Business Context and Reporting Period
Company: Iron Horse Acquisition II Corp. (SPAC)
Reporting Period: Quarter ended May 31, 2026 (Six months ended May 31, 2026)
Status: The Company is a Cayman Islands exempted company formed to effect a business combination. It has not commenced operations other than organizational activities and the search for a target. On April 21, 2026, the Company entered into a Business Combination Agreement to merge with Electra Vehicles, Inc. (an AI-powered battery intelligence company), with the combined entity to be named "Electra AI, Inc."
Key Financial Metrics
| Metric | Value (Six Months Ended May 31, 2026) |
|---|---|
| Net Income | $2,659,996 |
| Operating Loss | $(1,051,452) |
| Interest Income (Trust Account) | $3,711,448 |
| Cash and Cash Equivalents (Outside Trust) | $46,833 |
| Cash and Investments in Trust Account | $233,536,448 |
| Total Assets | $234,030,433 |
| Total Liabilities | $11,434,203 |
| Shareholders' Deficit | $(10,940,218) |
| Ordinary Shares Subject to Redemption | 23,000,000 shares ($233,536,448) |
Material Changes vs. Prior Period
- Initial Public Offering (IPO): The Company consummated its IPO on December 18, 2025, selling 23,000,000 Units (including full over-allotment) at $10.00 per unit, generating $230,000,000 in gross proceeds. This contrasts with the prior period (ended May 31, 2025) where the Company had no public shares and minimal assets.
- Trust Account: $230,000,000 was deposited into the Trust Account following the IPO. As of May 31, 2026, the balance grew to $233,536,448 due to interest earnings.
- Profitability: The Company reported a net income of $2,659,996 for the six months ended May 31, 2026, compared to a net loss of $95,857 for the same period in 2025. The income is primarily driven by interest earned on the Trust Account.
- Liabilities: Total liabilities increased significantly to $11,434,203, primarily due to a $10,950,000 deferred underwriting fee and $331,571 in deferred legal fees related to the proposed business combination.
Outlook, Risks, and Contingencies
- Proposed Business Combination: The Company is in the process of merging with Electra Vehicles, Inc. The transaction involves a domestication from the Cayman Islands to Delaware and a merger consideration of approximately $250,000,000 plus earnout shares (up to 15,000,000 shares) based on stock price and revenue milestones.
- Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern. The Company lacks sufficient liquidity to sustain operations for at least one year without completing a business combination or raising additional capital. If a combination is not completed within the prescribed period (24 months from IPO), the Company will liquidate.
- Deferred Fees: The Company has significant contingent liabilities, including a $10,950,000 deferred underwriting fee payable only upon successful completion of the business combination and a $331,571 deferred legal fee.
- Risks: Risks include the failure to consummate the business combination, geopolitical instability affecting markets, and the potential for the Trust Account funds to be subject to creditor claims in a bankruptcy scenario.
Investor Verification Checklist
- Merger Approval: Verify the status of shareholder votes required to approve the merger with Electra Vehicles, Inc.
- Trust Account Balance: Confirm the current balance in the Trust Account and any withdrawals made for working capital or taxes.
- Redemption Rights: Review the terms regarding public shareholder redemptions and the potential impact on the closing cash balance (minimum $30,000,000 required at closing).
- Going Concern Status: Assess the likelihood of the business combination closing within the 24-month window to avoid liquidation.
- Deferred Liabilities: Confirm the treatment of the $10.95 million deferred underwriting fee and $331,571 deferred legal fee in the post-merger capital structure.