Athena II Narrows Loss, Boosted by Tax Reversal Amid SPAC Hunt

TL;DR

**ATEKW is a high-risk bet, as its financial improvements are largely non-recurring and its trust account is nearly depleted, making a successful business combination a long shot.**

AI Summary

Athena Technology Acquisition Corp. II (ATEKW) reported a net income of $508,085 for the three months ended September 30, 2025, a significant improvement from a net loss of $314,920 in the same period of 2024. However, for the nine months ended September 30, 2025, the company still posted a net loss of $959,779, though this is an improvement from the $1,151,865 net loss in the prior year. Total operating expenses decreased to $361,412 for the three months ended September 30, 2025, from $467,928 in 2024, primarily due to lower general and administrative expenses. A key financial event was the reversal of prior year interest and penalties on excise tax liability, contributing $888,340 to other income for the three and nine months ended September 30, 2025. The company's investments held in Trust Account significantly decreased from $3,666,439 at December 31, 2024, to $293,283 at September 30, 2025, largely due to redemptions of Class A common stock totaling $3,335,294 during the nine-month period. The deferred underwriting fee payable of $8,956,250 remains outstanding, contingent on a successful business combination with Ace Green Recycling, despite a waiver agreement. The company continues to operate as a blank check company, seeking a business combination.

Why It Matters

For investors, ATEKW's improved net income in Q3 2025, driven by a substantial excise tax reversal, offers a glimmer of positive financial movement, but the overall nine-month loss and dwindling trust account balance signal ongoing challenges for this SPAC. The contingent waiver of the $8,956,250 deferred underwriting fee tied to the Ace Green Recycling deal is a critical factor; its success or failure will directly impact the company's financial health and potential for a viable business combination. Competitively, the SPAC market remains challenging, and ATEKW's ability to secure a definitive deal and retain investor capital is paramount. Employees and customers of a potential target company would be impacted by the successful completion of a business combination, providing stability and growth opportunities.

Risk Assessment

Risk Level: high — The company's investments held in the Trust Account plummeted from $3,666,439 at December 31, 2024, to $293,283 at September 30, 2025, indicating significant redemptions and a severely diminished capital base for a business combination. Furthermore, the deferred underwriting fee of $8,956,250 remains outstanding and contingent on a successful business combination, posing a substantial liability if the deal with Ace Green Recycling falls through.

Analyst Insight

Investors should exercise extreme caution and consider divesting, as the significant reduction in the Trust Account balance and the contingent nature of the deferred underwriting fee waiver indicate high operational and financial risk. Await definitive news on the Ace Green Recycling business combination and its financial terms before considering any investment.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$1,516,962

total Debt

$17,869,045

net Income

$508,085

eps

N/A

gross Margin

N/A

cash Position

$527,152

revenue Growth

N/A

Key Numbers

• $508,085 — Net Income (for the three months ended September 30, 2025, a significant improvement from a $314,920 net loss in the prior year.)
• $959,779 — Net Loss (for the nine months ended September 30, 2025, an improvement from $1,151,865 in the prior year.)
• $293,283 — Investments held in Trust Account (as of September 30, 2025, a sharp decrease from $3,666,439 at December 31, 2024, due to redemptions.)
• $8,956,250 — Deferred underwriting fee payable (remains outstanding and contingent on a successful business combination with Ace Green Recycling.)
• $888,340 — Reversal of excise tax liability (contributed significantly to other income for the three and nine months ended September 30, 2025.)
• $3,335,294 — Cash withdrawn from Trust Account (in connection with redemptions during the nine months ended September 30, 2025.)
• 24,887 — Class A common stock shares subject to redemption (at September 30, 2025, down from 310,156 shares at December 31, 2024.)
• $14.25 — Redemption value per share (at September 30, 2025, up from $13.82 per share at December 31, 2024.)

