Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form 10-K.

Overview

Athena Technology Acquisition Corp. II was incorporated in Delaware on May 20, 2021. The Company was formed for the purpose of entering into a merger, stock exchange, asset acquisition, stock purchase, reorganization or other similar business transaction with one or more businesses that the Company has not yet consummated (a "Business Combination").

On April 19, 2023, the Company entered into a business combination agreement with the Air Water Company in order to effect a Business Combination, but then terminated the agreement on December 13, 2023 by entering into a mutual release agreement.

On December 4, 2024, the Company, the Sponsor, Ace Green Recycling and Merger Sub, entered into the Business Combination Agreement, pursuant to which, subject to the satisfaction or waiver of certain conditions precedent in the Business Combination Agreement, the following transactions will occur: (a) Merger Sub will merge with and into Ace Green Recycling (the "Merger"), with Ace Green Recycling surviving the Merger as a wholly owned subsidiary of the Company and the security holders of Ace Green Recycling becoming security holders of the Company and (b) the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents referred to therein (together with the Merger, the "Transactions").

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination with Ace Green Recycling will be successful.

Proposed Business Combination

Pursuant to the Business Combination Agreement, at the effective time of the Merger, each outstanding share of common stock of Ace Green Recycling (other than any excluded shares and dissenting shares) shall be converted into the right to receive (i) a number of shares of Company common stock equal to the a specified exchange ratio and (ii) a pro rata portion of any Earnout Shares that the Company is obligated to issue pursuant to the terms of the Business Combination Agreement.

The Business Combination Agreement, subject to the terms and conditions set forth therein, provides that Athena will issue up to an aggregate 10,500,000 shares of its common stock (the "Earnout Shares") to Ace Green Recycling's shareholders and up to an aggregate of 1,500,000 shares of its common stock to Sponsor based on the trading prices of Athena's common stock during the five-year period following the closing of the Merger (the "Closing").

Voting and Support Agreements

In connection with the execution of the Business Combination Agreement, Sponsor entered into a Voting and Support Agreement (the "Sponsor Support Agreement") with Athena and Ace Green Recycling, pursuant to which Sponsor has agreed to, among other things, (a) vote at any meeting of Athena shareholders to be called for approval of the Business Combination Agreement, the Merger, and the other Transactions all shares of Athena Class A common stock (together with any warrants to acquire Athena Class A common stock, the "Sponsor Securities") beneficially owned or thereafter acquired in favor of the Business Combination Agreement, the Merger, and the other Transactions, (b) be bound by certain other covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with respect to the Sponsor Securities, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.

In connection with the execution of the Business Combination Agreement, certain Ace Green Recycling shareholders entered into a Voting and Support Agreement (the "Ace Green Recycling Support Agreement") with Athena and Ace Green Recycling, pursuant to which each such Ace Green Recycling shareholder has agreed to, among other things, (a) vote at any meeting of Ace Green Recycling's shareholders to be called for approval of, among other things, the Business Combination Agreement and the Transactions all of such Ace Green Recycling shareholder's shares of Ace Green Recycling common stock (the "Ace Green Recycling Securities") beneficially owned or thereafter acquired in favor of the Transactions, (b) be bound by certain other covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with respect to the Ace Green Recycling Securities, in each case, on the terms and subject to the conditions set forth in the Ace Green Recycling Support Agreement.

Lock-Up Agreements

In connection with the Closing, certain Ace Green Recycling shareholders will each enter into an agreement (the "Ace Green Recycling Shareholder Lock-Up Agreement") providing that each such Ace Green Recycling shareholder will not, subject to certain exceptions, transfer its shares of Athena common stock during the period commencing on the closing date of the business combination and ending 180 days thereafter.

In connection with the Closing, Sponsor will enter into an agreement (the "Sponsor Lock-Up Agreement") providing that Sponsor will not, subject to certain exceptions, transfer its shares of Athena common stock during the period commencing on the closing date of the business combination and ending 180 days thereafter.

New Registration Rights Agreement

The Business Combination Agreement contemplates that, at the Closing, certain Ace Green Recycling equity holders, Sponsor and Athena will enter into a Registration Rights Agreement (the "New Registration Rights Agreement"), pursuant to which Athena will agree to register for resale certain shares of Athena's common stock and other equity securities of Athena that are held by the parties thereto. Pursuant to the New Registration Rights Agreement, Athena will agree to file a shelf registration statement registering the sale or resale of all of the Registrable Securities (as defined in the New Registration Rights Agreement) within 30 days after the closing date of the business combination. Athena will also agree to provide customary "piggyback" registration rights, subject to certain requirements and customary conditions. The New Registration Rights Agreement will also provide that Athena will pay certain expenses relating to such registrations and indemnify the shareholders against certain liabilities.

