SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus but does not contain all of the information that may be important to you. To better understand the proposals to be considered at the extraordinary general meeting, including the Business Combination Proposal, whether or not you plan to attend such meetings, we urge you to read this proxy statement/prospectus (including the Annexes and the other documents referred to herein) carefully, including the section of this proxy statement/prospectus entitled “Risk Factors” beginning on page 52. See also the section of this proxy statement/prospectus entitled “Where You Can Find More Information”.

Parties to the Business Combination

HCM II

HCM II Acquisition Corp. is a special purpose acquisition company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses.

On August 19, 2024, HCM II consummated its IPO of 23,000,000 HCM II Units, including the issuance of 3,000,000 HCM II Units as a result of the underwriters’ partial exercise of their over-allotment option. Each HCM II Unit was sold at a price of $10.00 per HCM II Unit, generating gross proceeds of $230,000,000. Each HCM II Unit consists of one HCM II Class A Ordinary Share and one-half of one HCM II Warrant, with each whole HCM II Warrant entitling the holder thereof to purchase one HCM II Class A Ordinary Share for $11.50 per share. Simultaneously with the sale of the 23,000,000 HCM II Units in the IPO, HCM II completed the private sale of an aggregate of 6,850,000 Private Placement Warrants, to the Sponsor and Cantor at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds of $6,850,000. Of the 6,850,000 Private Placement Warrants, the Sponsor purchased 4,275,000 Private Placement Warrants and Cantor purchased 2,575,000 Private Placement Warrants.

HCM II’s prospectus for its IPO and the Cayman Constitutional Documents provide that it has until August 21, 2026 to complete an initial business combination.

As of [•], 2025, the Company had an aggregate of 28,750,000 HCM II Class A Ordinary Shares issued and outstanding and 5,750,000 HCM II Class B Ordinary Shares issued and outstanding.

HCM II’s securities are traded on Nasdaq under the ticker symbols “HOND”, “HONDU” and “HONDW”. HCM II’s principal executive offices are located at 100 First Stamford Place, Suite 330, New York, New York 10016 and its phone number is (203) 930-2200.

Terrestrial Energy

Terrestrial Energy, Inc. is a Delaware corporation formed in 2023. Terrestrial Energy is an industry-leading technology company committed to delivering reliable, emission-free, and cost-competitive nuclear energy with a transformative advanced reactor, the Integral Molten Salt Reactor (IMSR).

Terrestrial Energy’s corporate offices are also located at 2730 W. Tyvola Road, Suite 100, Charlotte, NC 28217 and Terrestrial Energy’s phone number is (646) 687-8212.

Recent Developments

In February 2025, the Company completed another closing of the Bridge Round Offering and raised additional units totaling approximately $11.0 million. For additional information about the Bridge Round Offering, please see “Recent Sales of Unregistered Securities of Terrestrial Energy” in this proxy statement/prospectus.

Additionally, on July 1, 2025, Terrestrial Energy closed a private placement in which it sold an aggregate of 62,920 shares of Series A-1 Preferred Stock at a purchase price of $410 per share. Terrestrial Energy received approximately $25.8 million before commissions.

Merger Sub

Merger Sub is a wholly owned subsidiary of HCM II and was formed solely for the purpose of effectuating the Business Combination. Merger Sub was incorporated on March 25, 2025 under the laws of Delaware as a corporation. Merger Sub owns no material assets and does not operate any business.

The mailing address of Merger Sub’s principal executive office is 100 First Stamford Place, Suite 330, Stamford, Connecticut 06902. After the consummation of the Business Combination, its principal executive offices will be that of Terrestrial Energy.

The Proposals to be Submitted at the Extraordinary General Meeting

The Business Combination Proposal

As discussed in this proxy statement/prospectus, HCM II is asking its shareholders to approve by ordinary resolution and adopt the Business Combination Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, and the transactions contemplated thereby. The Business Combination Agreement provides for, among other things, following the Redemption, the Sponsor Share Conversion and the Domestication of HCM II to Delaware, as described below, Merger Sub merging with and into Terrestrial Energy, with Terrestrial Energy surviving as a wholly-owned subsidiary of HCM II, resulting in a combined company whereby New Terrestrial Energy will become the sole stockholder of Terrestrial Energy Opco, and substantially all of the assets and the business of the combined company will be held by Terrestrial Energy Opco and its subsidiaries, as more fully described elsewhere in this proxy statement/prospectus. After consideration of the factors identified and discussed in the section of this proxy statement/prospectus entitled “The Business Combination Proposal — The HCM II Board’s Reasons for the Approval of the Business Combination”, the HCM II Board concluded that the Business Combination met the evaluation criteria for an initial business combination disclosed in the prospectus for the IPO.

Organizational Structure

In connection with the completion of the Business Combination, HCM II will provide its Public Shareholders the opportunity to redeem their Public Shares on the terms and conditions set forth in the Business Combination Agreement and HCM II’s governing documents. HCM II will complete the Redemption of properly tendered Public Shares at least one (1) day prior to the Domestication.

Prior to and as a condition of the Closing, pursuant to the Domestication, HCM II will change its jurisdiction of incorporation by migrating to and domesticating as a Delaware corporation in accordance with Section 388 of the DGCL, as amended, and the Companies Act. For more information, see the section of this proxy statement/prospectus entitled “The Domestication Proposal”.

The following diagrams illustrate in simplified terms the current structure of HCM II and Terrestrial Energy and the expected structure of New Terrestrial Energy immediately following the Closing.

Simplified Pre-Combination Structure

Simplified Post-Combination Structure

Business Combination Agreement Consideration

Pursuant to the Business Combination Agreement, the consideration to be paid in, or in connection with, the Merger in respect of each Terrestrial Common Share and each Terrestrial Series A Preferred that is issued and outstanding immediately prior to the Effective Time, will be a number of shares of New Terrestrial Common Shares equal to the Exchange Ratio (the “Per Share Base Consideration”). The “Exchange Ratio” is equal to the number of shares of New Terrestrial Common Shares equal to the quotient of (i) (a) $925,000,000, divided by (b) the Redemption Price divided by (ii) the Company Fully Diluted Capital (as defined in the Business Combination Agreement).

Closing Conditions

The consummation of the Business Combination Agreement is conditioned upon the satisfaction or waiver by the applicable parties to the Business Combination Agreement of the conditions set forth below. Therefore, unless these conditions are waived (to the extent they can be waived) by the applicable parties to the Business Combination Agreement, the Business Combination may not be consummated. There can be no assurance that the parties to the Business Combination Agreement would waive any such provisions of the Business Combination Agreement.

For further details, see “The Business Combination Proposal — Business Combination Agreement — Closing Conditions”.

Related Agreements

This section describes certain additional agreements entered into or to be entered into pursuant to the Business Combination Agreement. For additional information, see “Business Combination Proposal — Related Agreements”.

PIPE Subscription Agreements

HCM II has entered into PIPE Subscription Agreements each dated as of March 26, 2025, with the PIPE Investors, pursuant to which, among other things, HCM II has agreed to issue and sell, in private placements to close immediately prior to or substantially concurrently with the Closing, an aggregate of five million (5,000,000) shares of New Terrestrial Common Shares for a purchase price of ten dollars ($10.00) per share. The PIPE Investors are permitted, under the PIPE Subscription Agreements, to satisfy their commitments thereunder if they hold shares of New Terrestrial Common Shares that qualify as Non-Redeemed Shares (as defined herein), subject to certain conditions and restrictions set forth in the PIPE Subscription Agreements. The PIPE Subscription Agreements provide, subject to customary conditions, that if the PIPE Investor holds any HCM II Class A Ordinary Shares as of the fifth calendar

day after the effectiveness of the registration statement that contains this proxy statement/prospectus and does not exercise any redemption rights with respect thereto (such shares, the “Non-Redeemed Shares”), then the applicable PIPE Investor may elect to reduce the number of New Terrestrial Common Shares it is required to purchase in the PIPE Financing by the number of such Non-Redeemed Shares. If the PIPE Investors’ party to the PIPE Subscription Agreements exercise this offsetting right, then the gross amount of the proceeds received by Terrestrial Energy in the PIPE Financing will be less than $50,000,000. The New Terrestrial Common Shares to be issued pursuant to the PIPE Subscription Agreements have not been registered under the Securities Act, in reliance upon the exemption provided in Section 4(a)(2) thereof. The HCM II Class A Shares to be issued pursuant to the PIPE Subscription Agreements have not been registered under the Securities Act, in reliance upon the exemption provided in Section 4(a)(2) thereof. The PIPE Subscription Agreements provide that Terrestrial Energy will grant the PIPE Investors customary registration rights with respect to their Terrestrial Common Shares following the Closing. Each of the PIPE Subscription Agreements has been entered into on substantially similar terms and conditions to the form of the PIPE Subscription Agreement. From time-to-time following execution of the Business Combination Agreement and prior to the Closing, HCM II may enter into additional PIPE subscription agreements on forms mutually acceptable to HCM II and Terrestrial Energy.

The consummation of the PIPE Financing is conditioned upon the satisfaction or waiver of certain customary closing conditions by each of the parties, including among other things (i) a minimum of $75 million of cash remaining in the Trust Account (excluding the value of all New Terrestrial Common Shares that qualify as Non-Redeemed Shares) after any redemptions by the HCM II’s public shareholders and before any other payments or distributions (other than in respect of any redemptions) and (ii) the volume weighted average closing price of the VanEck Uranium and Nuclear Energy ETF (the “NLR ETF”) on the NYSE Arca being greater than or equal to $63.00 for the twenty (20) trading days immediately preceding the date that is seven (7) Business Days prior the Closing Date.

Registration Rights Agreement

At the Closing, HCM II, Cantor, the Sponsor and the holder parties thereto will enter into the Registration Rights Agreement, pursuant to which, among other things, the Sponsor, certain Terrestrial Stockholders and the other parties thereto will be entitled to customary piggyback registration rights and demand registration rights, on the terms and subject to the conditions therein, with respect to securities of New Terrestrial Energy that they will hold following the Business Combination.

Transaction Support Agreement

On March 27, 2025, the Supporting Company Stockholders executed and delivered to HCM II a Transaction Support Agreement, pursuant to which each such Supporting Company Stockholder agreed to, among other things, support and vote in favor of the Business Combination Agreement, and the transactions contemplated therein (including the Merger).

Sponsor Support Agreement

Concurrently with the execution and delivery of the Business Combination Agreement, HCM II, the Sponsor, and Terrestrial Energy entered into the Sponsor Support Agreement pursuant to which the Sponsor agreed to, among other things, to vote, or cause to be voted at HCM II shareholder’s meeting, all of its shares of HCM II Class B Ordinary Shares (i) to adopt and approve the Business Combination Agreement and the other documents contemplated therein and the transactions contemplated therein; and (ii) against any proposal that would impede or prevent the transactions contemplated by the Business Combination Agreement or result in a breach of the Business Combination Agreement.

Sponsor Lock-Up Agreement

At the Closing, the Sponsor will enter into the Sponsor Lock-Up Agreement, pursuant to which shares of New Terrestrial Common Shares the Sponsor received upon conversion of its HCM II Class A Ordinary Shares (following the Sponsor Share Conversion) in connection with the Domestication and New Terrestrial Warrants received upon conversion of private placement warrants in connection with the Domestication will be locked up and may not be transferred, subject to certain customary transfer exceptions, from the Closing until the date that is the earliest of (a) the twelve (12) month anniversary of the date of the Sponsor Lock-Up Agreement, and (b) following the 180th day following the Closing, (i) with respect to 50% of the Sponsor Lock-Up Shares and the Sponsor Lock-Up Warrants, the date on which the VWAP (defined below) equals or exceeds $15.00 per share, and (ii) with respect to 100% of

the Sponsor Lock-Up Shares and the Sponsor Lock-Up Warrants, the date on which the VWAP equals or exceeds $20.00 per share (the “Lock-Up Period”). “VWAP” means, for the Domesticated Common Stock for a period of twenty (20) business days ending on any given determination date, the dollar volume-weighted average price for the Domesticated Common Stock on the Nasdaq Capital Market, for such period, as reported by Bloomberg through its “AQR” function (excluding, for the avoidance of doubt, the opening and closing print of each VWAP purchase date), or any successor thereto.

The foregoing description of the Sponsor Lock-Up Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by the terms and conditions of the Sponsor Lock-Up Agreement, the form of which is filed as Exhibit D to the Business Combination Agreement, filed as Exhibit 2.1 to the registration statement of which this proxy statement/prospectus forms a part, and incorporated by reference herein.

Key Holder Lock-Up Arrangement

At the Closing, the Key Holders will enter into the Key Holder Lock-Up Agreement, pursuant to which (a) shares received by the Key Holders as Per Share Base Consideration, and (b) the shares of New Terrestrial Common Shares underlying all other securities of HCM II held by the Key Holders immediately following the Closing that are convertible into, or exercisable or exchangeable for, New Terrestrial Common Shares will be locked up and may not be transferred by the Key Holder thereof, subject to certain customary transfer exceptions, until the expiration of the Lock-Up Period.

The foregoing description of the Key Holder Lock-Up Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by the terms and conditions of the Key Holder Lock-Up Agreement, the form of which is attached hereto as Exhibit E to the Business Combination Agreement, filed as Exhibit 2.1 to the registration statement of which this proxy statement/prospectus forms a part, and incorporated by reference herein.

