Inflection Point Acquisition Corp. II Reports Financial Results, Enters Business Combination Agreement with USA Rare Earth

Inflection Point Acquisition Corp. II, a special purpose acquisition company (SPAC) incorporated on March 6, 2023, reported its financial results for the period ending September 30, 2024. The company has 25 million Class A ordinary shares and 6.25 million Class B ordinary shares outstanding. As of September 30, 2024, the company held cash of $141,201, a significant decrease from $275,665 at the end of 2023. Total current assets also fell to $222,948 from $499,659 during the same period. However, total assets increased to $269.36 million from $259.47 million, primarily due to investments in marketable securities.

The company reported a net income of $1.51 million for the third quarter of 2024, down from $2.86 million in the same quarter of 2023. For the nine months ended September 30, 2024, net income reached $7.47 million, a substantial increase from $3.68 million for the same period in the previous year. This growth was driven by dividend income from marketable securities, which totaled $10.17 million for the nine months ended September 30, 2024, compared to $4.33 million in the prior year.

Despite the increase in net income, the company reported an accumulated deficit of $(15.60 million) as of September 30, 2024, compared to $(12.91 million) at the end of 2023. Total liabilities rose to $15.83 million from $13.41 million, with current liabilities significantly increasing to $2.73 million from $309,985.

Strategically, Inflection Point Acquisition Corp. II entered into a Business Combination Agreement with USA Rare Earth, LLC on August 21, 2024. Following the merger, the company plans to change its name to "USA Rare Earth, Inc." and relocate its jurisdiction from the Cayman Islands to Delaware, pending shareholder approval. The merger includes provisions for the conversion of Class B ordinary shares to Class A shares and the issuance of up to 10 million shares of New USARE Common Stock as earn-out consideration, contingent on stock performance.

The company has until November 30, 2024, to complete the business combination, raising concerns about its ability to do so given its current cash position and working capital deficit of $2.5 million. If the business combination is not completed by the deadline, a mandatory liquidation of the Trust Account will occur, which could significantly impact the company's future operations.