Stockholder Meetings

On June 13, 2023, the Company held a special meeting of its stockholders (the "First Extension Special Meeting"), at which the stockholders approved proposals to amend the Company's amended and restated certificate of incorporation, as amended and corrected ("Charter") to (i) extend the date by which the Company must consummate its initial Business Combination from June 14, 2023 to up to March 14, 2024 by electing to extend the date to consummate an initial Business Combination on a monthly basis up to nine times by an additional one month each time after June 14, 2023 until March 14, 2024, or a total of up to nine months, provided that the Sponsor or its affiliates or permitted designees deposited into the Trust Account the lesser of (a) $60,000 and (b) $0.03 for each share of common stock issued and outstanding that was subject to redemption and that had not been redeemed in accordance with the terms of the amended Charter and (ii) provided holders of the Company's Class B common stock, par value $0.0001 per share (the "Class B common stock"), the right to convert any and all of their Class B common stock into the Company's Class A common stock, par value $0.0001 per share (the "Class A common stock"), on a one-for-one basis prior to the closing of a Business Combination at the election of the holder. The Company filed an amendment to the Charter to reflect the accepted proposals on June 13, 2023. In connection with the First Extension Special Meeting, 23,176,961 shares of the Company's Class A common stock were redeemed.

On March 12, 2024, the Company held a special meeting of its stockholders (the "Second Extension Special Meeting"), at which the stockholders approved proposals to further amend the Charter to (i) further extend the date by which the Company must consummate its initial Business Combination on a monthly basis for up to nine times by an additional one month each time for a total of up to nine months from March 14, 2024 to December 14, 2024 provided that the Sponsor or its affiliates or permitted designees deposited into the Trust Account the lesser of (a) $40,000 and (b) $0.02 for each share of the Company's common stock issued and outstanding that was subject to redemption and that had not been redeemed upon the election of each such one-month extension unless the closing of the Company's initial Business Combination had occurred and (ii) eliminated the limitation that the Company may not redeem public shares in an amount that would cause the Company's net tangible assets to be less than $5,000,001 immediately prior to or upon consummation of an initial Business Combination. The Company filed an amendment to the Charter to reflect the accepted proposals on March 12, 2024. In connection with the Second Extension Special Meeting, 910,258 shares of the Company's Class A common stock were redeemed.

On December 10, 2024, the Company held an annual meeting of its stockholders (the "Third Extension Meeting"), at which the stockholders approved the proposal to amend the Charter to further extend the date by which the Company must consummate its initial Business Combination on a monthly basis for up to nine times by an additional one month each time for a total of up to nine months from December 14, 2024 to September 14, 2025 (the "Third Extension"), provided that the Sponsor or its affiliates or permitted designees deposit into the Trust Account the lesser of (a) $25,000 and (b) $0.02 for each share of the Company's common stock issued and outstanding that was subject to redemption and that had not been redeemed upon the election of each such one-month extension unless the closing of the Company's initial Business Combination had occurred. The Company filed an amendment to the Charter to reflect the accepted proposals on December 10, 2024. In connection with the Third Extension, 977,625 shares of the Company's Class A common stock were redeemed.

On September 10, 2025, the Company held a special meeting of its stockholders (the "Fourth Extension Special Meeting"), at which the stockholders approved the proposal to further amend the Charter to further extend the date by which the Company must consummate its initial Business Combination on a monthly basis for up to nine times by an additional one month each time for a total of up to nine months from September 14, 2025 to June 14, 2026 (the "Fourth Extension"), provided that the Sponsor or its affiliates or permitted designees deposit into the Trust Account the lesser of (a) $25,000 and (b) $0.02 for each share of the Company's common stock issued and outstanding that is subject to redemption and that has not been redeemed upon the election of each such one-month extension unless the closing of the Company's initial Business Combination shall have occurred. The Company filed an amendment to the Charter to reflect the accepted proposals on September 10, 2025. In connection with the Fourth Extension Special Meeting, 285,269 shares of the Company's Class A common stock were redeemed.

Trust Deposits

On January 8, 2024, the Company deposited $60,000 into the Trust Account allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month from January 14, 2024 to February 14, 2024.

On February 9, 2024, the Company deposited $60,000 into the Trust Account allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month from February 14, 2024 to March 14, 2024.

On each of March 13, 2024, April 16, 2024, May 14, 2024, June 14, 2024, July 10, 2024, August 8, 2024, September 12, 2024, October 15, 2024 and November 11, 2024, the Company deposited $25,756 into the Trust Account, or an aggregate of $231,800, allowing the Company to extend the period of time it has to consummate its initial Business Combination from March 14, 2024 to December 14, 2024.