Letter Agreement

On August 15, 2024, HCM II, its directors and officers and the Sponsor entered into the Letter Agreement containing provisions relating to transfer restrictions of the Founder Shares and Private Placement Warrants, indemnification of the Trust Account, voting obligations, waiver of redemption rights and participation in liquidation distributions from the Trust Account.

Under this Letter Agreement, the Class B ordinary shares and Private Placement Warrants and any Class A Ordinary Shares issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the agreements entered into by our sponsor and management team. Those lock-up provisions provide that such securities are not transferable or saleable (i) in the case of the Class B ordinary shares, until the earlier of (A) one year after the completion of our initial business combination or earlier if, subsequent to our initial business combination, the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination and (B) the date following the completion of our initial business combination on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property and (ii) in the case of the private placement warrants and any Class A ordinary shares issuable upon conversion or exercise thereof, until 30 days after the completion of our initial business combination except in each case (a) to our or Cantor Fitzgerald & Co.’s officers, directors, advisors or consultants, any affiliate or family member of any of our or Cantor Fitzgerald & Co.’s officers, directors, advisors or consultants, any members or partners of the sponsor or their affiliates and funds and accounts advised by such members or partners, any affiliates of the sponsor, or any employees of such affiliates, (b) in the case of an individual, as a gift to such person’s immediate family or to a trust, the beneficiary of which is a member of such person’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of such person; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with any forward purchase agreement or similar arrangement, in connection with an extension of the completion window or in connection with the consummation of a business combination at prices no greater than the price at which the shares or warrants were originally purchased; (f) pro rata distributions from our sponsor or Cantor Fitzgerald & Co. to its respective members, partners or shareholders pursuant to our sponsor’s or

Cantor Fitzgerald & Co.’s limited liability company agreement or other charter documents; (g) by virtue of the laws of the Cayman Islands or our sponsor’s limited liability company agreement upon dissolution of our sponsor or upon dissolution of Cantor Fitzgerald & Co., (h) in the event of our liquidation prior to our consummation of our initial business combination; (i) in the event that, subsequent to our consummation of an initial business combination, we complete a liquidation, merger, share exchange or other similar transaction which results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property or (j) to a nominee or custodian of a person or entity to whom a transfer would be permissible under clauses (a) through (g); provided, however, that in the case of clauses (a) through (g) and clause (j) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreements.

Pursuant to the Sponsor Lock-Up Agreement, Key Holder Lock-Up Agreement and Letter Agreement entered into with HCM II, each of our Sponsor, directors and officers have agreed to restrictions on its ability to transfer, assign, or sell the units, as summarized in the table below.

Cantor Underwriting Agreement and Cantor Engagement

Pursuant to that certain Underwriting Agreement, by and between HCM II and Cantor, as representative of the several underwriters, dated August 15, 2024, HCM II has agreed to pay to Cantor the Deferred Underwriting Commission upon the consummation of an initial business combination. In addition, HCM II has engaged Cantor to act as its financial advisor and placement agent with respect to the Business Combination. Solely in connection with the Business Combination, HCM II and Cantor have agreed that upon consummation of the Business Combination, Cantor will be entitled to, in addition to the Deferred Underwriting Commission, a cash fee of 6.0% of the amount by which the Total Proceeds exceed $230.0 million. Cantor has not provided any report or opinion to HCM II in connection with the Business Combination.

A&R Certificate of Incorporation

In connection with the Business Combination, Terrestrial Energy will amend and restate its certificate of incorporation by adopting the A&R Certificate of Incorporation. The A&R Certificate of Incorporation will, among other things, permit the issuance and ownership of the units of Terrestrial Energy as contemplated to be issued and owned by HCM II upon consummation of the Business Combination and admit HCM II as the sole stockholder of Terrestrial Energy.

The Domestication Proposal

As a condition to closing of the Business Combination pursuant to the terms of the Business Combination Agreement, HCM II must complete the Domestication. The Domestication Proposal, if approved by the holders of HCM II Class B Ordinary Shares, will authorize a change of HCM II’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware. Accordingly, while HCM II is currently governed by the Companies Act, upon the Domestication, New Terrestrial Energy will be governed by the DGCL. There are differences between Cayman Islands corporate law and Delaware corporate law as well as between the Cayman Constitutional Documents and the Proposed Organizational Documents. Accordingly, HCM II encourages shareholders to carefully review the information in the section of this proxy statement/prospectus entitled “The Domestication Proposal — Comparison of Shareholder Rights under Applicable Corporate Law Before and After Domestication”.

Immediately prior to the Domestication, pursuant to the Cayman Constitutional Documents and the Sponsor Support Agreement, each HCM II Class B Ordinary Share then issued and outstanding will automatically convert into one HCM II Class A Ordinary Share. Immediately following such conversion, in connection with the Domestication, (a) each HCM II Class A Ordinary Share issued and outstanding immediately prior to the Domestication will automatically convert into one share of New Terrestrial Common Shares, (b) each whole HCM II Warrant will be automatically converted into a New Terrestrial Warrant on the same terms as the HCM II Warrants, and (c) each HCM II Unit issued and outstanding as of immediately prior to the Domestication will automatically be canceled and each holder thereof will receive one share of New Terrestrial Common Shares and one-half of one New Terrestrial Warrant, per HCM II Unit. No fractional New Terrestrial Warrants will be issued in the process described in clauses (b) or (c).

The HCM II Board has unanimously approved the Domestication Proposal. For additional information, see the section entitled “The Domestication Proposal” of this proxy statement/prospectus.

The Stock Issuance Proposals

HCM II will ask its shareholders to approve, by ordinary resolution, the Stock Issuance Proposals for purposes of complying with Nasdaq Listing Rules, including 5635(a), (b) and (d).

Under Nasdaq Listing Rule 5635(a), shareholder approval is required prior to the issuance of securities in connection with the acquisition of another company if such securities are not issued in a public offering for cash and (A) have, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of common stock (or securities convertible into or exercisable for common stock); or (B) the number of shares of common stock to be issued is or will be equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the stock or securities.

Under Nasdaq Listing Rule 5635(b), shareholder approval is required when any issuance or potential issuance will result in a “change of control” of the issuer.

Under Nasdaq Listing Rule 5635(d), shareholder approval is required prior to the issuance of securities in certain circumstances, including if the number of securities to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance.

The aggregate number of shares of New Terrestrial Common Shares that New Terrestrial Energy will issue in connection with the Business Combination will exceed 20% of both the voting power and the shares of New Terrestrial Common Shares outstanding before such issuance and may result in a change of control of the registrant. Approval of each of the Stock Issuance Proposals is a condition to the consummation of the Business Combination.

For additional information, see the section of this proxy statement/prospectus entitled “The Stock Issuance Proposals”.

The Organizational Documents Proposal

HCM II will ask its shareholders to approve, by special resolution, the Organizational Documents Proposal in connection with the replacement of the Cayman Constitutional Documents, under the Companies Act, with the Proposed Organizational Documents, under the DGCL. The HCM II Board has unanimously approved the Organizational Documents Proposal. Approval of the Organizational Documents Proposal is a condition to the consummation of the Business Combination.

For additional information, see the section of this proxy statement/prospectus entitled “The Organizational Documents Proposal”.

The Advisory Organizational Documents Proposals

HCM II will ask its shareholders to approve by special resolution on a non-binding advisory basis three (3) separate Advisory Organizational Documents Proposals in connection with the replacement of the Cayman Constitutional Documents, under the Companies Act, with the Proposed Organizational Documents, under the DGCL. The HCM II Board has unanimously approved the Advisory Organizational Documents Proposals. Approval of the Advisory Organizational Documents Proposals is not a condition to the consummation of the Business Combination.

A brief summary of each of the Advisory Organizational Documents Proposals is set forth below. These summaries are qualified in their entirety by reference to the complete text of the Proposed Organizational Documents.

Proposal No. 5 — The Advisory Organizational Documents Proposals — To consider and vote upon the following three (3) separate proposals (collectively, the “Advisory Organizational Documents Proposals”) to approve on an advisory non-binding basis by special resolution the following material differences between the Cayman Constitutional Documents and the Proposed Organizational Documents:

Advisory Organizational Documents Proposal 5A — Under the Proposed Organizational Documents, New Terrestrial Energy would be authorized to issue (A) [•] shares of New Terrestrial Common Shares, and (B) [•] shares of New Terrestrial Preferred Stock.

Advisory Organizational Documents Proposal 5B — The Proposed Organizational Documents would adopt (a) Delaware as the exclusive forum for certain stockholder litigation and (b) the federal district courts of the United States of America as the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act and the Exchange Act.

Advisory Organizational Documents Proposal 5C — The Proposed Certificate of Incorporation would require the affirmative vote of at least two-thirds of the total voting power of all then-outstanding shares of New Terrestrial Energy to amend, alter, repeal or rescind certain provisions of the Proposed Certificate of Incorporation.

The Incentive Plan Proposal

HCM II is proposing that its shareholders approve by ordinary resolution the New Equity Incentive Plan, which will become effective upon the Closing and will be used by New Terrestrial Energy on a going-forward basis following the Closing.

For additional information, see the section of this proxy statement/prospectus entitled “The Incentive Plan Proposal”.

The Director Election Proposal

HCM II is proposing that its shareholders approve, effective upon the Closing of the Business Combination, the election of eight (8) directors to serve staggered terms until the date of the first, second and third annual stockholder meetings to be held following the date of Closing, or and until any such director’s successor is duly elected and qualified, subject to such director’s earlier death, disqualification, resignation or removal.

For additional information, see the section of this proxy statement/prospectus entitled “The Director Election Proposal”.

The Adjournment Proposal

If, based on the tabulated vote, there are not sufficient votes at the time of the extraordinary general meeting to authorize HCM II to consummate the Business Combination (because any of the Condition Precedent Proposals have not been approved (including as a result of the failure of any other cross-conditioned Condition Precedent Proposals to be approved), the HCM II Board may submit a proposal to the shareholders to approve by way of an ordinary resolution the extraordinary general meeting to a later date or dates, if necessary or convenient, (i) to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with the approval of one or more proposals at the extraordinary general meeting, (ii) if HCM II determines that one or more of the conditions to Closing is not or will not be satisfied or waived or (iii) to facilitate the Domestication, the Merger or any other Transaction.

For additional information, see the section of this proxy statement/prospectus entitled “The Adjournment Proposal”.

Date, Time and Place of the Extraordinary General Meeting

The extraordinary general meeting will be held on            at            , New York City time, at the offices of King & Spalding LLP at 1185 Avenue of the Americas, New York, NY 10036, and virtually via live webcast at            . Shareholders may attend and vote in person or by visiting            and entering the control number found on their proxy card, voting instruction form or notice they previously received. The purpose of the extraordinary general meeting is to consider and vote on the Business Combination Proposal, the Domestication Proposal, the Stock Issuance Proposals, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal.

Registering for the Extraordinary General Meeting

Any shareholder wishing to attend the extraordinary general meeting virtually should register for the extraordinary general meeting by            at            . To register for the extraordinary general meeting, please follow these instructions as applicable to the nature of your ownership of HCM II Shares:

•        If your shares are registered in your name with Continental and you wish to attend the extraordinary general meeting virtually, go to            , enter the 12-digit control number included on your proxy card or notice of the extraordinary general meeting and click on the “Click here to preregister for the online meeting” link at the top of the page. Just prior to the start of the extraordinary general meeting you will need to log back into the extraordinary general meeting site using your control number. Pre-registration is recommended but is not required in order to attend virtually.

•        Beneficial shareholders (those holding shares through a stock brokerage account or by a bank or other nominee) who wish to attend the extraordinary general meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a

copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial shareholders who e-mail a valid legal proxy will be issued a 12-digit meeting control number that will allow them to register to attend and participate in the online extraordinary general meeting. After contacting Continental, a beneficial holder will receive an e-mail prior to the extraordinary general meeting with a link and instructions for entering the extraordinary general meeting online. Beneficial shareholders should contact Continental at least five (5) Business Days prior to the extraordinary general meeting date in order to ensure access.

Voting Power; Record Date

HCM II’s shareholders will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned HCM II Ordinary Shares at the close of business on [•], 2025, which is the Record Date for the extraordinary general meeting. Shareholders will have one vote for each HCM II Ordinary Share owned at the close of business on the Record Date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. HCM II Warrants do not have voting rights. At the close of business on the Record Date, there were [•] HCM II Ordinary Shares outstanding, of which [•] were Public Shares, with the rest being Founder Shares held by HCM II’s Sponsor.

Quorum and Vote of HCM II Shareholders

A quorum of HCM II shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if the holders of one-third of the issued and outstanding shares entitled to vote at the extraordinary general meeting are represented in person or by proxy (which would include presence at the extraordinary general meeting). Abstentions, while considered present for the purposes of establishing a quorum, will not count as a vote cast at the extraordinary general meeting and otherwise will have no effect on a particular proposal. Broker non-votes are not considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal under Cayman Islands law, assuming a valid quorum is established.

As of the Record Date for the extraordinary general meeting, 9,583,334 HCM II Ordinary Shares would be required to achieve a quorum.

