Delisted ATEK SPAC Running Out of Cash, Faces $3.7M Tax Claim, Extension Vote

Athena Technology Acquisition Corp. II (NYSE: ATEK) - Quick read on what's happening inside

Short summary: ATEK is a SPAC that has not commenced operations and is pursuing a proposed business combination with Ace Green Recycling. The company is running a cash‑constrained public shell with rising operating losses, significant contingent liabilities (excise tax, deferred underwriting fees) and related‑party funding to stay alive. Management reports a material weakness in controls and substantial doubt about going concern.

Key facts & statistics

- Cash (unrestricted): $280,063 (June 30, 2025).
- Investments held in Trust Account: $3,585,115 (down from $3,666,439 at 12/31/24).
- Total assets: $4,566,990; Total liabilities: $20,518,689 (June 30, 2025).
- Working capital deficit: $10,580,564 (June 30, 2025).
- Class A common stock subject to possible redemption: 310,156 shares; redemption value reported $4,215,219 (redemption price $13.59/share at 6/30/25).
- Excise tax payable (aggregate including interest & penalties): $3,688,337 (as of 6/30/25).
- IRS asserted amount for 2023 excise tax and interest/penalties: $3,284,389.20 (notice received Dec 2024).
- Related‑party note payable (net of discount): $1,735,686; Convertible note - related party: $422,182.
- Working Capital Loans outstanding (gross): $1,800,000; discount allocation $64,314; net $1,735,686 (6/30/25).
- Deferred underwriting fee payable (contingent): $8,956,250 still outstanding (waiver by Citigroup is contingent on a successful business combination with Ace Green Recycling).
- Shares outstanding: 9,835,000 Class A issued and outstanding (excluding 310,156 subject to redemption). Weighted average shares used: 10,145,156.
- Trading: Delisted from NYSE American (delisted 12/30/24); currently trades on OTC Pink under "ATEK".

Income statement - positives

- The company earns non‑operating interest income from the Trust Account: $38,380 (Q2 2025) and $76,895 (six months 2025). That interest income is the only revenue line for this SPAC.

- Interest income remains available in the Trust Account for certain tax payments (approximately $277,093 of interest income in the Trust Account noted as available).

Income statement - negatives & trends

- Net loss widened materially: Q2 2025 net loss of $(699,206) vs. $(235,418) in Q2 2024; six months 2025 net loss $(1,467,864) vs. $(836,945) for six months 2024.
- Operating expenses increased: General & administrative expense $634,894 for Q2 2025 (vs. $382,269 Q2 2024); six months $1,360,614 (vs. $1,158,045 six months 2024).
- Interest income on Trust Account fell sharply year‑over‑year: $38,380 in Q2 2025 vs. $194,074 in Q2 2024; six months $76,895 vs. $512,940 - indicating lower yield or lower balances available for interest.
- Finance costs increased (discount on debt issuance): $(96,472) in Q2 2025 and $(171,316) for six months 2025, compared with $(59,940) for six months 2024 - reflecting costs tied to related‑party financing structure.
- Net loss per share: $(0.07) basic & diluted for Q2 2025 and $(0.14) for six months 2025 (weighted average shares 10,145,156).

What's happening inside - operational & governance highlights

- SPAC status: The Company has not generated operating revenue; all activity relates to finding and closing a Business Combination. The intended target is Ace Green Recycling under a December 4, 2024 Business Combination Agreement.
- Liquidity squeeze: Operating cash only $280k with a working capital deficit >$10.5M; management says insufficient capital to operate through the earlier of completing a business combination or one year without additional funding.
- Extensions & funding: Management has been buying monthly extensions (small deposits back to Trust) and the Sponsor/third parties have provided working capital loans and subscription investments (Polar, other investors) that are repayable or convertible at closing of a business combination. Recent supplemental funding: January-August 2025 extension deposits and Polar contributed additional capital (aggregate Polar funding noted up to $900,000 as of Aug 11, 2025).
- Contingent liabilities: Deferred underwriting fees of $8,956,250 remain on the books and are contingent on completing a Business Combination; waiver by Citigroup is conditional on a successful combination with Ace Green Recycling.
- Tax exposure: Significant excise tax liabilities and interest/penalties; company has not fully paid 2023/2024 excise taxes and faces ongoing accrual of interest and penalties (estimates include 10% p.a. interest + monthly underpayment penalties up to 25%).
- Controls & reporting: Management disclosed a material weakness in internal control over financial reporting tied to misallocation/use of restricted Trust funds and late filings; restatements and remediation steps are underway but the material weakness is not yet remediated.
- Market listing: Company was delisted from NYSE American (12/30/24) and now trades on OTC Pink - a negative for liquidity and investor access.

Risks and near‑term catalysts

- Immediate risks: mandatory liquidation date concerns (management says insufficient time to complete a Business Combination before Sept 14, 2025 unless extensions are approved), mounting excise tax/IRS claims, and possible further dilution from sponsor/convertible financings.
- Catalysts: stockholder vote(s) to extend the Combination Period (proxy filed for Sep 10, 2025 meeting to seek further monthly extensions through June 14, 2026), and closing the proposed Business Combination with Ace Green Recycling (which would change the company from a shell to an operating entity and could trigger the underwriting fee waiver condition).

Implications for investors

- Short term: high risk. Small operating cash, material weakness, significant contingent liabilities and delisting make this primarily a speculative play tied to whether management can (a) extend the liquidation deadline, (b) survive interim tax/liability claims, and (c) close the proposed business combination.
- If the Business Combination closes: potential mitigation of many liquidity and listing issues (but expect dilution from earnouts, convertible instruments and subscription share issuances). If it fails: liquidation could return roughly the Trust per‑share amount (subject to excise tax and fees), but ongoing claims and unpaid taxes may reduce recoveries.

Bottom line: ATEK is an early‑stage SPAC running out the clock. The company shows rising operating losses, lower interest income, material tax and contingent liabilities, dependence on sponsor/third‑party loans, and a material weakness in controls. The single viable upside is completing the Ace Green Recycling transaction and securing the conditional underwriting waiver - otherwise the path forward carries a high probability of dilution or liquidation risk.

Reference action items for close monitoring

- Vote outcome on proposed extension (special meeting scheduled) and any additional sponsor deposits.
- Progress and definitive terms of the Ace Green Recycling Business Combination and whether closing conditions (including waiver of deferred underwriting fees) are met.
- Payments or resolution of excise tax liabilities and any new IRS demands.
- Any additional related‑party financings, conversions, or dilutive issuances disclosed in subsequent filings.
- Remediation of the material weakness and timely SEC filings.

If you want, I can convert this into a short investor memo (1 page) or a 3‑point alert you can use for a trading watchlist.