On each of December 11, 2024, January 10, 2025, February 10, 2025, March 6, 2025, April 7, 2025, May 7, 2025, June 6, 2025, July 8, 2025 and August 11, 2025, the Company deposited $6,203 into the Trust Account, or an aggregate of $55,827, allowing the Company to extend the period of time it has to consummate its initial Business Combination from December 14, 2024 to September 14, 2025.

On each of September 12, 2025, October 7, 2025, November 4, 2025, December 8, 2025, January 5, 2026, February 5, 2026 and March 4, 2026, the Company deposited approximately $498 into the Trust Account, or an aggregate of approximately $3,486, allowing the Company to extend the period of time it has to consummate its initial Business Combination from September 14, 2025 to April 14, 2026.

NYSE American Notifications and Delisting

On July 17, 2023, our Board of Directors authorized the transfer of the listing of our Class A common stock, redeemable warrants, each exercisable to purchase one share of Class A common stock at a price of $11.50 per share (the "Warrants"), and units, each consisting of one share of Class A common stock and one-half of one Warrant (the "Units" and together with the Class A common stock and the Warrants, the "Listed Securities"), from the New York Stock Exchange (the "NYSE") to the NYSE American LLC (the "NYSE American"). The listing and trading of the Listed Securities on the NYSE ended at market close on July 20, 2023, and the trading of the Listed Securities on the NYSE American commenced at market open on July 21, 2023.

On each of April 17, 2024 and November 20, 2024, the Company received an official notice of noncompliance from NYSE Regulation stating that it was not in compliance with NYSE American continued listing standards under the timely filing criteria included in Section 1007 of the NYSE American Company Guide due to the failure to timely file the Annual Report on Form 10-K by the filing due date of April 16, 2024 and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 by the filing due date of November 19, 2024, respectively (the "Filing Delinquencies".) The Company filed its Annual Report on Form 10-K, the Quarterly Report on Form 10-Q for the three months ended March 31, 2024, the Quarterly Report on Form 10-Q for the three months ended June 30, 2024 and the Quarterly Report on Form 10-Q for the three months ended September 30, 2024, and believed it had cured the Filing Delinquencies. On October 21, 2024, the Company received a letter from the NYSE notifying the Company of its past due annual listing fees. On December 10, 2024, the Company received a letter from the NYSE stating that the staff of NYSE Regulation has determined to commence proceedings to delist the Company's (i) Class A common stock (ii) Units, and (iii) Warrants pursuant to Sections 119(b) and 119(f) of the NYSE American Company Guide because the Company failed to consummate a Business Combination within 36 months of the effectiveness of its initial public offering registration statement, or such shorter period that the Company specified in its registration statement. As a result of the determination, trading of the Listed Securities on NYSE American was suspended on December 10, 2024 and the Listed Securities were delisted on December 30, 2024. Our Class A common stock, Units and Warrants currently trade on OTC Pink under the symbols "ATEK," "ATEK.U" and "ATEK WS," respectively.

Use of Restricted Funds

Through April 2023, the Company withdrew $356,693 of interest and dividend income earned in the Trust Account for payment of the Company's 2021 and 2022 franchise tax liabilities. The Company settled the 2021 and 2022 franchise tax liabilities of $356,693 in April 2023.

On June 21, 2023, the Company withdrew from the Trust Account an aggregate amount of $2.4 million to be used for tax purposes. It was determined as of June 30, 2023 that the withdrawal amount was approximately $328,000 in excess of the amount necessary for tax purposes. As a result, the overdrawn amount of $328,000 was allocated back to the contingently redeemable Class A common stock subject to possible redemption and distributed back to the Trust Account on August 17, 2023. As of December 31, 2023, after the overdrawn amount was returned to the Trust Account, approximately $2.1 million of restricted funds remained in the Company's operating account for future payment of franchise and income taxes (the "Restricted Funds"). On March 19, 2024, the Company withdrew an additional $252,108 from the Trust Account to pay the Company's franchise and income taxes payable, increasing the Restricted Funds to $2.3 million as of March 31, 2024.

Through March 31, 2024, the Company used portions of the Restricted Funds to pay for general operating expenses in the aggregate amount of $669,440. Management later determined that this use of Restricted Funds was not in accordance with the Charter and the amended Trust Agreement. On April 10, 2024, the misallocated $669,440 of Restricted Funds was replenished to the Company's operating account in the form of an intercompany loan made by Sponsor.