The Sponsor has agreed to vote all the Founder Shares and any Public Shares it may hold in favor of all the proposals being presented at the extraordinary general meeting. As of the Record Date, the Sponsor owned approximately 20% of the issued and outstanding HCM II Ordinary Shares.

The proposals presented at the extraordinary general meeting require the following votes:

•        Business Combination Proposal — The approval of the Business Combination Proposal requires an ordinary resolution under the Companies Act, being the affirmative vote of the holders of a majority of the HCM II Ordinary Shares, who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. HCM II would need only 8,625,001, or approximately 37.5% of the Public Shares not held by affiliates, to be voted in favor of the Business Combination in order to approve the Business Combination Proposal (assuming all outstanding shares are voted). If only the minimum number of shares representing a quorum are voted, no additional shares would need to be voted in favor of the Business Combination in order to approve the Business Combination Proposal. The Business Combination was not structured to require the approval of at least a majority of HCM II’s unaffiliated shareholders because such a vote is not required under Cayman Islands law.

•        Domestication Proposal — The approval of the Domestication Proposal requires a special resolution, being the affirmative vote of holders of at least 66⅔% of the HCM II Class B Ordinary Shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. The holders of HCM II Class A Ordinary Shares will have no right to vote on the Domestication Proposal, in accordance with Article 49.2 of the Cayman Constitutional Documents. In connection with HCM II’s IPO, HCM II entered into agreements with its officers and directors, and the Sponsor, pursuant to which each agreed to vote their HCM II Ordinary Shares in favor of Proposal 1 (The Business Combination Proposal). Such officers and directors and the Sponsor, who combined currently own 100% of the outstanding HCM II Class B Ordinary Shares, have agreed to vote their HCM II Class B

Ordinary Shares, as well as any HCM Ordinary Shares they may purchase prior to the Extraordinary Meeting, in favor of the proposals. As a result, HCM II would not require any additional votes in favor of such proposals in order to have the Domestication Proposal approved.

•        Stock Issuance Proposals — The approval of each of the Stock Issuance Proposals requires an ordinary resolution under the Companies Act, being the affirmative vote of the holders of a majority of the HCM II Ordinary Shares, who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. HCM II would need only 8,625,001, or approximately 37.5% of the Public Shares not held by affiliates, to be voted in favor of the Stock Issuance Proposals in order to approve the Stock Issuance Proposals (assuming all outstanding shares are voted). If only the minimum number of shares representing a quorum are voted, 9,583,334 shares, no additional shares would need to be voted in favor of the Stock Issuance Proposals in order to approve the Stock Issuance Proposals.

•        Organizational Documents Proposal — The approval of the Organizational Documents Proposal requires a special resolution under the Companies Act, being the affirmative vote of holders of at least 66⅔% of the HCM II Ordinary Shares, who being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. As of the Record Date, the Sponsor owned approximately 20% of the issued and outstanding HCM II Ordinary Shares. If only the minimum number of shares representing a quorum are voted, HCM II would only need 638,890, or approximately 2.78% of the Public Shares not held by affiliates, to be voted in favor in order to approve the Organizational Documents Proposal.

•        Advisory Organizational Documents Proposals — The separate approval of each of the Advisory Organizational Documents Proposals, each of which is a non-binding vote, requires a special resolution under the Companies Act, being the affirmative vote of holders of at least 66⅔% of the HCM II Ordinary Shares, who being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. If only the minimum number of shares representing a quorum are voted, HCM II would only need 638,890, or approximately 2.78% of the Public Shares not held by affiliates, to be voted in favor in order to approve the Advisory Organizational Documents Proposal.

•        Incentive Plan Proposal — The approval of the Incentive Plan Proposal requires an ordinary resolution under the Companies Act, being the affirmative vote of the holders of a majority of the HCM II Ordinary Shares, who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. As of the Record Date, the Sponsor owned approximately 20% of the issued and outstanding HCM II Ordinary Shares. As a result, HCM II would need only 8,625,001, or approximately 37.5% of the Public Shares not held by affiliates, to be voted in favor in order to approve the Incentive Plan Proposal (assuming all outstanding shares are voted). If only the minimum number of shares representing a quorum are voted, 9,583,334 shares, no additional shares would need to be voted in favor in order to approve the Incentive Plan Proposal.

•        Director Election Proposal — The approval of the Director Election Proposal requires an ordinary resolution under the Companies Act, being the affirmative vote of the holders of a majority of the HCM II Ordinary Shares, who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. As of the Record Date, the Sponsor owned approximately 20% of the issued and outstanding HCM II Ordinary Shares. As a result, HCM II would need only 8,625,001, or approximately 37.5% of the Public Shares not held by affiliates, to be voted in favor in order to approve the Director Election Proposal (assuming all outstanding shares are voted). If only the minimum number of shares representing a quorum are voted, 9,583,334 shares, no additional shares would need to be voted in favor in order to approve the Director Election Proposal.

•        Adjournment Proposal — The approval of the Adjournment Proposal requires an ordinary resolution under the Companies Act, being the affirmative vote of the holders of a majority of the HCM II Ordinary Shares, who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. As of the Record Date, the Sponsor owned approximately 20% of the issued and outstanding HCM II Ordinary Shares. As a result, HCM II would need only 8,625,001, or approximately 37.5% of the Public Shares not held by affiliates, to be voted in favor in order to approve the Adjournment Proposal (assuming all outstanding shares are voted). If only the minimum number of shares representing a quorum are voted, 9,583,334 shares, no additional shares would need to be voted in favor in order to approve the Adjournment Proposal.

Redemption Rights

Pursuant to the Cayman Constitutional Documents, a Public Shareholder may request to redeem all or a portion of its Public Shares for cash in connection with the completion of the Business Combination. As a Public Shareholder, you will be entitled to receive cash for any Public Shares to be redeemed only if you:

(a)     (i) hold Public Shares or (ii) hold Public Shares through HCM II Units and elect to separate your HCM II Units into the underlying Public Shares and Public Warrants prior to exercising your redemption rights with respect to the Public Shares;

(b)    submit a written request to Continental, including the legal name, phone number and address of the beneficial owner of the Public Shares for which redemption is requested, that HCM II redeem all or a portion of your Public Shares for cash; and

(c)     deliver your share certificates for Public Shares (if any) along with the redemption forms to Continental, physically or electronically through DTC.

Public Shareholders must complete the procedures for electing to redeem their Public Shares in the manner described above prior to 5:00 p.m., Eastern Time, on            (two (2) Business Days before the initial scheduled date of the extraordinary general meeting) in order for their Public Shares to be redeemed.

Public Shareholders may elect to redeem all or a portion of the Public Shares held by them regardless of if or how they vote in respect of the Business Combination Proposal. If the Business Combination is abandoned, the Public Shares will be returned to the respective holder, broker or bank. If the Redemption is consummated, and if a Public Shareholder properly exercises its right to redeem all or a portion of the Public Shares that it holds and timely delivers the certificates for its shares (if any) along with the redemption forms to Continental, HCM II will redeem such Public Shares for a per-share price, payable in cash, equal to the pro rata portion of the Trust Account, calculated as of two (2) Business Days prior to the consummation of the Business Combination. For illustrative purposes, as of the Record Date, this would have amounted to approximately $[•] per issued and outstanding Public Share. If a Public Shareholder exercises its redemption rights in full, then it will be electing to exchange its Public Shares for cash and will no longer own Public Shares. See the section of the proxy statement/prospectus entitled “Extraordinary General Meeting of HCM II — Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your Public Shares for cash.

Notwithstanding the foregoing, a Public Shareholder, together with any affiliate of such Public Shareholder or any other Person with whom such Public Shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its Public Shares with respect to more than an aggregate of 15% of the Public Shares. Accordingly, if a Public Shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the Public Shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The Sponsor has agreed to, among other things, vote in favor of all proposals being presented at the extraordinary general meeting, regardless of how the Public Shareholders vote. As of the Record Date, the Sponsor owned approximately 20% of the issued and outstanding HCM II Ordinary Shares.

Holders of the Public Warrants will not have redemption rights with respect to the Public Warrants.

Appraisal Rights

Neither HCM II’s shareholders nor the holders of Public Warrants have appraisal rights in connection with the Business Combination or the Domestication under Cayman Islands law or under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. HCM II has engaged Sodali & Co to assist in the solicitation of proxies.

If a shareholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the extraordinary general meeting. A shareholder also may change its vote by submitting a later-dated proxy as described in the section of this proxy statement/prospectus entitled “Extraordinary General Meeting of HCM II — Revoking Your Proxy”.

Certain Interests of HCM II’s Directors and Officers and Others in the Business Combination

When you consider the recommendation of the HCM II Board in favor of approval of the Business Combination Proposal and the other Shareholder Proposals included herein, you should keep in mind that the Sponsor and HCM II’s directors and officers have interests in such proposals that are different from, in addition to and/or in conflict with, those of the HCM II shareholders generally. Further, HCM II’s officers and directors have additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity, which are set forth in more detail in the section titled “Other Information Related to HCM II — Conflicts of Interest”. We believe there were no such opportunities that were not presented to HCM II for a potential business combination as a result of the existing fiduciary or contractual obligations of our officers and directors to other entities. The HCM II Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and Business Combination Agreement and in recommending to our shareholders that they vote in favor of the Shareholder Proposals presented at the extraordinary general meeting, including the Business Combination Proposal. HCM II shareholders should take these interests into account in deciding whether to approve the Shareholder Proposals presented at the extraordinary general meeting, including the Business Combination Proposal. These interests include, among other things:

•        Our Sponsor purchased 5,750,000 HCM II Class B Ordinary Shares, which it purchased for $25,000, or approximately $0.004 per share, in a private placement prior to the consummation of the IPO. In connection with the IPO, the Sponsor transferred 25,000 Class B Ordinary Shares to each of our three independent directors at their original purchase price, resulting in the Sponsor holding 5,675,000. The Sponsor is controlled by Shawn Matthews, HCM II’s Chairman and Chief Executive Officer who maintains sole control over the voting and disposition of the Founder Shares and the Private Placement Warrants held by the Sponsor. Mr. Matthews has an economic interest in 2,950,000, or approximately 51.3%, of the Founder Shares held by the Sponsor and $4,000,000 in aggregate principal amount of Terrestrial Convertible Notes. The remaining economic interest in the Founder Shares held by the Sponsor is indirectly held by seventeen non-managing sponsor investors. No other director or officer of HCM II has economic interests in the Founder Shares held by the Sponsor. The 5,675,000 shares of New Terrestrial Common Shares that the Sponsor and its permitted transferees will hold following the Business Combination, if unrestricted and freely tradable, would have had an aggregate market value of approximately $            million based upon the closing price of $            per HCM II Ordinary Share on Nasdaq on            , 2025, the most recent practicable date prior to the date of this proxy statement/prospectus.

•        Our Sponsor purchased 4,275,000 Private Placement Warrants for $4,275,000, or $1.00 per Private Placement Warrant, in private placements that closed simultaneously with the IPO. The Sponsor is controlled by Shawn Matthews, HCM II’s Chairman and Chief Executive Officer. Mr. Matthews has an economic interest in 775,000, or approximately 18.1%, of the Private Placement Warrants held by the Sponsor, who maintains sole control over the voting and disposition of the Founder Shares and the Private Placement Warrants held by the Sponsor. The remaining economic interest in the Private Placement Warrants held by the Sponsor is indirectly held by seventeen non-managing sponsor investors. No other director or officer of HCM II has economic interests in the Private Placement Warrants. The 4,275,000 New Terrestrial Warrants that the Sponsor will hold following the Business Combination, if unrestricted and freely tradable, would have had an aggregate market value of approximately $            million based upon the closing price of $            per Public Warrant on Nasdaq on            , 2025, the most recent practicable date prior to the date of this proxy statement/prospectus.

•        Messrs. Andrew Brenner, Michael Connor, and Jacob Loveless, the independent directors of HCM II, each hold 25,000 Founder Shares, which they purchased for an aggregate of $300, or approximately $0.004 per share, in a private placement prior to the consummation of the IPO. Such shares would become worthless if HCM does not complete a business combination within the applicable time period, as such HCM II Initial Shareholders have waived any right to liquidation proceeds with respect to these shares. Such Founder Shares have an aggregate market value of approximately $            for each independent director based on the closing price of HCM II Class A Ordinary Shares of $            on Nasdaq on            , 2025 the record date for the Extraordinary Meeting. For Messrs. Brenner, Connor and Loveless, aggregate value at risk if HCM II does not complete a business combination could be as much as approximately $            (based upon the closing price of $            per HCM II Class A Ordinary Share on            , 2025, the most recent practicable date prior to the date of this proxy statement/prospectus).

•        Given the differential in the purchase price that the Sponsor and the independent directors of HCM II paid for the Founder Shares as compared to the price of the HCM II Class A Ordinary Shares included in the HCM II Units sold in the IPO, the Sponsor and the independent directors of HCM II may earn a positive rate of return on their respective investments even if the shares of New Terrestrial Common Shares trade below $10.00 per share and the Public Shareholders experience a negative rate of return following the Closing. Accordingly, the economic interests of the Sponsor and the independent directors of HCM II diverge from the economic interests of Public Shareholders because the Sponsor and the independent directors of HCM II will realize a gain on their respective investments from the completion of any business combination while Public Shareholders will realize a gain only if the post-closing trading price exceeds $10.00 per share.

