Business Context and Reporting Period
Company: HCM IV Acquisition Corp. (HCM IV)
Reporting Period: Quarter ended March 31, 2026
Status: Blank check company (SPAC) incorporated in the Cayman Islands. The Company consummated its Initial Public Offering (IPO) on February 13, 2026, and has not yet selected a business combination target. It is classified as a shell company, a smaller reporting company, and an emerging growth company.
Key Financial Metrics
| Metric | Value |
|---|---|
| Net Loss (Three months ended Mar 31, 2026) | $(2,946,856) |
| Net Loss Per Share (Basic & Diluted) | $(0.13) |
| Cash and Cash Equivalents (Outside Trust) | $1,023,362 |
| Trust Account Balance | $288,511,298 |
| Total Assets | $289,748,874 |
| Total Liabilities | $17,821,829 |
| Working Capital (Non-trust) | $338,881 |
| Deferred Underwriting Fee | $13,687,500 |
Material Changes vs. Prior Period
The Company was in its pre-IPO formation stage as of December 31, 2025, with minimal assets ($160,959) and no operations. The material changes in Q1 2026 are driven entirely by the consummation of the IPO on February 13, 2026:
- Capital Raise: Sold 28,750,000 Units (including full over-allotment) at $10.00 per unit, generating gross proceeds of $287,500,000. Additionally, sold 4,666,667 Private Placement Warrants for $7,000,000.
- Trust Account: Deposited $287,500,000 into the Trust Account. By March 31, 2026, the balance grew to $288,511,298 due to interest income of $1,011,298.
- Liabilities: Recognized significant deferred liabilities, including a $13,687,500 deferred underwriting fee and a $3,062,500 non-current advisory fee payable.
- Equity: Class A ordinary shares subject to possible redemption increased from $0 to $288,511,298.
Outlook, Risks, and Management Commentary
Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern. With only $1,023,362 in cash outside the Trust Account and monthly administrative costs of $35,000, the Company lacks sufficient resources to sustain operations for one year without completing a Business Combination or raising additional capital.
Business Combination Timeline: The Company has 24 months from the IPO closing (February 13, 2026) to complete an initial Business Combination. If unsuccessful, the Company will liquidate and redeem public shares.
Key Risks:
- Liquidity Risk: Insufficient working capital to fund search for a target or operational costs.
- 2024 SPAC Rules: New regulations may materially affect the ability to complete a combination and increase costs.
- Redemption Risk: Public shareholders may redeem shares upon a Business Combination, potentially reducing available cash for the transaction.
- Warrant Redemption: Warrants may be redeemed if the share price exceeds $18.00 for 20 trading days within a 30-day period post-combination.
Investor Verification Checklist
- Trust Account Yield: Verify the interest rate earned on the $288.5M Trust Account and the impact of potential tax withdrawals on the per-share redemption value.
- Deferred Fees: Confirm the total deferred underwriting fee ($13.7M) and advisory fees ($3.1M) payable upon closing a Business Combination.
- Working Capital Runway: Assess the $1.0M cash balance against the $35k/month administrative burn rate to determine the urgency of a deal or capital raise.
- Over-Allotment Exercise: Confirm that the full 3,750,000 unit over-allotment was exercised, securing the full $287.5M gross proceeds.
- Related Party Transactions: Review the $35,000/month administrative support agreement with the Sponsor and the advisory agreement with Zenith Securities (Sponsor affiliate).