On April 3, 2024, the Company paid $720,192 to satisfy income tax liabilities for 2022. On May 16, 2024, the Company paid $820,571 of its 2023 income tax liabilities and on July 22, 2024, the Company paid $79,849 of its 2023 Delaware franchise tax liabilities. During September 2024, the Company paid $658,686 of its 2024 income taxes, inclusive of $43,257 of interest and penalties incurred. On May 21, 2025, the Company paid $171,778 of its 2023 tax penalties and interest. As of December 31, 2025, the total amount of prepaid income taxes was $610,976, and the remaining restricted cash balance amounted to $0.

Company Funding

On July 26, 2024, the Company issued an unsecured promissory note to the Sponsor with a principal amount equal to $422,182. The note is non-interest bearing and payable on the earlier of July 26, 2026 or the Company's initial Business Combination. The Note may be converted into equity securities of the Company on mutually agreeable terms if consented to in writing by the Sponsor. As of December 31, 2025, the Company received the full principal amount of $422,182 under this note.

On October 10, 2024 (effective on April 10, 2024), the Company issued an unsecured and non-interest-bearing promissory note to the Sponsor with a principal amount equal to $1,500,000 to cover the monthly extension payments of the Company and for working capital purposes. The note is payable in full upon the earlier of (a) April 10, 2026 and (b) the date the Company consummates a Business Combination. The Company drew $800,000 from this note on April 10, 2024 to replenish the misallocated Restricted Funds.

On December 6, 2024, the Company and Sponsor entered into an Amended and Restated Subscription Agreement (the "A&R Polar Subscription Agreement") with Polar Multi-Strategy Master Fund ("Polar") pursuant to which Polar contributed an additional $200,000 to Sponsor (for an aggregate of $500,000, such funded amounts, the "Initial Polar Capital Investment"), which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the Company must consummate an initial Business Combination and to cover working capital expenses. The Subscription Agreement provides that in connection with the Initial Polar Capital Investment, the Company will repay the entire balance of the Initial Polar Capital Investment to Polar within five business days of the closing of an initial Business Combination of the Company and that Sponsor will transfer and/or the Company will issue on Sponsor's behalf an additional 200,000 shares of Class A common stock to Polar immediately prior to the closing of an initial Business Combination of the Company (for an aggregate of 500,000 shares to be transferred and/or issued to Polar as consideration for the Initial Polar Capital Investment).

On February 9, 2025, the Company and Sponsor entered into a subscription agreement (the "February 2025 Subscription Agreement") with Kevin Wright and Jeanine Percival Wright Revocable Trust (the "Investor") pursuant to which the Investor contributed $500,000 to Sponsor (the "Contribution"), which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the Company must consummate an initial Business Combination and to cover working capital expenses. The February 2025 Subscription Agreement provides that in connection with the Contribution, the Company will repay the entire balance of the Contribution to the Investor within five business days of the closing of an initial Business Combination of the Company and that Sponsor will transfer and/or the Company will issue on Sponsor's behalf an additional 300,000 shares of Class A common stock to the Investor immediately prior to the closing of an initial Business Combination of the Company.

On August 11, 2025, the Company and Sponsor entered into a subscription agreement (the "August Subscription Agreement") with Polar pursuant to which Polar contributed an additional $400,000 (the "August Polar Capital Investment") to the Company to cover working capital expenses. The August Subscription Agreement provides that in connection with the Polar Capital Investment, immediately prior to the closing of a Business Combination, the Company will issue to Polar one share of Company class A common stock per $1.00 contributed by Polar (the "subscription shares").

Additionally, in connection with the August Subscription Agreement, an amount equal to the August Polar Capital Investment shall be paid by the Company to Polar as a return of capital within five business days of the closing of a Business Combination. Additionally, the Sponsor shall not sell, transfer, or otherwise dispose of any securities (including warrants) owned by the Sponsor without Polar's consent, other than Permitted Share Transfers, until the full amount of the contribution has been paid to Polar. The Company and Sponsor are jointly and severally obligated for such repayment. If the closing of a Business Combination occurs, Polar may, in its sole discretion, elect at the closing of such Business Combination or at any time prior to the repayment of the August Polar Capital Investment to receive such repayment from the Company either in cash or shares of the Company's Class A common stock at a rate of one share of Class A common stock for each $10 of the contribution (the "Capital Contribution Shares"). In the event that the Sponsor or the Company defaults in its obligations and that such default continues for a period of five business days following written notice to the Sponsor and Company (the "Default Date"), the Company shall immediately issue to Polar 0.1 shares of the Company's Class A common stock (the "Default Shares") for each $1.00 of the August Polar Capital Investment on the Default Date and shall issue to Polar an additional 0.1 Default Shares for each $1.00 of the August Polar Capital Investment that Polar funded each month thereafter, until the default is cured.