•        Our Sponsor will lose its entire investment in us if we do not complete a business combination by August 19, 2026 (or if such date is extended at a duly called meeting of the HCM II shareholders, such later date). If we do not consummate a business combination by such date, as promptly as reasonably possible but not more than ten (10) Business Days thereafter, we are required to redeem the Public Shares for a pro rata portion of the funds held in the Trust Account, subject to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the warrants may be worthless. In such event, the 5,675,000 Founder Shares purchased by our Sponsor for approximately $25,000 and the 75,000 Founder Shares purchased by the independent directors of HCM II would be worthless because following the redemption of the Public Shares, we would likely have few, if any, net assets and because the Sponsor and the independent directors of HCM II have agreed to waive their rights to liquidating distributions from the Trust Account with respect to such shares if we fail to complete a business combination within the required period. Additionally, in such event, the 4,275,000 Private Placement Warrants that the Sponsor paid $4,275,000 to purchase will expire worthless.

•        In addition to the interests described above, Mr. Matthews holds $4,000,000 aggregate principal amount of Terrestrial Convertible Notes, which in connection with the Business Combination, will be cancelled and converted into a number of shares of New Terrestrial Common Shares equal to $4,000,000, plus any accrued and unpaid interest thereon, divided by seventy-five percent (75%) of the Redemption Price. Assuming a Redemption Price of $[•] per HCM II Class A ordinary share, Mr. Matthews will receive [•] shares of New Terrestrial Common Shares in exchange for $4,000,000 aggregate principal amount of Terrestrial Convertible Notes (such amount of shares of New Terrestrial Common Shares will increase prior to Closing due to payment-in-kind interest accrued on the Terrestrial Convertible Notes). If we do not consummate the Business Combination, Mr. Matthews will continue to hold $4,000,000 aggregate principal amount of Terrestrial Convertible Notes, which will not be converted into securities of a public company.

•        In addition to the interests described above, Mr. Matthews holds 40,000 Terrestrial Warrants, which in connection with the Business Combination, will automatically become exercisable, in accordance with the terms and conditions of such Terrestrial Warrant, for the Per Share Base Consideration. If we do not consummate the Business Combination, Mr. Matthews will continue to hold 40,000 Terrestrial Warrants, which will not be converted into securities of a public company.

•        HCM II’s Sponsor, officers and directors have agreed not to redeem any of the Founder Shares or HCM II Ordinary Shares held by them in connection with a shareholder vote to approve the Business Combination.

•        The continuation of Shawn Matthews, our Chairman and Chief Executive Officer, as a director of New Terrestrial Energy following the Closing. As such, in the future he may receive any cash fees, stock options or stock awards that the New Terrestrial Board determines to pay to its directors.

•        Our existing officers and directors will be eligible for continued indemnification and continued coverage under a directors’ and officers’ liability insurance policy for a period of six years after the Business Combination.

•        In connection with the Closing, our Sponsor, officers and directors would be entitled to the repayment of any outstanding working capital loan and advances that have been made to HCM II. As of the date of this proxy statement/prospectus, approximately $[•] was outstanding under such working capital loans.

•        Because HCM II has certain provisions in its organizational documents that waive the corporate opportunities doctrine on an ongoing basis, HCM II’s officers and directors have not been obligated and continue to not be obligated to bring all corporate opportunities to HCM II. The potential conflict of interest relating to the waiver of the corporate opportunities doctrine in HCM’s organizational documents did not, to our knowledge, impact our search for an acquisition target or prevent us from reviewing any opportunities as a result of such waiver.

•        Upon the Closing, subject to the terms and conditions of the Business Combination Agreement, our Sponsor, our officers and directors and their respective affiliates may be entitled to reimbursement for any reasonable out-of-pocket expenses related to identifying, investigating and consummating an initial business combination, and repayment of any other loans, if any, and on such terms as to be determined by HCM II from time to time, made by our Sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. As of the date of this proxy statement/prospectus, an aggregate of approximately $[•] of reimbursable out-of-pocket expenses were outstanding.

•        Pursuant to the Registration Rights Agreement, HCM II’s officers and directors, and the Sponsor and its members will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the New Terrestrial Common Shares and New Terrestrial Warrants held by such parties following the consummation of the Business Combination.

As a result of the foregoing interests, the Sponsor and HCM II’s directors and officers will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms that would be less favorable to Public Shareholders. In the aggregate, the Sponsor has approximately $[•] million at risk that depends upon the completion of a business combination. Such amount consists of (a) approximately $[•] million representing the value of the Founder Shares held by the Sponsor (based upon the closing price of $[•] per HCM II Ordinary Share on Nasdaq on [•], 2025, the most recent practicable date prior to the date of this proxy statement/prospectus), and (b) $[•] million representing the value of the Private Placement Warrants purchased by the Sponsor (using the $1.00 per warrant purchase price).

The existence of financial and personal interests of one or more of HCM II’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of HCM II and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the Shareholder Proposals.

The financial and personal interests of the Sponsor, as well as HCM II’s directors and officers, may have influenced their motivation in identifying and selecting Terrestrial Energy as a business combination target, completing an initial business combination with Terrestrial Energy and influencing the operation of the business following the initial business combination. In considering the recommendations of the HCM II Board to vote for the Shareholder Proposals, its shareholders should consider these interests.

In considering whether to approve the Business Combination, you should also take into account that Terrestrial Energy’s executive officers and directors may have interests in the Business Combination that are different from, or in addition to, those of other Terrestrial Stockholders generally as well as HCM II shareholders and warrant holders generally.

These interests include, among other things:

•        To the extent that the Terrestrial Energy directors and executive officers are also Terrestrial Stockholders prior to the Closing, they will also have rights to receive New Terrestrial Energy securities in the same manner as other Terrestrial Stockholders, in accordance with the Business Combination Agreement.

•        If the Business Combination with HCM II is completed, Terrestrial Energy will designate seven members to the Board of Directors of the New Terrestrial Energy, including Simon Irish, Frederick Buckman, Hugh MacDiarmid, David Hill, William Johnson, Charles Pardee, and Robert W. Jones who are currently directors of Terrestrial, each of whom will serve as the nominees. The following executive officers of Terrestrial are expected to be appointed as executive officers of New Terrestrial Energy following the consummation of the Business Combination: Simon Irish, Brian Thrasher, William Smith, and David LeBlanc.

•        The Business Combination Agreement provides for the continued indemnification of Terrestrial Energy’s current directors and officers and the continuation of directors and officers liability insurance covering Terrestrial Energy’s current directors and officers.

•        Pursuant to the Registration Rights Agreement, certain of the former stockholders of Terrestrial Energy will have customary registration rights, including shelf, demand and piggy-back rights, subject to cooperation and cut-back provisions, with respect to the shares of New Terrestrial Energy held by such parties following the consummation of the Business Combination.

For additional information, see the section of this proxy statement/prospectus entitled “The Business Combination Proposal — Interests of Certain HCM II Persons in the Business Combination” and “The Business Combination Proposal — Interests of the Terrestrial Energy Directors and Executive Officers”.

Compensation Received by the Sponsor, its Affiliates and HCM II Directors and Executive Officers

Ownership of New Terrestrial Energy

Upon consummation of the Business Combination, the post-Closing share ownership of New Terrestrial Energy under (1) the No Redemption Scenario, (2) the 25% Redemptions Scenario, (3) the 50% Redemptions Scenario, (4) the 75% Redemptions Scenario and (5) the Maximum Contractual Redemptions Scenario, excluding the dilutive effect of Public Warrants, Private Placement Warrants, Terrestrial Energy Warrants, and Terrestrial Energy Options would be as follows:

____________

(1)      Assumes that no Public Shareholders exercise redemption rights with respect to their HCM II Class A Ordinary Shares for a pro rata share of the funds in the Trust Account.

(2)      Assumes that 25% of maximum contractual redeemable shares, or 3,330,536 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $34.4 million based on a redemption price of approximately $10.33 per share.

(3)      Assumes that 50% of maximum contractual redeemable shares, or 6,661,073 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $68.8 million based on a redemption price of approximately $10.33 per share.

(4)      Assumes that 75% of maximum contractual redeemable shares, or 9,991,609 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $103.2 million based on a redemption price of approximately $10.33 per share.

(5)     The maximum contractual redemptions scenario assumes that 13,322,146 Public Shares are redeemed for aggregate redemption payments of $137.7 million, assuming a $10.33 per share redemption price. The Business Combination Agreement contains two conditions to the Closing that, after giving effect to the transactions contemplated hereby (including any PIPE Financing)

(i) HCM II shall have at least $5,000,001 of net tangible assets, and (ii) the Available Closing SPAC Cash shall not be less than $150,000,000. The “maximum contractual redemptions scenario” represents the maximum number of Public Shares that may be redeemed while satisfying the conditions mentioned above. If both companies agree to waive such conditions, an additional 9,677,854 Public Shares may be redeemed under the maximum redemption scenario.

(6)      If the ExchangeCo Recapitalization occurs prior to or concurrently with the closing of the Business Combination, ExchangeCo shareholders will hold equity interests in ExchangeCo, a subsidiary of Terrestrial Energy, and will not directly own any equity interests in Terrestrial Energy. Their voting power will be exercisable through their ownership of Terrestrial Special Voting Shares and, upon the cancellation of the Terrestrial Special Voting Shares and issuance of New Terrestrial Special Voting Stock in exchange therefor, through their ownership of New Terrestrial Special Voting Stock. The ownership percentage is 20.1% under no redemption scenario, 20.8% under 25% redemptions scenario, 21.5% under 50% redemptions scenario, 22.3% under 75% redemptions scenario, and 23.1% under maximum contractual redemptions scenario.

(7)      Figures presented on a non-diluted basis to exclude the dilutive effect of Public Warrants, Private Placement Warrants, Terrestrial Energy Warrants, and Terrestrial Energy Options. With respect to the New Terrestrial Common Shares underlying the Terrestrial Convertible Notes, including those issued in connection with the 2024 bridge financing, the figures presented assume the conversion of all Terrestrial Convertible Notes in connection with the consummation of the Business Combination into 3,779,067 New Terrestrial Common Shares without the need to issue any additional shares in respect of the contingent value rights. The figures presented also assume no repurchases are consummated pursuant to the Terrestrial Call Options.

The following table illustrates varying ownership levels of New Terrestrial Energy immediately following the Business Combination on a fully diluted basis(1):

____________

(1)      This table makes the same assumptions as in the preceding ownership table, except that this table reflects the 11,500,000 shares underlying the Public Warrants, the 6,850,000 shares underlying the Private Placement Warrants, the 12,774,886 shares underlying the Terrestrial Energy Warrants, and the 17,369,649 shares underlying the Terrestrial Energy Options.

(2)      Includes the 11,500,000 shares underlying the Public Warrants.

(3)      Includes the 6,850,000 shares underlying the Private Placement Warrants.

(4)      HCM II is permitted to borrow up to $2,500,000 from the Sponsor to cover ongoing expenses related to its operations and the consummation of the business combination and to finance transaction costs associated with the business combination, including pursuant to a Convertible Promissory Note provided for in the Business Combination Agreement. The Convertible Promissory Note may be convertible into private placement warrants of New Terrestrial at $1.50 per warrant upon Closing, and up to $1,500,000 of any other Working Capital Loan may be convertible into private placement warrants of New Terrestrial at a price of $1.00 per warrant upon Closing, which could result in additional dilution to the Public Shareholders. However, as of the date of this table, no amounts are outstanding under these arrangements, and therefore, no related dilution is reflected herein.

(5)      Includes the 12,774,886 shares underlying the Terrestrial Energy Warrants and the 17,369,649 shares underlying the Terrestrial Energy Options.

(6)      If the ExchangeCo Recapitalization occurs prior to or concurrently with the closing of the Business Combination, ExchangeCo shareholders will hold equity interests in ExchangeCo, a subsidiary of Terrestrial Energy, and will not directly own any equity interests in Terrestrial Energy. Their voting power will be exercisable through their ownership of Terrestrial Special Voting Shares and, upon the cancellation of the Terrestrial Special Voting Shares and issuance of New Terrestrial Special Voting Stock in exchange therefor, through their ownership of New Terrestrial Special Voting Stock. The ownership percentage is 13.5% under no redemption scenario, 13.8% under 25% redemptions scenario, 14.1% under 50% redemptions scenario, 14.5% under 75% redemptions scenario, and 14.8% under maximum contractual redemptions scenario.

(7)      With respect to the New Terrestrial Common Shares underlying the Terrestrial Convertible Notes, including those issued in connection with the 2024 bridge Round Offering, the figures presented assume the conversion of all Terrestrial Convertible Notes in connection with the consummation of the Business Combination into 3,779,067 New Terrestrial Common Shares without the need to issue any additional shares in respect of the contingent value rights. The figures presented also assume no repurchases are consummated pursuant to the Terrestrial Call Options.

(8)      The maximum contractual redemptions scenario assumes that 13,322,146 Public Shares are redeemed for aggregate redemption payments of $137.7 million, assuming a $10.33 per share redemption price. The Business Combination Agreement contains two conditions to the Closing that, after giving effect to the transactions contemplated hereby (including any PIPE Financing) (i) HCM II shall have at least $5,000,001 of net tangible assets, and (ii) the Available Closing SPAC Cash shall not be less than $150,000,000. The “maximum contractual redemptions scenario” represents the maximum number of Public Shares that may be redeemed while satisfying the conditions mentioned above. If both companies agree to waive such conditions, an additional 9,677,854 Public Shares may be redeemed under the maximum redemption scenario.

