FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2024
Iron Horse Acquisitions Corp. (the “Company”) filed its Form 10-Q for the quarter ended June 30, 2024. The Company reported a net loss of $1.3 million for the three months ended June 30, 2024, compared to a net loss of $1.1 million for the same period in 2023. As of June 30, 2024, the Company had cash and cash equivalents of $1.4 million and a stockholders’ deficit of $14.1 million. The Company’s total assets decreased by $0.4 million to $1.6 million, and its total liabilities increased by $0.3 million to $15.7 million, primarily due to the issuance of warrants and the accrual of expenses. The Company’s management’s discussion and analysis of financial condition and results of operations is included in the report, which provides an overview of the Company’s financial performance and position.
Overview
Bengochea SPAC Acquisition Corp. is a blank check company formed in November 2021 with the purpose of merging with or acquiring one or more businesses. The company has not yet engaged in any operations or generated any revenue, as its activities have been focused on organizational tasks and preparing for its initial public offering (IPO).
Financial Performance
For the three months ended June 30, 2024, the company reported net income of $481,927, which was primarily driven by $931,428 in interest earned on marketable securities held in the company’s trust account. This was offset by $238,406 in formation and operating costs, a $33,053 unrealized loss on marketable securities, and $178,042 in income tax provisions.
For the six months ended June 30, 2024, the company reported net income of $955,342. This included a $11,135 change in fair value of the overallotment liability, a $295,000 gain on lawsuit settlements, and $1,789,681 in interest earned on marketable securities. These were offset by $718,264 in formation and operating costs, a $33,053 unrealized loss on marketable securities, and $389,157 in income tax provisions.
In contrast, the company reported net losses of $60,320 and $164,852 for the three and six months ended June 30, 2023, respectively, which were due to formation and operating costs.
Liquidity and Capital Resources
Bengochea SPAC Acquisition Corp. raised $69 million through its IPO in December 2023, including the partial exercise of the underwriters’ over-allotment option. An additional $2.457 million was raised through the private placement of warrants.
As of June 30, 2024, the company had $70.753 million in cash held in the trust account and $91,446 in cash outside the trust account. The company intends to use the funds in the trust account, along with debt or equity financing, to complete a business combination.
The company may need to raise additional funds to meet its expenditures prior to completing a business combination. Its sponsor or officers and directors may provide loans to the company, which could be convertible into warrants of the post-business combination entity.
Going Concern
The company has determined that the mandatory liquidation requirement, should a business combination not occur by the scheduled date of December 29, 2024, raises substantial doubt about its ability to continue as a going concern. Management plans to complete a business combination before the mandatory liquidation date, but there is no assurance that this will be achieved.
Conclusion
Bengochea SPAC Acquisition Corp. is a blank check company that has not yet engaged in any operations or generated revenue. Its financial performance has been mixed, with net income in the first half of 2024 but net losses in the prior year. The company has significant cash reserves from its IPO and private placement, which it plans to use to complete a business combination. However, the company faces the risk of mandatory liquidation if a deal is not reached by the end of 2024, which raises substantial doubt about its ability to continue as a going concern.