Results of Operations

We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from May 20, 2021 (inception) through December 31, 2025 were organizational activities and those necessary to prepare for our initial public offering, described below, and since our initial public offering, the search for a prospective initial Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination, at the earliest. We expect to generate non-operating income in the form of interest income from the proceeds of our initial public offering placed in the Trust Account. We expect that we will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a Business Combination.

For the year ended December 31, 2025, we had a net loss of $1,271,227, which consisted of operating expenses of $1,876,932, return of capital subscription shares expense of $164,000, finance costs of $235,630, income tax expense of $4,453 and franchise tax expense of $5,243, partially offset by interest income on investments held in Trust Account of $110,291, gain on change in fair value of return of capital subscription shares liability of $16,400 and reversal of interest and penalties on excise tax liability of $888,340.

For the year ended December 31, 2024, we had a net loss of $2,648,946, which consisted of operating expenses of $3,402,952 and finance costs of $78,039, offset by interest income on investments held in Trust Account of $850,641.

Liquidity, Capital Resources and Going Concern

The securities in our initial public offering were registered under the Securities Act on a Registration Statement on Form S-1 (Registration No. 333-261287). The Registration Statement on Form S-1, as amended (the "Registration Statement"), for the Company's initial public offering was declared effective on December 9, 2021. On December 14, 2021, the Company consummated its initial public offering of 25,000,000 units. Each unit consists of one share of Class A common stock and one-half of one redeemable warrant, with each warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds of $250,000,000.

Simultaneously with the closing of our initial public offering, we consummated the sale of 950,000 private placement units at a price of $10.00 per private placement unit in a private placement with our Sponsor, generating gross proceeds of $9,500,000.

Subsequent to the closing of our initial public offering, we consummated the closing of the sale of 375,000 additional units upon receiving notice of the underwriter's election to partially exercise their over-allotment option, generating additional gross proceeds of $3,750,000. Simultaneously with the exercise of the over-allotment, we consummated the private placement of an additional 3,750 private placement units to our Sponsor, generating gross proceeds of $37,500.

Offering costs for our initial public offering amounted to $14,420,146, consisting of $5,000,000 of underwriting fees, $8,956,250 of deferred underwriting fees payable (which are held in the Trust Account) and $463,896 of other costs. The $8,956,250 of deferred underwriting fee payable is contingent upon the consummation of a Business Combination by June 14, 2026, subject to the terms of the underwriting agreement. On January 28, 2025, Citigroup, as representative of the underwriters, agreed to formally waive the deferred underwriting commissions of $8,956,250 in full, pursuant to a deferred fee waiver letter agreement between Citigroup and the Company upon the successful Business Combination with Ace Green Recycling. The waiver of deferred underwriting commissions is contingent upon such successful Business Combination, thus, as of December 31, 2025, the full amount of $8,956,250 remains outstanding.

Following the closing of the initial public offering and partial exercise of the over-allotment, $256,287,500 of the net proceeds from the initial public offering (including the over-allotment units) and a portion of the private placement units was placed in the Trust Account and invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 of the Investment Company Act, which invest only in direct U.S. government treasury obligations, until the earlier of (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below.

As of December 31, 2025, there is $29,191 of interest income available in the Trust Account available to pay for franchise and income taxes and total amounts withdrawn from the Trust Account to pay the Company's franchise and income tax obligations amounted to $2,869,660 (net of approximately $328,000 cash deposited to the Trust Account to refund the over withdrawal). During the year ended December 31, 2025 the Company withdrew an additional $195,437 from the Trust Account to pay the Company's franchise and income taxes payable. In connection with the First Extension Special Meeting held on June 13, 2023, 23,176,961 shares of the Company's Class A common stock were redeemed. On June 21, 2023, $239,604,919 was withdrawn from the Trust Account to pay the redeeming holders and the 23,176,961 shares of the Company's Class A common stock that were redeemed were cancelled. In connection with the Second Extension Special Meeting held on March 12, 2024, 910,258 shares of the Company's Class A common stock were redeemed. On April 5, 2024, $10,179,663 was withdrawn from the Trust Account to pay the redeeming holders and the 910,258 shares of the Company's Class A common stock that were redeemed were cancelled. In connection with the Third Extension Meeting held on December 10, 2024, 977,625 shares of the Company's Class A common stock were redeemed. On December 11, 2024, $11,497,959 was withdrawn from the Trust Account to pay the redeeming holders and the 977,625 shares of the Company's Class A common stock that were redeemed were cancelled. In connection with the Fourth Extension Special Meeting held on September 10, 2025, 285,269 shares of the Company's Class A common stock were redeemed. On September 12, 2025, an amount of $3,335,294 was withdrawn from the Trust Account to pay such redeeming holders and the 285,269 shares of the Company's Class A common stock that were redeemed were cancelled.