In addition to the changes in percentage ownership depicted above, variation in the levels of redemptions will impact the dilutive effect of certain equity issuances related to the Business Combination, which would not otherwise be present in an underwritten public offering. Increasing levels of redemptions will increase the dilutive effect of these issuances on non-redeeming holders of the HCM II Public Shares.

All of the relative percentages above are for illustrative purposes only and are based upon certain assumptions as described in the section entitled “Frequently Used Terms” and, with respect to the determination of the “Maximum Contractual Redemptions,” the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” Should one or more of the assumptions prove incorrect, actual ownership percentages may vary materially from those described in this proxy statement/prospectus as anticipated, believed, estimated, expected or intended. See “Unaudited Pro Forma Condensed Combined Financial Information.”

Dilution to HCM II’s Shareholders

HCM II’s net tangible book value as of March 31, 2025 was $(12,081) thousand, or $(0.42) per share, based on 23,000,000 HCM II Class A Ordinary Shares and 5,750,000 HCM II Class B Ordinary Shares outstanding as of that date.

The following table illustrates the changes in net tangible book value and dilution to existing shareholders at varying redemption levels (in thousands, except share and per share data).

The following table illustrates the as adjusted net tangible book value to HCM II’s shareholders and decrease in net tangible book value to HCM II’s shareholders as a result of transaction costs incurred by HCM II, PIPE Financing, and funds released from the trust at de-SPAC (in thousands, except share and per share data).

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(1)      Assumes that no Public Shareholders exercise redemption rights with respect to their HCM II Class A Ordinary Shares for a pro rata share of the funds in the Trust Account.

(2)      Assumes that 25% of maximum contractual redeemable shares, or 3,330,536 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $34.4 million based on a redemption price of approximately $10.33 per share.

(3)      Assumes that 50% of maximum contractual redeemable shares, or 6,661,073 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $68.8 million based on a redemption price of approximately $10.33 per share.

(4)      Assumes that 75% of maximum contractual redeemable shares, or 9,991,609 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $103.2 million based on a redemption price of approximately $10.33 per share.

(5)      The maximum contractual redemptions scenario assumes that 13,322,146 Public Shares are redeemed for aggregate redemption payments of $137.7 million, assuming a $10.33 per share redemption price. The Business Combination Agreement contains two conditions to the Closing that, (i) after giving effect to the transactions contemplated hereby (including any PIPE Financing) HCM II shall have at least $5,000,001 of net tangible assets, and (ii) the Available Closing SPAC Cash shall not be less than $150,000,000. The “maximum contractual redemptions scenario” represents the maximum number of Public Shares that may be redeemed while satisfying the conditions mentioned above. If both companies agree to waive such conditions, an additional 9,677,854 Public Shares may be redeemed under the maximum redemption scenario.

To the extent that additional shares are issued pursuant to the foregoing, HCM II’s shareholders will experience further dilution. In addition, HCM II may enter into other transactions. To the extent it issues such securities, investors and HCM II’s shareholders may experience further dilution.

The following table presents all possible sources and the extent of dilution that shareholders who elect not to redeem their shares may experience in connection with the business combination, including sources not included in the tables above with respect to the determination of net tangible book value per share.

____________

(1)      Assumes that no Public Shareholders exercise redemption rights with respect to their HCM II Class A Ordinary Shares for a pro rata share of the funds in the Trust Account.

(2)      Assumes that 25% of maximum contractual redeemable shares, or 3,330,536 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $34.4 million based on a redemption price of approximately $10.33 per share.

(3)      Assumes that 50% of maximum contractual redeemable shares, or 6,661,073 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $68.8 million based on a redemption price of approximately $10.33 per share.

(4)      Assumes that 75% of maximum contractual redeemable shares, or 9,991,609 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $103.2 million based on a redemption price of approximately $10.33 per share.

(5)      The maximum contractual redemptions scenario assumes that 13,322,146 Public Shares are redeemed for aggregate redemption payments of $137.7 million, assuming a $10.33 per share redemption price. The Business Combination Agreement contains two conditions to the Closing that, after giving effect to the transactions contemplated hereby (including any PIPE Financing) (i) HCM II shall have at least $5,000,001 of net tangible assets, and (ii) the Available Closing SPAC Cash shall not be less than $150,000,000. The “maximum contractual redemptions scenario” represents the maximum number of Public Shares that may be redeemed while satisfying the conditions mentioned above. If both companies agree to waive such conditions, an additional 9,677,854 Public Shares may be redeemed under the maximum redemption scenario.

(6)      Includes the 11,500,000 shares underlying the Public Warrants.

(7)      Includes the 6,850,000 shares underlying the Private Placement Warrants.

(8)      HCM II is permitted to borrow up to $2,500,000 from the Sponsor to cover ongoing expenses related to its operations and the consummation of the business combination and to finance transaction costs associated with the business combination, including pursuant to a Convertible Promissory Note provided for in the Business Combination Agreement. The Convertible Promissory Note may be convertible into private placement warrants of New Terrestrial at $1.50 per warrant upon Closing, and up to $1,500,000 of any other Working Capital Loan may be convertible into up to 1,500,000 private placement warrants of New Terrestrial at a price of $1.00 per warrant upon Closing, which could result in additional dilution to the Public Shareholders. However, as of the date of this table, no amounts are outstanding under these arrangements, and therefore, no related dilution is reflected herein.

(9)      Includes the 12,774,886 shares underlying the Terrestrial Energy Warrants and the 17,369,649 shares underlying the Terrestrial Energy Options.

(10)    If the ExchangeCo Recapitalization occurs prior to or concurrently with the closing of the Business Combination, ExchangeCo shareholders will hold equity interests in ExchangeCo, a subsidiary of Terrestrial Energy, and will not directly own any equity interests in Terrestrial Energy. Their voting power will be exercisable through their ownership of Terrestrial Special Voting Shares and, upon the cancellation of the Terrestrial Special Voting Shares and issuance of New Terrestrial Special Voting Stock in exchange therefor, through their ownership of New Terrestrial Special Voting Stock. The ownership percentage is 13.5% under no redemption scenario, 13.8% under 25% redemptions scenario, 14.1% under 50% redemptions scenario, 14.5% under 75% redemptions scenario, and 14.8% under maximum contractual redemptions scenario.

(11)    With respect to the New Terrestrial Common Shares underlying the Terrestrial Convertible Notes, including those issued in connection with the 2024 bridge financing, the figures presented assume the conversion of all Terrestrial Convertible Notes in connection with the consummation of the Business Combination into 3,779,067 New Terrestrial Common Shares without the need to issue any additional shares in respect of the contingent value rights. The figures presented also assume no repurchases are consummated pursuant to the Terrestrial Call Options.

HCM II issued shares in an initial registered offering at $10.00 per share. After giving effect to the IPO, the issued and outstanding Public Shares of the HCM II are 23,000,000, assuming no redemptions. In connection with the de-SPAC transaction, 62,355,465 shares will be issued to Terrestrial Energy Stockholders and 3,779,067 shares will be issued to holders of Terrestrial Convertible Notes, assuming no redemptions. Redemption levels of 0%, 25%, 50%, 75% and maximum have been disclosed in the table below as required by Item 1604(c) (in thousands, except share and per share data).

For purposes of Item 1604(c)(1), New Terrestrial Energy would have 99,884,532 total shares after giving effect to the de-SPAC transaction under the no redemptions scenario. Where there are no redemptions are none, the company valuation is based on HCM II offering price of the securities in the initial registered offering price per share of $10.00 is therefore calculated as: $10.00 (per share IPO price) times 99,884,532 shares, or $998,845 thousand. The following table illustrates the valuation at the offering Price of the securities in the initial registered offering price of $10.00 per share for each redemption scenario:

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(1)      Assumes that no Public Shareholders exercise redemption rights with respect to their HCM II Class A Ordinary Shares for a pro rata share of the funds in the Trust Account.

(2)      Assumes that 25% of maximum contractual redeemable shares, or 3,330,536 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $34.4 million based on a redemption price of approximately $10.33 per share.

(3)      Assumes that 50% of maximum contractual redeemable shares, or 6,661,073 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $68.8 million based on a redemption price of approximately $10.33 per share.

(4)      Assumes that 75% of maximum contractual redeemable shares, or 9,991,609 Public Shares, will be redeemed by Public Shareholders for an aggregate payment of approximately $103.2 million based on a redemption price of approximately $10.33 per share.

(5)      The maximum contractual redemptions scenario assumes that 13,322,146 Public Shares are redeemed for aggregate redemption payments of $137.7 million, assuming a $10.33 per share redemption price. The Business Combination Agreement contains two conditions to the Closing that, (i) after giving effect to the transactions contemplated hereby (including any PIPE Financing) HCM II shall have at least $5,000,001 of net tangible assets, and (ii) the Available Closing SPAC Cash shall not be less than $150,000,000. The “maximum contractual redemptions scenario” represents the maximum number of Public Shares that may be redeemed while satisfying the conditions mentioned above. If both companies agree to waive such conditions, an additional 9,677,854 Public Shares may be redeemed under the maximum redemption scenario.

The required disclosure is not a guarantee that the trading price of the combined company will not be below the IPO offering price of HCM II, nor is the disclosure a guarantee the company valuation will attain one of the stated levels of valuation.

Regulatory Matters

Neither HCM II nor Terrestrial Energy are aware of any material regulatory approvals or actions that are required for completion of the Business Combination, other than the regulatory notices and approvals discussed in “The Business Combination Proposal — Business Combination Agreement — Closing Conditions — Conditions to the Obligations of Each Party”. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.

Recommendation to Shareholders of HCM II

The HCM II Board believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of HCM II and HCM II’s shareholders and unanimously recommends that its shareholders vote “FOR” the approval of the Business Combination Proposal, “FOR” the approval of the Domestication Proposal, “FOR” the approval of each of the Stock Issuance Proposals, “FOR” the approval of the Organizational Documents Proposal, “FOR” the approval, on an advisory basis, of each of the separate Advisory Organizational Documents Proposals, “FOR” the approval of the Incentive Plan Proposal, “FOR” the approval of the Director Election Proposal and “FOR” the approval of the Adjournment Proposal, if presented to the extraordinary general meeting.

The HCM II Board, after careful consideration, determined that the Business Combination is fair in the best interests of HCM II and its shareholders, and approved, among other things, the Business Combination Agreement, the Business Combination and the other agreements and transactions contemplated thereby. See the subsection entitled “The Extraordinary General Meeting — Recommendation of the Board” for more information.

The existence of financial and personal interests of one or more of HCM II’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of HCM II and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, the Sponsor and HCM II’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section of this proxy statement/prospectus entitled “The Business Combination Proposal — Interests of Certain HCM II Persons in the Business Combination”.

Background and Material Terms of the Business Combination

HCM II is a special purpose acquisition company that was incorporated in April, 2024 as a Cayman Islands exempted company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Starting August 2024, HCM II’s management and its advisors surveyed the landscape of potential acquisition opportunities for acquisition targets. From August 20, 2024 to November 6, 2024, HCM II reviewed more than sixteen (16) acquisition opportunities across various industries and had active discussions with approximately three (3) potential business targets. HCM II management ultimately decided not to pursue such alternate targets, and instead focus its efforts on Terrestrial Energy. The terms of the Business Combination Agreement are the result of negotiations between the representatives of HCM II and Terrestrial Energy, which occurred between November 2024 and February 2025.

On the Signing Date, HCM II entered into the Business Combination Agreement with Terrestrial Energy and Merger Sub, pursuant to which, among other things, subject to shareholder approval, following the Domestication, Merger Sub will merge with and into Terrestrial Energy, with Terrestrial Energy surviving as a wholly owned subsidiary of HCM II (the “Merger”), resulting in a combined company whereby HCM II will become the sole stockholder of Terrestrial Energy Opco, and substantially all of the assets and the business of the combined company will be held by Terrestrial Energy Opco and its subsidiaries.

A majority of the directors who are not employees of Terrestrial Energy did not retain an unaffiliated representative to act solely on behalf of unaffiliated security holders for purposes of negotiating the terms of the Business Combination or prepare a report concerning the approval of the Business Combination.

Business Combination Consideration to Terrestrial Stockholders

If the ExchangeCo Recapitalization (as defined below) is completed prior to or concurrently with the Closing, each Exchangeable Share (as defined in the Business Combination Agreement) that is issued and outstanding immediately prior to the Effective Time will thereafter be exchangeable for shares of New Terrestrial Common Shares rather than Terrestrial Common Shares or Terrestrial Series A Preferred Shares, as applicable, in accordance with the post-ExchangeCo Recapitalization terms and conditions of such Exchangeable Share. If the ExchangeCo Recapitalization is not completed prior to or concurrently with the Closing, then prior to the Effective Time, but conditional upon the Closing, Terrestrial Energy will cause each Exchangeable Share to be exchanged for Terrestrial Common Shares or Terrestrial Series A Preferred Shares, as applicable, and in the Merger, each such Terrestrial Common Share or Terrestrial Series A Preferred Share issued pursuant to such exchange will be cancelled and converted into the right to receive the Per Share Base Consideration.