Key Players & Entities

• Athena Technology Acquisition Corp. II (company) — registrant
• Athena Technology Sponsor II, LLC (company) — Sponsor of the SPAC
• Citigroup Global Markets Inc. (company) — representative of the underwriters
• Ace Green Recycling (company) — potential business combination target
• U.S. Securities and Exchange Commission (regulator) — regulatory body
• $508,085 (dollar_amount) — net income for three months ended September 30, 2025
• $314,920 (dollar_amount) — net loss for three months ended September 30, 2024
• $959,779 (dollar_amount) — net loss for nine months ended September 30, 2025
• $888,340 (dollar_amount) — reversal of prior year interest and penalties on excise tax liability
• $8,956,250 (dollar_amount) — deferred underwriting fees payable

FAQ

Risk Factors

• Dependence on Trust Account and Redemptions [high — financial]: The company's investments held in the Trust Account significantly decreased from $3,666,439 at December 31, 2024, to $293,283 at September 30, 2025. This reduction is primarily due to redemptions of Class A common stock totaling $3,335,294 during the nine-month period. The substantial decrease in trust assets impacts the company's financial flexibility and ability to fund a business combination.
• Deferred Underwriting Fee Contingency [high — financial]: A deferred underwriting fee payable of $8,956,250 remains outstanding. This fee is contingent upon a successful business combination with Ace Green Recycling. The significant amount of this contingent liability poses a financial risk if the business combination does not materialize.
• Blank Check Company Status and Business Combination Risk [high — operational]: Athena Technology Acquisition Corp. II continues to operate as a blank check company, actively seeking a business combination. The success of the company is entirely dependent on identifying and completing a suitable acquisition. Failure to do so within the required timeframe could lead to dissolution and return of funds to shareholders.
• Excise Tax Liability and Penalties [medium — regulatory]: The company experienced a reversal of prior year interest and penalties on excise tax liability, contributing $888,340 to other income. While this was a positive event for the current period, the existence of such liabilities and potential penalties highlights regulatory compliance risks.
• Increasing Redemption Value Per Share [medium — financial]: The redemption value per share for Class A common stock has increased from $13.82 at December 31, 2024, to $14.25 at September 30, 2025. This increase in redemption value puts further pressure on the company's available capital, especially in light of ongoing redemptions.

Industry Context

Athena Technology Acquisition Corp. II operates within the Special Purpose Acquisition Company (SPAC) sector, which has seen significant evolution. While SPACs offer an alternative route to public markets, they face increasing scrutiny regarding deal quality and execution. The current environment demands successful identification and completion of a business combination to avoid dissolution.

Regulatory Implications

The company must navigate regulations pertaining to SPACs, including disclosure requirements and shareholder voting rights. The reversal of excise tax penalties highlights the importance of accurate tax compliance and the potential financial impact of regulatory missteps.

What Investors Should Do

1. Monitor the progress of the business combination with Ace Green Recycling.
2. Assess the impact of ongoing redemptions on available capital.
3. Evaluate the financial health and operational plan of Ace Green Recycling.

Key Dates

• 2025-09-30: Quarterly Report Filing (3 months ended) — Reported net income of $508,085, a significant improvement from a net loss in the prior year, driven by a reversal of excise tax penalties.
• 2025-09-30: Nine Months Ended — Reported a net loss of $959,779, an improvement from the prior year, with substantial redemptions from the Trust Account.
• 2025-09-30: Investments in Trust Account Balance — Decreased to $293,283 from $3,666,439 at year-end 2024 due to stock redemptions.
• 2024-12-31: Year-End Financial Position — Investments in Trust Account were $3,666,439, and Class A common stock subject to redemption was 310,156 shares.

Glossary

Trust Account

A segregated account, typically holding U.S. Treasury bills or money market funds, established by a special purpose acquisition company (SPAC) to hold the proceeds of its initial public offering. (The balance in the Trust Account is critical for funding redemptions and the eventual business combination.)