Through March 31, 2024, the Company used portions of the Restricted Funds to pay for general operating expenses in the aggregate amount of $669,440. Management later determined that this use of Restricted Funds was not in accordance with the Charter and the amended Trust Agreement. On April 10, 2024, the misallocated $669,440 of Restricted Funds was replenished to the Company's operating account in the form of an intercompany loan made by Sponsor. On April 3, 2024, the Company paid $720,192 to satisfy income tax liabilities for 2022. On May 16, 2024, the Company paid $820,571 of its 2023 income tax liabilities and on July 22, 2024, the Company paid $79,849 of its 2023 Delaware franchise tax liabilities. During December 2024, the Company paid $658,686 of its 2024 income taxes, inclusive of $43,257 of interest and penalties incurred. As of December 31, 2025, the total amount of prepaid income taxes was $610,976, and the remaining restricted cash balance amounted to $0.

For the year ended December 31, 2025, cash used in operating activities was $837,610. Net loss of $1,271,227 was reduced by interest income on investments held in Trust Account of $110,291, increased by finance costs - amortization of debt issuance of $235,630 and reduced by return of capital subscription shares expense of $164,000 and gain on change in fair value of return of capital subscription shares liability of $16,400. Changes in operating assets and liabilities provided $160,678 of cash for operating activities. Net cash provided by investing activities was $3,479,116 which consisted of cash withdrawn from trust in connection with redemption of $3,335,294 and cash withdrawn from Trust Account to pay penalties and interest on franchise and income taxes of $195,437, partially offset by cash deposited to Trust Account of $51,615. Net cash used in financing activities was $2,435,294, which consisted of redemptions of Class A common stock of $3,335,294, proceeds from promissory note - related party of $500,000 and proceeds from Polar Subscription Agreement of $400,000.

For the year ended December 31, 2024, cash used in operating activities was $2,944,606. Net loss of $2,648,946 was reduced by interest income on investments held in Trust Account of $850,641 and increased by finance costs - amortization of debt issuance of $78,039 and expenses paid by related party of $175,323. Changes in operating assets and liabilities used $301,619 of cash for operating activities. Net cash provided by investing activities was $21,571,727 which consisted of cash withdrawn from Trust Account in connection with redemption of $21,677,622, cash withdrawn from Trust Account to pay franchise and income taxes of $252,108, and cash deposited to Trust Account for extension payments of $358,003. Net cash used in financing activities was $20,309,754, which consisted of redemptions of Class A common stock of $21,677,622, proceeds from convertible and promissory notes of $1,422,182, and reimbursements to related party of $54,314.

In connection with the stockholders' vote at the Special Meeting of Stockholders held on June 13, 2023, 23,176,961 shares were tendered for redemption and approximately $239,604,919 was paid out of the Trust Account to the redeeming stockholders. The Company recorded 1% excise tax based on the amount redeemed or an aggregate amount of $2,396,049 excise tax payable as of December 31, 2023.

In connection with the stockholders' vote at the Special Meeting of Stockholders held on March 12, 2024, 910,258 shares were tendered for redemption and approximately $10,179,663 was paid out of the Trust Account on April 5, 2024 to the redeeming stockholders. The Company has recorded 1% excise tax based on the amount redeemed or an aggregate amount of $101,797.

In connection with the stockholders' vote at the Annual Meeting of Stockholders held on December 10, 2024, 977,625 shares were tendered for redemption and approximately $11,497,959 was paid out of the Trust Account on December 11, 2024 to the redeeming stockholders. The Company has recorded 1% excise tax based on the amount redeemed or an aggregate amount of $114,980 excise tax payable.

In connection with the stockholders' vote at the Special Meeting of Stockholders held on September 10, 2025, 285,269 shares were tendered for redemption and approximately $3,335,294 was paid out of the Trust Account on September 12, 2025 to the redeeming stockholders. The Company has recorded 1% excise tax based on the amount redeemed or an aggregate amount of $33,353 excise tax payable.

Pursuant to Internal Revenue Service ("IRS") regulations, the Company was required to file a return and remit payment for the 2023 excise tax liability of $2,396,049 on or before October 31, 2024. In December 2024, the Internal Revenue Service issued a notice to the Company asserting that $3,284,389 is payable with respect to the 2023 excise tax liability and associated interest and penalties. The Company did not pay the amount due. The Company recognized a total of $1,051,283 in interest and penalties with respect to the 2023 excise tax liability through December 31, 2025. The Company was required to file a return and remit payment for the 2024 excise tax liabilities on or before April 30, 2025.