Effect of Domestication and Merger

Subject to, and in accordance with the terms and conditions of the Business Combination Agreement, the Domestication and Merger will occur, which will result in, among other things, the following, in each case, prior to or concurrently with the Effective Time:

(a)     the existing governing documents of HCM II will be amended and restated and become the Proposed Organizational Documents of New Terrestrial Energy as described in this proxy statement/prospectus;

(b)    each issued and outstanding HCM II Class A Ordinary Share will convert automatically by operation of law, on a one-for-one basis, into shares of New Terrestrial Common Shares concurrently with the effective time of the Domestication;

(c)     each issued and outstanding warrant to purchase HCM II Class A Ordinary Shares will automatically convert into a New Terrestrial Warrant at an exercise price of eleven dollars and fifty cents ($11.50) per share of New Terrestrial Common Shares on the terms and conditions set forth in the Warrant Agreement;

(d)    in connection with clause (b) and (c) above, each issued and outstanding unit of HCM II that has not been previously separated into the underlying class A ordinary shares of HCM II and underlying warrants of HCM II prior to the Domestication will be cancelled and will entitle the holder thereof to one share of New Terrestrial Common Shares and one-half of one New Terrestrial Warrant, with a whole New Terrestrial Warrant representing the right to purchase one share of New Terrestrial Common Shares at an exercise price of eleven dollars and fifty cents ($11.50) per share on the terms and subject to the conditions set forth in the Warrant Agreement;

(e)     each Terrestrial Common Shares that is issued and outstanding immediately prior to the Effective Time (other than Excluded Shares and any Dissenting Shares (as defined below)) will be cancelled and converted into the right to receive the Per Share Base Consideration;

(f)     each Terrestrial Series A Preferred Shares that is issued and outstanding immediately prior to the Effective Time (other than Excluded Shares and any Dissenting Shares) will be cancelled and converted into the right to receive a number of shares of New Terrestrial Common Shares equal to: (A) the number of shares of Terrestrial Common Shares into which such Terrestrial Series A Preferred Shares would be converted in accordance with Terrestrial Energy’s governing documents as of immediately prior to the Effective Time; multiplied by (B) the Per Share Base Consideration;

(g)    each Terrestrial Series A-1 Preferred Share that is issued and outstanding immediately prior to the Effective Time will be automatically converted into the applicable number of Terrestrial Common Shares provided by Terrestrial Energy’s governing documents as of immediately prior to the Effective Time, and immediately following such conversion, each such Terrestrial Common Share (other than any Dissenting Shares) will be cancelled and converted into the right to receive the Per Share Base Consideration;

(h)    each Excluded Share, will be automatically cancelled and retired without any conversion thereof and will cease to exist, and no consideration will be delivered in exchange therefore;

(i)     if the ExchangeCo Recapitalization has been completed prior to or concurrently with the Closing, each share of Terrestrial Special Voting Shares will be cancelled and converted into the right to receive one share of New Terrestrial Special Voting Stock;

(j)     each Terrestrial Option that is outstanding immediately prior to the Effective Time will be automatically assumed by New Terrestrial Energy such that, as of the Effective Time, each share underlying each Terrestrial Option will instead be shares of New Terrestrial Common Shares and the number of such shares will be equal to the Exchange Ratio; provided, that the assumption and adjustment of the unvested Terrestrial Options shall be completed in a manner that satisfies the requirements of Code Section 409A and, with respect to any Terrestrial Option intended to be an “incentive stock option,” Code Section 422 and the applicable regulations promulgated thereunder;

(k)    each Terrestrial Warrant that is outstanding and unexercised immediately prior to the Effective Time will automatically become exercisable, in accordance with the terms and conditions of such Terrestrial Warrant, for the Per Share Base Consideration. New Terrestrial Energy will assume the obligation to issue the New Terrestrial Common Shares upon the exercise of Terrestrial Warrants following the Effective Time pursuant to the terms of the Warrant Assignment and Assumption Agreement (as defined in the Business Combination Agreement); and

(l)     each Terrestrial Convertible Note that is outstanding immediately prior to the Effective Time will be cancelled and converted pursuant to its terms, and the holder thereof will be entitled to receive, without interest, assuming the delivery of the lock-up agreement contemplated by such Terrestrial Convertible Note: (i) a number of shares of New Terrestrial Common Shares equal to (A) the outstanding amount of such Terrestrial Convertible Note, including any accrued and unpaid interest, divided by (B) seventy-five percent (75%) of the price at which each share of New Terrestrial Common Shares may be redeemed pursuant to the Redemption; and (ii) a contingent value right to receive additional shares of New Terrestrial Common Shares in the event that the volume weighed average price of the New Terrestrial Common Shares for the twenty (20) trading days beginning on the trading day immediately following expiration of the lock-up period contemplated by the applicable Terrestrial Convertible Note is less than seventy-five percent (75%) of the Redemption Price;

ExchangeCo Recapitalization

Following the Signing Date, Terrestrial Energy and its subsidiaries will take, or cause to be taken, such actions as Terrestrial Energy and its subsidiaries determine (in their sole discretion) to be necessary or advisable to provide the holders of Exchangeable Shares with the ability to continue to hold, following the Closing, Exchangeable Shares (the “ExchangeCo Recapitalization”), including by causing Terrestrial Energy Canada (Exchange) Inc. (“ExchangeCo”) to call a special meeting of its shareholders to vote on a proposal to effectuate the ExchangeCo Recapitalization.

Terrestrial Stockholder Appraisal/Dissenter’s Rights

Under the DGCL, Terrestrial Common Shares, Terrestrial Series A Preferred Shares and Terrestrial Series A-1 Preferred Shares that are issued and outstanding immediately prior to the Effective Time and that are held by Terrestrial Energy stockholders (including beneficial owners) that neither voted in favor of the Business Combination nor consented thereto in writing and that have demanded properly in writing appraisal or dissenters’ rights for such shares of Terrestrial Energy capital stock in accordance with the DGCL (collectively, the “Dissenting Shares”; and the holders of Dissenting Shares being referred to as “Dissenting Stockholders”), and otherwise complied with all of the provisions of the DGCL relevant to the exercise and perfection of appraisal rights, will not be converted into, and such Dissenting Stockholders will have no right to receive, the Per Share Base Consideration as provided in the Business Combination Agreement unless and until such Dissenting Stockholder fails to perfect or withdraws or otherwise loses their right to appraisal and payment under the DGCL. Notwithstanding the foregoing, if any such holder fails to perfect or otherwise waives, withdraws or loses the right to dissent under the DGCL, then such holder’s Dissenting Shares will be deemed to have been converted into, and to have become exchangeable for, as of the Effective Time, the right to receive the Per Share Base Consideration, without any interest thereon, upon surrender, if applicable, as provided in the Business Combination Agreement.

Representations and Warranties

The Business Combination Agreement contains representations and warranties of HCM II, Merger Sub and Terrestrial Energy, certain of which are qualified by materiality and material adverse effect and knowledge and, as applicable, are further modified and limited by the Disclosure Letters of HCM II and Terrestrial Energy. The representations and warranties of HCM II and Merger Sub are also qualified by information included in HCM II’s public filings filed or submitted to the SEC on or prior to the Signing Date (subject to certain exceptions contemplated by the Business Combination Agreement).

Representations and Warranties of Terrestrial Energy

The Business Combination Agreement contains representations and warranties of Terrestrial Energy relating to, among other things, organization and standing, authorization and binding agreement, capitalization, subsidiaries, no conflict and governmental consents and filings, financial statements, undisclosed liabilities, absence of certain changes, compliance with laws, government contracts, permits, litigation, material contracts, intellectual property, U.S. nuclear regulatory matters, taxes and tax returns, real property, personal property, employee matters, benefit plans, environmental matters, transactions with related persons, insurance, top customers and suppliers, certain business practices, the Investment Company Act, finders and brokers, independent investigation and information supplied and that there are no additional representations or warranties.

Representations and Warranties of HCM II and Merger Sub

The Business Combination Agreement contains representations and warranties of HCM II and Merger Sub relating to, among other things, organization and standing, authorization and binding agreement, government approvals, non-contravention, capitalization, SEC filings and financial statements, absence of certain changes, undisclosed liabilities, compliance with laws, legal proceedings, orders, permits, taxes and tax returns, properties, the Investment Company Act, contracts, the Trust Account, finders and brokers, certain business practices, insurance, information supplied, independent investigation and that there are no additional representations and warranties.

Terrestrial Material Adverse Effect

Under the Business Combination Agreement, certain of the representations and warranties of Terrestrial Energy are qualified in whole or in part by a material adverse effect standard for purposes of determining whether a breach of such representations and warranties has occurred.

Pursuant to the Business Combination Agreement, a “Company Material Adverse Effect” means any change, event or circumstance (collectively, “Events”), that (i) has had, individually or in the aggregate, a material adverse effect on the business, assets, results of operations or financial condition of Terrestrial Energy and its subsidiaries, taken as a whole or (ii) does or would reasonably be expected to, individually or in the aggregate, prevent the ability of Terrestrial Energy and its subsidiaries to consummate the Business Combination; provided, however, that in no event would any of the following, alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a Company Material Adverse Effect:

(a)     any change in applicable laws or GAAP or any interpretation thereof following the Signing Date;

(b)    any change in interest rates or economic, political, business, banking, financial or securities markets conditions generally, including any disruption thereof and any decline in the price of any security or any market index;

(c)     the taking of any action required by the Business Combination Agreement or any ancillary document;

(d)    any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), pandemic (including any COVID-19 measures) or change in climate;

(e)     any acts of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political conditions;

(f)     any failure of Terrestrial Energy or its subsidiaries to meet any projections or forecasts (provided that this clause (f) will not prevent a determination that any Event not otherwise excluded from this definition of Company Material Adverse Effect underlying such failure to meet projections or forecasts has resulted in a Company Material Adverse Effect);

(g)    any Events generally applicable to the industries or markets in which Terrestrial Energy and its subsidiaries operate (including increases in the cost of products, supplies, materials or other goods purchased from third party suppliers);

(h)    the announcement of the Business Combination Agreement and consummation of the transactions contemplated thereby, including any termination of, reduction in or similar adverse impact (but in each case only to the extent attributable to such announcement or consummation) on relationships, contractual or otherwise, with any landlords, customers, suppliers, distributors, partners or employees of Terrestrial Energy or any of its subsidiaries;

(i)     any matter set forth on the Disclosure Letter of Terrestrial Energy;

(j)     any action taken by, or at the request of, HCM II; or

(k)    any event referred to in clauses (a), (b), (d), (e) or (g) above may be taken into account in determining if a Company Material Adverse Effect has occurred to the extent it has a disproportionate and adverse effect on the business, assets, results of operations or condition (financial or otherwise) of Terrestrial Energy and its subsidiaries, taken as a whole, relative to similarly situated companies in the industry in which Terrestrial Energy and its subsidiaries conduct their respective operations, but only to the extent of the incremental disproportionate effect on Terrestrial Energy and its subsidiaries, taken as a whole, relative to similarly situated companies in the industry in which Terrestrial Energy and its subsidiaries conduct their respective operations.

HCM II Material Adverse Effect

Under the Business Combination Agreement, certain representations and warranties of HCM II and Merger Sub are qualified in whole or in part by a material adverse effect standard on the ability of HCM II and Merger Sub to consummate the Business Combination for purposes of determining whether a breach of such representations and warranties has occurred. Pursuant to the Business Combination Agreement, a “Purchaser Material Adverse Effect” means any Event, that, individually or when aggregated with other changes, events or occurrences has had a materially adverse effect on the business, assets, financial condition or results of operations of HCM II; provided, however, that no change or effect related to any of the following, alone or in combination, will be taken into account in determining whether a Purchaser Material Adverse Effect has occurred: (a) the announcement of the Business Combination Agreement and consummation of the transactions contemplated thereby, including any termination of, reduction in or similar adverse impact (but in each case only to the extent attributable to such announcement or consummation) on relationships, contractual or otherwise, with any landlords, customers, suppliers, distributors, partners or employees of HCM II or Merger Sub; (b) the taking of any action required by the Business Combination Agreement or any ancillary document to the Business Combination Agreement; (c) any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), pandemic or change in climate, (d) any acts of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political conditions; (e) the Redemption; (f) any breach of any covenants, agreements or obligations of any investor in any PIPE Financing under any agreement related to financing Terrestrial Energy or HCM II (including any breach of such person’s obligations to fund any amounts thereunder when required); (g) changes or proposed changes in applicable law, regulations or interpretations thereof or decisions by courts or any governmental authority after the date of the Business Combination Agreement; (h) changes or proposed changes in GAAP (or any interpretation thereof) after the Signing Date; or (i) any downturn in general economic conditions, including changes in the credit, debt, securities, financial, capital or reinsurance markets (including changes in interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets), in each case, in the United States or anywhere else in the world.

Survival of Representations and Warranties

Except in the case of a fraud claim against a person, none of the representations, warranties, covenants, obligations or other agreements in the Business Combination Agreement or in any certificate, statement or instrument delivered pursuant to the Business Combination Agreement, including any rights arising out of any breach of such representations, warranties, covenants, obligations, agreements and other provisions, will survive the Closing (and there will be no liability after the Closing in respect thereof), except for those covenants and agreements contained therein that by their terms expressly apply in whole or in part at or after the Closing, and then only in respect to any breaches occurring at or after the Closing.

