Overview

Ares Acquisition Corporation II is a blank check company formed in March 2021 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The company completed its initial public offering (IPO) on April 25, 2023, raising $500 million by selling 50 million units at $10 per unit.

Financial Performance

• For the three months ended June 30, 2024, the company had net income of $6,585,367, consisting of $6,958,789 in investment income from the trust account, offset by $373,422 in general and administrative costs.
• For the six months ended June 30, 2024, the company had net income of $12,978,757, consisting of $13,807,691 in investment income from the trust account, offset by $828,934 in general and administrative costs.
• For the three and six months ended June 30, 2023, the company had net income of $3,565,936 and $3,565,636 respectively, consisting of $3,873,223 in investment income from the trust account, offset by $307,287 and $307,587 in general and administrative costs.

Liquidity and Capital Resources

• As of June 30, 2024, the company had $1,396,782 in its operating bank account and working capital of $1,307,006.
• The company’s liquidity needs have been satisfied through a $25,000 contribution from the sponsor, a $366,781 loan from the sponsor that was repaid, and proceeds from the private placement.
• The company’s management has determined that the mandatory liquidation of the trust account if a business combination is not completed raises substantial doubt about the company’s ability to continue as a going concern.

Trends and Outlook

• The company continues to evaluate the impact of inflation, rising interest rates, financial market instability, and geopolitical events, which could negatively affect its financial position and ability to complete an initial business combination.
• The company has until April 25, 2025 to complete a business combination, after which the trust account will be liquidated if a deal is not reached.
• The company has entered into various fee arrangements, including a $17.5 million deferred underwriting fee and a $3.5 million deferred advisory fee, that are contingent on completing a business combination.

Conclusion

Ares Acquisition Corporation II has made progress in its IPO and search for a business combination target, generating investment income from the trust account. However, the company faces substantial doubt about its ability to continue as a going concern if it cannot complete a deal within the allotted time frame, and external factors like inflation and market instability could further impact its prospects. The company’s future success will depend on its ability to find and execute a suitable business combination.