On November 24, 2025, the IRS published additional information relating to excise tax on repurchases of corporate stock relating specifically to Special Purpose Acquisition Companies ("SPAC"). The IRS published that any SPAC that priced their IPO prior to August 16, 2022 are not subject to excise tax on any redemptions. As such, the Company has reversed $3,688,337 of liabilities relating to excise tax that was accrued in previous quarters. Of the $3,688,337, $2,612,825 was reversed back to accumulated deficit where the initial excise tax in connection with the redemption of class A common stock was recorded and is reflected in the consolidated statements of changes in stockholders' deficit, $888,340 was recorded to reversal of prior year interest and penalties on excise tax liability and $187,171 within general and administrative expense in the accompanying consolidated statements of operations.

At December 31, 2025, we had investments held in the Trust Account of $297,614. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable), to complete our Business Combination. We may withdraw interest from the Trust Account to pay our taxes. We estimate our annual franchise tax obligations, based on the number of shares of Athena common stock authorized and outstanding as of the date of this filing, to be approximately $20,000, which we may pay from funds from the initial public offering held outside of the Trust Account or from interest earned on the funds held in the Trust Account and released to us for this purpose. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust Account. We expect the interest earned on the amount in the Trust Account will be sufficient to pay our franchise and income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

However, as the Trust Account balance may not be sufficient after the payment of our annual taxes, the Company will likely need to raise additional funds prior to the closing of a Business Combination to satisfy further tax liabilities, operational costs and closing costs. In the event that a Business Combination does not close, any loan made to the Company for the purpose of paying overdue tax obligations would be repaid only out of funds held outside the Trust Account. As of the date of this Quarterly Report on Form 10-Q, the Company has not obtained any commitments to provide additional funds and the Company's board of directors has not approved any method of funding the Company's further tax and cost obligations.

At December 31, 2025, we had operating cash of $348,472, restricted cash and cash equivalents to pay tax obligations of $0 and a working capital deficit of $8,004,895. As of December 31, 2025, approximately $29,191 of the amount on deposit in the Trust Account represented interest income, which is available to pay the Company's tax obligations.

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or an affiliate of the Sponsor, or certain of the Company's officers and directors may, but are not obligated to, loan the Company funds as may be required ("Working Capital Loans"). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender's discretion, up to $1.5 million of such Working Capital Loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical to the private placement units.

On July 26, 2024, the Company issued an unsecured promissory note to the Sponsor with a principal amount equal to $422,182. The note is non-interest bearing and payable on the earlier of July 26, 2026 or the Company's initial Business Combination. The Note may be converted into equity securities of the Company on mutually agreeable terms if consented to in writing by the Sponsor. As of December 31, 2025, the Company received the full principal amount of $422,182 under this note.

On October 10, 2024 (effective on April 10, 2024), the Company issued an unsecured and non-interest-bearing promissory note to the Sponsor with a principal amount equal to $1,500,000 to cover the monthly extension payments of the Company and for working capital purposes. The note is payable in full upon the earlier of (a) April 10, 2026 and (b) the date the Company consummates a Business Combination. The Company drew $800,000 from this note on April 10, 2024 to replenish the misallocated Restricted Funds.

On December 6, 2024, the Company and Sponsor entered into the A&R Polar Subscription Agreement with Polar pursuant to which Polar contributed an additional $200,000 to Sponsor (for an aggregate of $500,000), which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the Company must consummate an initial Business Combination and to cover working capital expenses. The A&R Polar Subscription Agreement provides that in connection with the Initial Polar Capital Investment, the Company will repay the entire balance of the Initial Polar Capital Investment to Polar within five business days of the closing of an initial Business Combination of the Company and that Sponsor will transfer and/or the Company will issue on Sponsor's behalf an additional 200,000 shares of Class A common stock to Polar immediately prior to the closing of an initial Business Combination of the Company (for an aggregate of 500,000 shares to be transferred and/or issued to Polar as consideration for the Initial Polar Capital Investment).

On February 9, 2025, the Company and Sponsor entered into the February 2025 Subscription Agreement with Kevin Wright and Jeanine Percival Wright Revocable Trust pursuant to which the Investor contributed $500,000 to Sponsor, which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the Company must consummate an initial Business Combination and to cover working capital expenses. The February 2025 Subscription Agreement provides that in connection with the Contribution, the Company will repay the entire balance of the Contribution to the Investor within five business days of the closing of an initial Business Combination of the Company and that Sponsor will transfer and/or the Company will issue on Sponsor's behalf an additional 300,000 shares of Class A common stock to the Investor immediately prior to the closing of an initial Business Combination of the Company.