Covenants and Agreements

Terrestrial Energy has made covenants relating to, among other things, efforts, conduct of business, annual and interim financial statements, no trading, and notification of certain matters.

HCM II has made covenants relating to, among other things, conduct of business, HCM II public filings, the Trust Account, HCM II shareholder approval to complete the transactions contemplated by the Business Combination Agreement, employee matters and the Domestication.

Conduct of Business of Terrestrial Energy

Terrestrial Energy has agreed that during the Interim Period, it will, and will cause its subsidiaries to, subject to certain specified exceptions, including as set forth on the Disclosure Letter delivered by Terrestrial Energy pursuant to the Business Combination Agreement, as consented to by HCM II in writing (which consent will not be unreasonably withheld, conditioned or delayed) or as required by applicable law (including COVID-19, or any COVID-19 measures) or any governmental authority, use commercially reasonable efforts to, and will use commercially reasonable efforts to cause its subsidiaries to:

•        conduct its and their respective businesses, in all material respects, in the ordinary course of business;

•        maintain the existing relations and goodwill of Terrestrial Energy and its subsidiaries with their respective customers, suppliers, distributors and creditors, as well as with the United States Nuclear Regulatory Commission (the “USNRC”); and

•        take commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, their respective business organizations.

During the Interim Period, Terrestrial Energy also agreed not to, and to cause its subsidiaries not to, subject to certain specified exceptions, including as set forth on the Disclosure Letter delivered by Terrestrial Energy as consented to by HCM II in writing (which consent will not be unreasonably withheld, conditioned or delayed) or as required by applicable law (including COVID-19, or any COVID-19 measures) or any governmental authority:

•        amend, waive or otherwise change, in any material respect, its organizational documents;

•        other than (a) the cancellation of Company Special Voting Preferred Shares (as defined in the Business Combination Agreement) and issuance of Terrestrial Common Shares and/or Terrestrial Series A Preferred Shares prior to the Closing Date in connection with the exchange of Exchangeable Shares outstanding as of the Signing Date, (b) in connection with the Interim Financing (as defined in the Business Combination Agreement), or (c) subject to certain limitations in the Business Combination Agreement, the grant of up to 20,000 Terrestrial Options to any current or prospective employee or service provider (the “Interim Period Option Issuance”), authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its units or other equity securities or securities of any class and any other equity-based awards, or engage in any hedging transaction with a third person with respect to such securities, except in compliance with existing Terrestrial Energy benefits plans or any contract (including any warrant, option, or profits interest award) outstanding as of the Signing Date or amended in compliance with this covenant;

•        split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities, except as may be required (a) pursuant to Terrestrial Certificate of Incorporation or the organizational documents of any subsidiary, (b) pursuant to the terms of any warrant, option or profits interest award outstanding as of the Signing Date, (c) in connection with the Interim Period Option Issuance or (d) pursuant to the terms of any securities of Terrestrial Energy issued in connection with the Interim Financing;

•        except in connection with the Interim Financing, incur, create, assume or otherwise become liable for any additional indebtedness (directly, contingently or otherwise) for borrowed money in excess of $1,000,000;

•        except as otherwise required by Terrestrial Energy’s benefit plans or award agreements thereunder, (a) grant any severance, retention, change in control or termination or similar pay, other than offer letters or employment contracts to employees in the ordinary course of business, (b) terminate, adopt, enter into or materially amend or grant any new awards under any Terrestrial Energy benefit plan other than the Terrestrial Energy Option Plan in connection with the Interim Period Option Issuance or any plan, policy, practice, program, agreement or other arrangement other than the Terrestrial Option Plan that would be deemed a Terrestrial Energy benefit plan as of the Signing Date, (c) increase the cash compensation or bonus opportunity of any employee, officer, director or other individual service provider, except for such increases to any such individuals made in the ordinary course of business consistent with past practice, (d) take any action to materially amend or waive any performance or vesting criteria or to accelerate the time of payment or vesting of any compensation or benefit payable by Terrestrial Energy or any of its subsidiaries other than as provided under the Business Combination Agreement, (e) hire or engage any new employee or individual independent contractor if such new employee or individual independent contractor will receive annual base cash compensation in excess of $350,000, other than in the ordinary course of business consistent with past practice, (f) terminate the employment or engagement, other than for cause, death or disability, of any employee or individual independent contractor with an annual base cash compensation in excess of $350,000 or (g) enter into any written waiver of any restrictive covenants applying to any current or former employee or individual independent contractor;

•        enter into or amend or extend any collective bargaining agreement or similar labor agreement, or recognize or certify any labor union, labor organization or group of employees of Terrestrial Energy or any of its subsidiaries as the bargaining representative for any employees of Terrestrial Energy or any of its subsidiaries;

•        (a) make, change or rescind any material election relating to taxes, (b) settle any claim, suit, litigation, proceeding, arbitration, investigation, audit, controversy or other legal proceeding relating to material taxes, (c) file any amended income tax or other material tax return, (d) surrender or allow to expire any right to claim a refund of material taxes, (e) change (or request to change) any method of accounting for tax purposes, (f) waive or extend any statute of limitations in respect of a period within which an assessment or reassessment of income taxes or other material taxes may be issued or in respect of any income taxes or other material tax attribute that would give rise to any claim or assessment of taxes of or with respect to Terrestrial Energy or any of its subsidiaries, (g) enter into any “closing agreement” as described in Section 7121 of the Code or any other agreement or arrangement with any governmental authority or (h) enter into any tax indemnity agreement, tax sharing agreement or tax allocation agreement or similar agreement, arrangement or practice (excluding customary commercial contracts entered into in the ordinary course of business the primary purpose of which is not the sharing of taxes) with respect to taxes;

•        knowingly take any action, or knowingly fail to take any action, where such action or failure to act would reasonably be expected to prevent the transactions from qualifying for its intended tax treatments;

•        transfer, sell, assign, license, sublicense, covenant not to assert, subject to a lien (other than a permitted lien), abandon, allow to lapse, transfer or otherwise dispose of, any right, title or interest of Terrestrial Energy or any of its subsidiaries in or to any intellectual property owned by Terrestrial Energy or any of its subsidiaries that is material to any of their businesses (other than non-exclusive licenses of intellectual property owned by Terrestrial Energy granted in the ordinary course of business or abandoning, allowing to lapse or otherwise disposing of Terrestrial Energy’s owned intellectual property registrations or applications that Terrestrial Energy or any of its subsidiaries, in the exercise of their good faith business judgment, have determined to abandon, allow to lapse or otherwise dispose of), or otherwise materially amend or modify, permit to lapse or fail to preserve any material Terrestrial Energy registered intellectual property (excluding non-exclusive licenses of Terrestrial Energy intellectual property to customers in the ordinary course of business consistent with past practice), or disclose, divulge, furnish to or make accessible to any person who has not entered into a confidentiality agreement sufficiently protecting the confidentiality thereof any material trade secrets constituting intellectual property owned by Terrestrial Energy or any of its subsidiaries;

•        terminate or assign any Terrestrial Energy material contract or enter into any contract that would be a Terrestrial Energy material contract, in any case outside of the ordinary course of business consistent with past practice;

•        enter into any new line of business or establish any subsidiary in connection therewith;

•        fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, operations and activities in such amount and scope of coverage substantially similar to that which is currently in effect, or terminate without replacement or amend in a manner materially detrimental to Terrestrial Energy and its subsidiaries, taken as a whole, any material insurance policy insuring Terrestrial Energy or any of its subsidiaries;

•        make any material change in accounting methods, principles or practices, except to the extent required to comply with GAAP or changes that are made in accordance with PCAOB standards;

•        waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to the Business Combination Agreement or the transactions contemplated thereby), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, Terrestrial Energy or any of its subsidiaries) not in excess of $500,000 (individually or in the aggregate);

•        effect any mass layoff or plant closing at any of its facilities that triggers the notice obligations under the Worker Adjustment and Retraining Notification Act of 1988, except as would not be material to Terrestrial Energy and its subsidiaries or any terminations for cause;

•        acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof or any material amount of assets, in each case, outside the ordinary course of business consistent with past practice, except pursuant to any contract in existence as of the Signing Date which has been disclosed in writing to HCM II or provided in the virtual data room;

•        except as required pursuant to any contract in effect on the Signing Date, make capital expenditures outside of the ordinary course of business consistent with past practice in excess of $250,000 (individually for any project) or $1,000,000 (in the aggregate);

•        adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;

•        sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its tangible properties, assets or rights;

•        enter into any written agreement, understanding or arrangement with respect to the voting of equity securities of Terrestrial Energy;

•        enter into, amend, waive or terminate (other than terminations in accordance with their terms) any transaction with any related person (other than compensation and benefits and advancement of expenses, in each case, provided in the ordinary course of business consistent with past practice, and other than in connection with the Interim Period Option Issuance);

•        (a) limit the right of Terrestrial Energy or any of its subsidiaries to engage in any line of business or in any geographic area, to develop, market or sell products or services, or to compete with any person or (b) grant any exclusive or similar rights to any person, in each case of clause (a) and (b), except where such limitation or grant does not, and would not be reasonably likely to, individually or in the aggregate, materially and adversely affect, or materially disrupt, the ordinary course operation of the business of Terrestrial Energy and its subsidiaries;

•        voluntarily terminate any design certification, pre-application, application or standard design approval activities Terrestrial Energy and its subsidiaries may currently be undertaking with the USNRC; or

•        authorize or agree to do any of the foregoing actions.

Notwithstanding the foregoing, nothing contained in the Business Combination Agreement gives HCM II, directly or indirectly, rights to control or direct the business or operations of Terrestrial Energy prior to the Closing. Prior to the Closing, Terrestrial Energy will exercise, consistent with the terms and conditions of the Business Combination Agreement and subject to HCM II’s rights set forth therein, complete control and supervision over its business, assets and operations.

Conduct of Business of HCM II

HCM II has agreed that during the Interim Period, subject to certain specified exceptions, including as set forth on the Disclosure Letter delivered by HCM II pursuant to the Business Combination Agreement, as consented to by Terrestrial Energy in writing (which consent will not be unreasonably withheld, conditioned or delayed) or as is required by applicable law or any governmental authority, it will:

•        conduct its business, in all material respects, in the ordinary course of business; and

•        take commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, its business.

During the Interim Period, HCM II also agreed not to, and to cause its subsidiaries not to, subject to certain specified exceptions, including as set forth on the Disclosure Letter delivered by HCM II, as consented to by Terrestrial Energy in writing (which consent will not be unreasonably withheld, conditioned or delayed) or as required by applicable law or any governmental authority:

•        amend, waive or otherwise change, in any material respect, its organizational documents;

•        authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its units or other equity securities or other securities of any class and any other equity-based awards, or engage in any hedging transaction with a third person with respect to such securities;

•        split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its shares or other equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;

•        incur, create, assume, prepay or otherwise become liable for any indebtedness (directly, contingently or otherwise), other than indebtedness under the Convertible Promissory Note solely for the purpose of paying Purchaser Transaction Costs (as defined in the Business Combination Agreement);

•        (a) make, change or rescind any material election relating to taxes, (b) settle any claim, suit, litigation, proceeding, arbitration, investigation, audit, controversy or other legal proceeding relating to material taxes, (c) file any amended income tax or other material tax return, (d) surrender or allow to expire any right to claim a refund of material taxes, (e) change (or request to change) any method of accounting for tax purposes, (f) waive or extend any statute of limitations in respect of a period within which an assessment or reassessment of material taxes may be issued or in respect of any material tax attribute that would give rise to any claim or assessment of taxes of or with respect to HCM II, (g) enter into any “closing agreement” as described in Section 7121 of the Code or any other agreement or arrangement with any governmental authority, in each case except as required by applicable law, or (h) enter into any tax indemnity agreement, tax sharing agreement or tax allocation agreement or similar agreement, arrangement or practice (excluding customary commercial contracts entered into in the ordinary course of business the primary purpose of which is not the sharing of taxes) with respect to taxes;

•        knowingly take any action, or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the relevant portions of the Merger from qualifying for their respective intended tax treatments;

•        amend, waive or otherwise change the Trust Agreement;

•        terminate, waive or assign any material right under any material contract of HCM II or any contract with any broker, finder, financial advisor or investment banker, or make any discretionary payments under any such contract;

•        enter into, amend, waive or terminate (other than terminations in accordance with their terms) any transaction with any officer, director, employee, trustee or beneficiary of Terrestrial Energy or its subsidiaries or any immediate family member of the foregoing (other than with respect to the Convertible Promissory Note);

•        establish any subsidiary;

•        engage in any activities or business, other than activities or business (a) currently conducted by HCM II or Merger Sub as of the Signing Date, (b) in connection with or incident to Purchaser’s or Merger Sub’s organization, incorporation, or continuing corporate existence or (c) that are administrative and immaterial in nature;

•        fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, operations and activities in such amount and scope of coverage substantially similar to that which is currently in effect;

•        make any material change in accounting methods, principles or practices, except to the extent required to comply with GAAP or PCAOB standards;

•        waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to the Business Combination Agreement or the transactions contemplated thereby), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, HCM II or its subsidiaries) not in excess of five hundred thousand dollars ($500,000) (individually or in the aggregate);

•        acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets;

•        make capital expenditures (excluding for the avoidance of doubt, incurring any ordinary course administrative costs and expenses);

•        adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than with respect to the transactions contemplated by the Business Combination Agreement);

•        voluntarily incur any liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of five hundred thousand dollars ($500,000) individually or one million dollars ($1,000,000) in the aggregate (excluding the incurrence of any ordinary course administrative costs and expenses incurred in connection with the consummation of the transactions contemplated by the Business Combination Agreement, including legal or accounting (including any PIPE Financing)) other than pursuant to the terms of a contract in existence as of the Signing Date or entered into in the ordinary course of business or in accordance with the terms of the Business Combination Agreement during the Interim Period;

•        sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its tangible properties, assets or rights;

•        grant or establish any form of compensation or benefits to any current or former employee, officer, director, individual independent contractor or other individual service provider of HCM II; or

•        authorize or agree to do any of the foregoing actions.

