Athena Technology Acquisition Corp. II Reports Significant Financial Changes, Net Loss, and Doubt Over Going Concern

Athena Technology Acquisition Corp. II reported significant financial changes in its 10-Q filing for the quarter ending March 31, 2024. Total current assets surged to $12.1 million from $1.9 million as of December 31, 2023, while total assets increased slightly to $26.5 million. However, total current liabilities rose sharply to $18.6 million, leading to a total liabilities increase to $27.6 million, resulting in a worsening stockholders’ deficit of $(16.1 million).

For the three months ended March 31, 2024, the company experienced a net loss of $(601,527), a stark contrast to the net income of $1.7 million reported in the same period of 2023. Operating expenses rose to $801,272 from $495,064 year-over-year, primarily driven by increased general and administrative costs, which reached $775,776 compared to $388,924 in the prior year. Additionally, total other income plummeted to $258,926 from $2.8 million, contributing to the overall loss.

Cash flow analysis revealed that net cash used in operating activities improved to $(238,842) from $(457,070) in the previous year. The company also reported a decrease in cash and cash equivalents, with restricted cash at $1.6 million as of March 31, 2024, down from $1.8 million at the end of 2023. The Trust Account held investments totaling $14.4 million, a significant drop from $24.4 million, reflecting withdrawals for tax obligations and share redemptions.

Athena Technology Acquisition Corp. II is actively seeking a new target for its initial business combination after a previous agreement with Air Water Company was terminated in December 2023. The company has extended its deadline for completing a business combination to December 14, 2024, with provisions for monthly extensions. During the quarter, 910,258 shares of Class A common stock were redeemed, resulting in a withdrawal of $10.2 million from the Trust Account.

Management has expressed substantial doubt regarding the company's ability to continue as a going concern due to its liquidity position and the mandatory liquidation deadline. The company is classified as an emerging growth company, allowing it to delay compliance with certain financial accounting standards. Furthermore, a material weakness in internal control over financial reporting was identified, prompting management to implement remediation efforts to enhance oversight and prevent misallocation of funds.