FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2024
Iron Horse Acquisitions Corp. (the “Company”) filed its Form 10-Q for the quarter ended September 30, 2024. The Company reported a net loss of $1.4 million for the three months ended September 30, 2024, compared to a net loss of $1.1 million for the same period in 2023. As of September 30, 2024, the Company had cash and cash equivalents of $1.3 million and a stockholders’ deficit of $14.4 million. The Company’s primary focus is on identifying and acquiring a target business, and it has not yet generated any revenue. The Company’s financial statements are presented in accordance with generally accepted accounting principles (“GAAP”) and have been prepared on a going concern basis, which assumes that the Company will continue to operate and meet its obligations as they come due.
Overview
We are a blank check company formed in November 2021 with the purpose of merging with or acquiring one or more businesses. On December 29, 2023, we completed our initial public offering (IPO), raising $69 million by selling 6.9 million units at $10 per unit. We also sold 2.457 million private placement warrants to our sponsor for $2.457 million.
After the IPO and private placement, we had $69 million in our trust account, which we intend to use to complete a business combination. We have not yet identified a target company for the merger. We expect to continue incurring significant costs as we search for and evaluate potential acquisition targets.
On September 29, 2024, we entered into a business combination agreement to acquire Zhong Guo Liang Tou Group Limited, a company based in the British Virgin Islands. Depending on the number of shares redeemed by our stockholders, we will issue between 40.988 million and 47.888 million shares of our common stock to the seller as part of the transaction. The deal is subject to customary closing conditions, including regulatory approvals and stockholder approval.
Results of Operations
Since our inception in November 2021, we have not engaged in any operations or generated any revenue. Our activities have been limited to organizational tasks and preparing for the IPO. We generate non-operating income in the form of interest on the funds held in our trust account.
For the three months ended September 30, 2024, we had net income of $465,533, consisting of $915,956 in interest earned on the trust account, $28,138 in unrealized gains on the trust account investments, offset by $290,801 in formation and operating costs and $187,760 in income taxes.
For the nine months ended September 30, 2024, we had net income of $1,420,875, which included a $11,135 change in fair value of the overallotment liability, $295,000 in lawsuit settlement gains, and $2,705,637 in interest earned on the trust account, offset by $1,009,065 in formation and operating costs, $4,915 in unrealized losses on the trust account investments, and $576,917 in income taxes.
In comparison, for the three and nine months ended September 30, 2023, we had net losses of $137,134 and $301,986, respectively, consisting solely of formation and operating costs.
Liquidity and Capital Resources
As of September 30, 2024, we had $71.697 million in our trust account and $3,084 in cash outside the trust account. We intend to use the trust account funds, including interest earned (less taxes payable), to complete a business combination. The outside cash will be used to fund our ongoing operations and identify and evaluate potential target companies.
We may need to raise additional funds to meet the costs of identifying and completing a business combination. The sponsor or our officers and directors may loan us funds if needed, which could be convertible into warrants of the post-combination company.
Going Concern
Our ability to continue as a going concern is dependent on completing a business combination before our mandatory liquidation date of December 29, 2024 (or June 29, 2025 if extended). If we are unable to do so, it would raise substantial doubt about our ability to continue operating. Our financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Other Disclosures
We have no off-balance sheet financing arrangements as of September 30, 2024. Our only significant contractual obligation is the deferred underwriting discount of $2.518 million owed to the IPO underwriters, payable upon completion of a business combination.
We have not identified any critical accounting estimates as of September 30, 2024, and management does not believe any recently issued accounting standards would have a material effect on our financial statements.