Notwithstanding the foregoing, nothing contained in the Business Combination Agreement gives Terrestrial Energy, directly or indirectly, rights to control or direct the business or operations of the HCM II prior to the Closing. Prior to the Closing, HCM II will exercise, consistent with the terms and conditions of the Business Combination Agreement and subject to Terrestrial Energy’s rights set forth therein, complete control and supervision over its business, assets and operations.

Covenants of Terrestrial Energy

Pursuant to the Business Combination Agreement, Terrestrial Energy has agreed, among other things, to:

•        as soon as reasonably practicable following the Signing Date, but in no event later than June 30, 2025, deliver to HCM II audited consolidated balance sheets and statements of operations, comprehensive loss, stockholders’ equity and cash flows of Terrestrial Energy and its subsidiaries as of and for the year ended December 31, 2023 and December 31, 2024, together with the auditor’s reports thereon, which comply in all material respects with the applicable accounting requirements and with the rules and regulations of the SEC, the Exchange Act and the Securities Act applicable to a registrant (collectively, the “PCAOB Financial Statements”);

•        as soon as reasonably practicable following the Signing Date, and in each case, within seventy-five (75) days of each applicable quarter-end (other than with respect to the quarters ended March 31, 2025 and March 31, 2024), deliver to the HCM II unaudited consolidated balance sheets and statements of operations, comprehensive loss, stockholders’ equity and cash flows of Terrestrial Energy and its subsidiaries that are required by applicable law to be included in the proxy statement/prospectus, which comply in all material respects with the applicable accounting requirements (the “Interim Financial Statements”);

•        prior to the Closing, Terrestrial Energy will, and will cause its subsidiaries to, as applicable, (a) give notice of and convene and hold a special meeting of the ExchangeCo Shareholders (as defined in the Business Combination Agreement) (the “ExchangeCo Shareholder Meeting”) in accordance with ExchangeCo’s governing documents and the Business Corporations Act (Ontario), and (b) solicit proxies from ExchangeCo Shareholders to vote in favor of and approve the adoption of the ExchangeCo Recapitalization (the “ExchangeCo Shareholder Approval”). Terrestrial Energy may cause the ExchangeCo Shareholder Meeting to be adjourned, if necessary, to permit further solicitation of approvals if there are not sufficient votes to obtain the ExchangeCo Shareholder Approval or because of the absence of a quorum. Terrestrial expects to hold the ExchangeCo Shareholder Meeting during the fourth quarter of 2025 and, in any event, as close as possible prior to the closing of the Business Combination;

•        while it is in possession of material nonpublic information, Terrestrial Energy will not purchase or sell any securities of HCM II (unless otherwise explicitly contemplated in the Business Combination Agreement), communicate such information to any third party (other than (x) to persons for the purpose of seeking consents related to the transactions contemplated by the Business Combination Agreement or (y) persons subject to confidentiality restrictions in favor of Terrestrial Energy), take any other action with respect to HCM II in violation of such laws, or cause or encourage any third party to do any of the foregoing;

•        from time to time, but no later than the second (2nd) Business Day prior to Closing, Terrestrial Energy may deliver to HCM II a true and complete schedule of changes (an “Update Schedule”) to any of the information contained in the Disclosure Letter delivered by Terrestrial Energy (including changes to any other representations or warranties contained in the Business Combination Agreement as to which no section of the Disclosure Letter delivered by Terrestrial Energy has been created as of the Signing Date but as to which a section of the Disclosure Letter delivered by Terrestrial Energy would have been required if such changes had existed on the Signing Date), which changes pertain to events or circumstances occurring, or of which Company Knowledge (as defined in the Business Combination Agreement) is first obtained subsequent to the Signing Date which would render any representation or warranty in the Business Combination Agreement inaccurate or incomplete. Any Update Schedule so delivered will be deemed to amend the Disclosure Letter delivered by Terrestrial Energy with respect to the matters contained therein. Upon delivery of an Update Schedule to HCM II that would cause the closing conditions of the Business Combination Agreement to not be satisfied, HCM II will have ten (10) Business Days to exercise its rights under the Business Combination Agreement. If HCM II does not exercise its rights to terminate the Business Combination Agreement within ten (10) Business Days, HCM II will be deemed to have waived all such rights to terminate the Business Combination Agreement in connection with the matters described in such Update Schedule; and

•        during the Interim Period, Terrestrial Energy will keep HCM II reasonably apprised of the status of matters relating to the USNRC’s review of Terrestrial Energy’s activities, if applicable, by furnishing HCM II with material filed copies of notes, inspections, audit requests and other material communications received by Terrestrial Energy from the USNRC upon reasonable request by HCM II. Upon reasonable request by HCM II, Terrestrial Energy will provide summaries of material meetings (including via teleconference or videoconference) between Terrestrial Energy and the USNRC.

Covenants of HCM II

Pursuant to the Business Combination Agreement, HCM II has agreed, among other things, to:

•        During the Interim Period, keep current all of its public filings with the SEC (after giving effect to all applicable extension periods) and otherwise comply in all material respects with applicable securities laws and will use its reasonable best efforts prior to the Closing to maintain the listing of the HCM II Class A Ordinary Shares and the warrants of HCM II on Nasdaq; provided, that (a) if HCM II fails to timely file any public filing with the SEC, such failure will not be a breach of the covenants under the Business Combination Agreement provided such public filing is made before the effectiveness of the registration statement of which this proxy statement/prospectus forms a part or the earlier termination of the Business Combination Agreement (even though such filing is late) and such late filing does not have a material adverse impact on the consummation of the Business Combination and (b) from and after the Closing, the parties intend to list on Nasdaq only the New Terrestrial Common Shares and the New Terrestrial Warrants;

•        Upon satisfaction or waiver of the conditions to Closing set forth in the Business Combination Agreement and provision of notice thereof to Continental (which notice HCM II will provide to Continental in accordance with the terms of the Trust Agreement), (a) in accordance with and pursuant to the Trust Agreement, at the Closing, HCM II (A) will cause any documents, opinions and notices required to be delivered to Continental pursuant to the Trust Agreement to be delivered and (i) will use its reasonable best efforts to cause Continental to, and Continental will be obligated to (A) pay as and when due all amounts payable to the Public Shareholders pursuant to the redemption, (B) pay the amounts due to the underwriters of HCM II’s initial public offering for their deferred underwriting commissions as set forth in the Trust Agreement, (C) pay the amounts due to the Sponsor, directors and officers of HCM II as repayment of unpaid HCM II liabilities, (D) pay the Purchaser Transaction Costs and the Company Transaction Costs (as defined in the Business Combination Agreement), (E) pay all income tax or other tax obligations of HCM II prior to the Closing, and (F) pay all remaining amounts then available in the Trust Account to HCM II for immediate use, subject to the Business Combination Agreement and the Trust Agreement, and (b) thereafter, the Trust Account will terminate, except as expressly provided in the Trust Agreement;

•        Prior to the Closing Date, HCM II will approve and adopt the New Equity Incentive Plan, in a form to be mutually agreed upon between HCM II and Terrestrial Energy, that, once adopted, will provide for grants of equity and equity-based awards to eligible service providers. The New Equity Incentive Plan will have an initial share reserve for new awards to be issued thereunder equal to ten percent (10%) of the New Terrestrial Energy’s fully diluted outstanding shares immediately following the Effective Time, as mutually agreed between HCM II and Terrestrial Energy based upon benchmarking against peer companies and in consultation with an independent outside compensation advisor;

•        Subject to receipt of the required shareholder approval of the Condition Precedent Proposals, at least one (1) Business Day prior to the Closing, that HCM II will, in accordance with applicable law, any applicable rules and regulations of the SEC and Nasdaq, and HCM II’s organizational documents, as applicable, cause the Domestication to become effective, including by (a) filing with the Delaware Secretary of State a Certificate of Corporate Domestication with respect to the Domestication, in form and substance reasonably acceptable to HCM II and Terrestrial Energy, together with HCM II’s charter upon Domestication, in each case, in accordance with the provisions thereof and applicable law, and (b) completing, making and procuring all those filings required to be made with respect to Cayman Islands law in connection with the Domestication. HCM II expects to complete the Domestication during the fourth quarter of 2025 and, in any event, as close as possible prior to the closing of the Business Combination;

•        Use its reasonable best efforts to satisfy or cause to be satisfied the conditions of the closing obligations contained in any PIPE Subscription Agreements (as defined in the Business Combination Agreement) and consummate the transactions contemplated thereby, including using its reasonable best efforts to enforce its rights, as applicable, under such PIPE Subscription Agreements to cause the other parties to such PIPE Subscription Agreement, as applicable, to pay to (or as directed by) HCM II the applicable purchase price under such PIPE Subscription Agreement in accordance with its terms. Unless otherwise approved in writing by each of HCM II and Terrestrial Energy, neither HCM II nor Terrestrial Energy will, following execution of any PIPE Subscription Agreement, amend, modify, supplement, waive or terminate, or agree

or provide consent to amend, modify, supplement, waive or terminate (the approval from HCM II or Terrestrial Energy, not to be unreasonably withheld, conditioned or delayed), any provision or remedy under, or any replacement of, such PIPE Subscription Agreement, other than, in each case, any assignment or transfer contemplated in such PIPE Subscription Agreement or expressly permitted by such PIPE Subscription Agreement (without any further amendment, modification or waiver to such assignment or transfer provision). Each of HCM II and Terrestrial Energy, as applicable, will give the other party prompt written notice: (a) of the receipt of any request from any other party to any PIPE Subscription Agreement for an amendment to, modification of, supplement to, waiver under or termination of such PIPE Subscription Agreement; (b) of any breach or default to the Knowledge of such party that (or any event or circumstance that, to the Knowledge of such party, with or without notice, lapse of time or both) would give rise to any breach or default, by any party to any PIPE Subscription Agreement; (c) of the receipt by such party of any written notice or other written communication with respect to any actual or potential threatened or claimed expiration, lapse, withdrawal, breach, default, termination or repudiation of any PIPE Subscription Agreement by another party to such PIPE Subscription Agreement; and (d) if such party does not expect to receive all or any portion of the applicable purchase price under any PIPE Subscription Agreement in accordance with its terms;

•        HCM II will, and will cause its representatives to, reasonably cooperate with Terrestrial Energy and its subsidiaries in a timely manner to implement the ExchangeCo Recapitalization in a manner deemed necessary and appropriate by Terrestrial Energy; and

•        within one hundred and twenty (120) days following the Closing, HCM II will implement certain compliance programs including risk-based policies and procedures.

Joint Covenants of Terrestrial Energy and HCM II.

In addition, each of Terrestrial Energy and HCM II has agreed, among other things:

•        During the Interim Period, each of HCM II and Terrestrial Energy will not, and will cause its representatives to not, without the prior written consent of Terrestrial Energy and HCM II, directly or indirectly, (a) solicit, assist, initiate, engage or facilitate the making, submission or announcement of, or intentionally encourage, any acquisition proposal, (b) furnish any non-public information regarding such party or its affiliates or their respective businesses, operations, assets, liabilities, financial condition, prospects or employees to any person or group (other than a party to the Business Combination Agreement or their respective representatives) in connection with or in response to an acquisition proposal, (c) engage or participate in discussions or negotiations with any person or group with respect to, or that could reasonably be expected to lead to, an acquisition proposal, (d) approve, endorse or recommend, or publicly propose to approve, endorse or recommend, any acquisition proposal, or (e) negotiate or enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any acquisition proposal;

•        During the Interim Period, HCM II and Terrestrial Energy will give prompt notice to the other if such party or its affiliates: (a) receives any notice or other communication in writing from any third party (including any governmental authority) alleging that: (i) that the consent of such third party is or may be required in connection with the transactions contemplated by the Business Combination Agreement or (ii) any non-compliance with any law by either Terrestrial Energy or HCM II or its affiliates; (b) receives any notice or other communication from any governmental authority in connection with the transactions contemplated by the Business Combination Agreement; or (c) becomes aware of the commencement or threat, in writing, of any legal proceeding against either Terrestrial Energy or HCM II or any of its affiliates, or any of their respective properties or assets, or, to the Knowledge (as defined in the Business Combination Agreement) of such party, any officer, director, partner, member or manager, in his, her or its capacity as such, of such party or of its affiliates, in each case, with respect to the consummation of the transactions contemplated by the Business Combination Agreement;

•        Notify the other as promptly as practicable (and in any event within two (2) