market LLC

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. Yes ☒ No ☐

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). Yes ☒ No ☐

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 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	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

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 ☒ No ☐

As of May 12, 2023, there were 14,066,906 Class A ordinary shares, par value $0.0001 per share, and 75,000 Class B ordinary shares, par value $0.0001 per share, issued and outstanding.

HCM ACQUISITION CORP

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2023

TABLE OF CONTENTS

		Page
Part I. Financial Information
	Item 1. Financial Statements
	Condensed Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	1
	Condensed Statements of Operations for the three months ended March 31, 2023 and 2022 (Unaudited)	2
	Condensed Statements of Changes in Shareholders’ Deficit for the three months ended March 31, 2023 and 2022 (Unaudited)	3
	Condensed Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (Unaudited)	4
	Notes to Condensed Financial Statements (Unaudited)	5
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk	20
	Item 4. Controls and Procedures	20
Part II. Other Information
	Item 1. Legal Proceedings	21
	Item 1A. Risk Factors	21
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22
	Item 3. Defaults Upon Senior Securities	22
	Item 4. Mine Safety Disclosures	22
	Item 5. Other Information	22
	Item 6. Exhibits	22
Part III. Signatures		23

	March 31, 2023			December 31, 2022
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	467,492		$	792,423
Prepaid expenses		200,813			187,750
Total Current Assets		668,305			980,173
Cash and marketable securities held in trust account		300,037,814			297,619,343
Total Assets	$	300,706,119		$	298,599,516

LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO REDEMPTION AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accrued expenses	$	2,561,862		$	1,213,665
Accrued offering costs		—			70,000
Advance from related parties		385			—
Total current liabilities		2,562,247			1,283,665

Warrant liabilities		821,250			547,500
Deferred underwriting fee payable		3,000,000			15,125,000
Total Liabilities		6,383,497			16,956,165

CLASS A ORDINARY SHARES SUBJECT TO REDEMPTION
Class A ordinary shares subject to possible redemption; 28,750,000 shares issued and outstanding at redemption value at March 31, 2023 and December 31, 2022, respectively		300,037,814			297,619,343

Shareholders’ Deficit
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding		—			—
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 28,750,000 issued and outstanding (excluding 28,750,000 shares subject to possible redemption) at March 31, 2023 and December 31, 2022, respectively		—			—
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 10,062,500 shares issued and outstanding		1,006			1,006
Additional paid-in capital		11,827,938			—
Accumulated deficit		(17,544,136	)		(15,976,998	)
Total Shareholders’ Deficit		(5,715,192	)		(15,975,992	)
Total Liabilities, Class A Ordinary Shares Subject to Redemption and Shareholders’ Deficit	$	300,706,119		$	298,599,516

	Three Months Ended March 31,
	2023			2022
Operating and formation costs	$	1,590,450		$	406,424
Loss from operations		(1,590,450	)		(406,424	)

Other income:
Reduction of deferred underwriting fee		297,062			—
Interest earned on marketable securities held in Trust Account		2,418,471			95,502
Unrealized gain on marketable securities held in Trust Account		—			12,443
Change in fair value of warrant liabilities		(273,750	)		7,938,750
Transaction cost incurred in connection with Initial Public Offering		—			(536,190	)
Other income, net		2,441,783			7,510,505

Net income	$	851,333		$	7,104,081

Basic and diluted weighted average shares outstanding, Class A ordinary shares		28,750,000			20,763,889
Basic and diluted net income per share, Class A ordinary shares	$	0.02		$	0.23
Basic and diluted weighted average shares outstanding, Class B ordinary shares		10,062,500			9,697,917
Basic and diluted net income per share, Class B ordinary shares	$	0.02		$	0.23

	Class B Ordinary Shares				Additional Paid-in Capital		Accumulated Deficit			Total Shareholders’ Deficit
	Shares		Amount
Balance — January 1, 2023		10,062,500	$	1,006	$	—	$	(15,976,998	)	$	(15,975,992	)

Accretion for Class A ordinary shares to redemption amount		—		—		—		(2,418,471	)		(2,418,471	)

Reduction of Deferred Underwriting Fee		—		—		11,827,938		—			11,827,938

Net income		—		—		—		851,333			851,333

Balance — March 31, 2023		10,062,500	$	1,006	$	11,827,938	$	(17,544,136	)	$	(5,715,192	)

	For the Three Months Ended March 31, 2023			For the Three Months Ended March 31, 2022
Cash Flows from Operating Activities:
Net income	$	851,333		$	7,104,081
Adjustments to reconcile net income to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(2,418,471	)		(95,502	)
Reduction of deferred underwriting fees		(297,062	)		—
Unrealized loss on marketable securities held in Trust Account		—			(12,443	)
Change in fair value of warrant liabilities		273,750			(7,938,750	)
Transaction cost incurred in connection with IPO		—			536,190
Changes in operating assets and liabilities:
Prepaid expenses		(13,063	)		(391,353	)
Accrued expenses		1,348,197			286,389
Net cash used in operating activities		(255,316	)		(511,388	)

Cash Flows from Investing Activities:
Investment of cash in Trust Account		—			(293,250,000	)
Net cash used in investing activities		—			(293,250,000	)

Cash Flows from Financing Activities:
Proceeds from sale of Units, net of underwriting discounts paid		—			282,500,000
Proceeds from sale of Private Placements Warrants		—			13,000,000
Advance from related parties		385			—
Proceeds from promissory note - related party		—			41,615
Repayment of promissory note – related party		—			(250,115	)
Payment of offering costs		(70,000	)		(340,461	)
Net cash (used in) provided by financing activities		(69,615	)		294,951,039

Net Change in Cash		(324,931	)		1,189,651
Cash – Beginning of period		792,423			158
Cash – End of period	$	467,492		$	1,189,809

Non-Cash investing and financing activities:
Offering costs included in accrued offering costs	$	—		$	88,589
Change in value of Class A ordinary share subject to possible redemption	$	2,418,471		$	—
Initial classification of Class A ordinary share subject to possible redemption	$	—		$	293,250,000
Reduction of deferred underwriting fees	$	11,827,938		$	—
Deferred underwriting fee payable	$	—		$	15,125,000

Gross proceeds	$	287,500,000
Less:
Proceeds allocated to Public Warrants		(7,043,750	)
Class A ordinary shares issuance costs		(20,235,416	)
Plus:
Accretion of carrying value to redemption value		33,029,166
Remeasurement of carrying value to redemption value		4,369,343
Class A ordinary shares subject to possible redemption, December 31, 2022	$	297,619,343
Plus:
Remeasurement of carrying value to redemption value		2,418,471
Class A ordinary shares subject to possible redemption, March 31, 2023	$	300,037,814

	Three Months Ended March 31, 2023				Three Months Ended March 31, 2022
	Class A		Class B		Class A		Class B
Basic and diluted net income per ordinary share
Numerator:
Allocation of net income, as adjusted	$	630,617	$	220,716	$	4,842,403	$	2,261,678
Denominator:
Basic and diluted weighted average shares outstanding		28,750,000		10,062,500		20,763,889		9,697,917
Basic and diluted net income per ordinary share	$	0.02	$	0.02	$	0.23	$	0.23

Description	Level		March 31, 2023		December 31, 2022
Assets:
Money Market		1	$	350,000	$	—
Cash and marketable securities held in Trust Account		1	$	300,037,814	$	297,619,343

Liabilities:
Warrant liability – Public Warrants		1		431,250		287,500
Warrant liability – Private Placement Warrants		3		390,000		260,000

	March 31, 2023			December 31, 2022
Stock price	$	10.44		$	10.26
Exercise price	$	11.50		$	11.50
Expected term (in years)		5.0			5.0
Volatility		6.7	%		5.9	%
Risk-free rate		4.81	%		4.69	%
Dividend yield		0.0	%		0.0	%

	Private Placement			Public			Warrant Liabilities
Initial measurement on January 25, 2022	$	6,370,000		$	7,043,750		$	13,413,750
Change in fair value		(6,110,000	)		(4,168,750	)		(10,278,750	)
Transfer to Level 1		—			(2,875,000	)		(2,875,000	)
Fair value as of December 31, 2022	$	260,000		$	—		$	260,000
Change in fair value		130,000			—			130,000
Fair value as of March 31, 2023	$	390,000		$	—		$	390,000

No.	Description of Exhibit
31.1*	Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

SEC Form 10-Q filed by HCM Acquisition Corp