The borrowings under the Working Capital Loans structure as of December 31, 2025 and 2024 were $1,800,000 and $1,155,205, respectively.

On August 11, 2025, the Company and Sponsor entered into the August Subscription Agreement with Polar pursuant to which Polar contributed an additional $400,000 to the Company to cover working capital expenses. The August Subscription Agreement provides that in connection with the August Polar Capital Investment, immediately prior to the closing of a Business Combination, the Company will issue to Polar Capital Investments one share of Company class A common stock per $1.00 contributed by Polar ("subscription shares"). The subscription shares meet equity classification under Accounting Standards Codification ("ASC") 815-40. Additionally, in connection with the August Subscription Agreement, an amount equal to Polar's contribution shall be paid by the Company to Polar as a return of capital within five business days of the closing of a Business Combination. Further, the Sponsor shall not sell, transfer, or otherwise dispose of any securities (including warrants) owned by the Sponsor without Polar's consent, other than Permitted Share Transfers, until the full amount of the August Polar Capital Investment has been paid to Polar. The Company and Sponsor are jointly and severally obligated for such repayment. If the closing of a Business Combination occurs, Polar may, in its sole discretion, elect at the closing of such Business Combination or at any time prior to the repayment by the Company either in cash or shares of the Company's Class A common stock at a rate of one share of Class A common stock for each $10 of the August Polar Capital Investment (the "Return of Capital"). In the event that the Sponsor or the Company defaults in its obligations and that such default continues for a period of five business days following written notice to the Sponsor and Company (the "Default Date"), the Company shall immediately issue to Polar 0.1 shares of the Company's Class A common stock (iii) (the "Default Shares") for each $1.00 of the Polar contribution on the Default Date and shall issue Polar an additional 0.1 Default Shares for each $1.00 of the Polar contribution that Polar funded each month thereafter, until the default is cured. Although the Default Shares and Return of Capital shares are equity linked, they are classified as liabilities due to the failure to meet equity classification criteria under ASC 815-40.

In connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standards Board ("FASB") ASC 205-40, "Presentation of Financial Statements - Going Concern" ("ASC 205-40"), management has determined that the Company's liquidity position and mandatory liquidation and subsequent dissolution raise substantial doubt about the Company's ability to continue as a going concern. The Company intends to complete its initial Business Combination before June 14, 2026 (the "mandatory liquidation date"); however, there can be no assurance that the Company will be able to extend the mandatory liquidation date (if the mandatory liquidation date is extended by the full amount of time). No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after June 14, 2026. The consolidated financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

Off-Balance Sheet Arrangements

We have no obligations, assets, or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2025. We do not participate in transactions that create relationships with entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay our Sponsor a monthly fee of $10,000 for office space, and administrative and support services, provided to the Company. We began incurring these fees on December 9, 2021, and will continue to incur these fees monthly until the earlier of the completion of a Business Combination and the Company's liquidation.

The underwriters are entitled to deferred underwriting commissions of $0.35 per unit ($0.55 per unit from the over-allotment units), or $8,956,250 from the closing of the initial public offering and the over-allotment units. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. On January 28, 2025, Citigroup, as representative of the underwriters, agreed to formally waive the deferred underwriting commissions of $8,956,250 in full, pursuant to a deferred fee waiver letter agreement between Citigroup and the Company upon the successful Business Combination with Ace Green Recycling. The waiver of deferred underwriting commissions is contingent upon such successful Business Combination, thus, as of December 31, 2025, the full amount of $8,956,250 remains outstanding.

The holders of Founder Shares, Private Placement Units and units that may be issued upon conversion of Working Capital Loans, if any, are entitled to registration rights pursuant to a certain registration rights agreement, dated December 9, 2021. These holders are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, these holders will have certain "piggyback" registration rights with respect to registration statements filed subsequent to the Company's completion of its initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We have elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.

Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of executive compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an "emerging growth company," whichever is earlier.

Critical Accounting Estimates

The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. Such estimates may be subject to change as more current information becomes available and, accordingly, actual results may differ from these estimates under different assumptions or conditions. As of December 31, 2025, we have identified the following critical accounting estimates:

Return of capital subscription shares liability

At initial recognition, the Return of Capital shares and Default Shares are measured at fair value and recognized in the statement of profit and loss as a subscription expense, consistent with the guidance in ASC 815-10 for fair value measurement. Subsequent changes in fair value are also recognized in profit and loss, in accordance with ASC 815-10, as the instrument does not qualify for equity classification and is accounted for as a liability measured at fair value through earnings.

Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker ("CODM"), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU became effective as of December 31, 2024 and the Company's management adopted in its financial statements and related disclosures.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.