Redemptions

The process by which holders of a SPAC's public shares can elect to have their shares repurchased for cash, typically at the per-share price at which the shares were offered in the IPO, plus any pro-rata interest earned. (Significant redemptions reduce the capital available for a business combination and can impact the SPAC's viability.)

Deferred underwriting fee payable

A fee owed to the underwriters of the SPAC's IPO that is typically paid only upon the successful completion of a business combination. (This represents a significant contingent liability that will be paid if the merger with Ace Green Recycling is completed.)

Blank check company

A company with no commercial operations that is formed to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. (This describes Athena Technology Acquisition Corp. II's current operational status and its primary objective.)

Class A common stock subject to possible redemption

Shares of common stock issued by a SPAC that holders have the right to redeem for cash prior to a business combination. (The number and value of these shares directly impact the amount of capital available to the company.)

Year-Over-Year Comparison

Compared to the prior year, Athena Technology Acquisition Corp. II has shown a significant improvement in its quarterly net income, moving from a loss of $314,920 to a gain of $508,085 for the three months ended September 30, 2025, largely due to a substantial $888,340 reversal of excise tax penalties. However, the nine-month net loss, while reduced from $1,151,865 to $959,779, remains a concern. A critical change is the drastic reduction in the Trust Account from $3,666,439 to $293,283, driven by $3,335,294 in stock redemptions, alongside an increase in the redemption value per share. New risks include the substantial deferred underwriting fee payable of $8,956,250, contingent on the Ace Green Recycling merger.

Key Financial Figures

• $0.0001 — ares of Class A common stock, par value $0.0001 per share, and 0 shares of Class B comm

Filing Documents

• ea0265600-10q_athena2.htm (10-Q) — 1140KB
• ea026560001ex31-1_athena2.htm (EX-31.1) — 12KB
• ea026560001ex31-2_athena2.htm (EX-31.2) — 12KB
• ea026560001ex32-1_athena2.htm (EX-32.1) — 5KB
• ea026560001ex32-2_athena2.htm (EX-32.2) — 5KB
• 0001213900-25-127112.txt ( ) — 6398KB
• atek-20250930.xsd (EX-101.SCH) — 55KB
• atek-20250930_cal.xml (EX-101.CAL) — 26KB
• atek-20250930_def.xml (EX-101.DEF) — 285KB
• atek-20250930_lab.xml (EX-101.LAB) — 466KB
• atek-20250930_pre.xml (EX-101.PRE) — 288KB
• ea0265600-10q_athena2_htm.xml (XML) — 735KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) 1 Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 1 Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 2 Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit for the three and nine months ended September 30, 2025 and 2024 3 Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 4 Notes to Condensed Consolidated Financial Statements (Unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 25 Item 3. Quantitative and Qualitative Disclosures about Market Risk 34 Item 4. Controls and Procedures 34 PART II – OTHER INFORMATION 36 Item 1. Legal Proceedings 36 Item 1A. Risk Factors 36 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 36 Item 3. Defaults Upon Senior Securities 36 Item 4. Mine Safety Disclosures 36 Item 5. Other Information 36 Item 6. Exhibits 37 SIGNATURE 38 i ITEM 1. INTERIM FINANCIAL STATEMENTS (UNAUDITED) ATHENA TECHNOLOGY ACQUISITION CORP. II CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2025 December 31, 2024 (Unaudited) ASSETS CURRENT ASSETS Cash $ 527,152 $ 142,260 Prepaid expenses and other assets 69,904 41,585 Prepaid income taxes 611,113 601,348 Due from Sponsor 15,510 15,510 Total current assets 1,223,679 800,703 Investments held in Trust Account 293,283 3,666,439 TOTAL ASSETS $ 1,516,962 $ 4,467,142 LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Accounts payable and accrued expenses $ 5,745,983 $ 4,805,980 Note payable - related party, net of discount 1,800,000 1,155,205 Convertible note - related party 422,182 422,182 Due to related party 211,029 201,

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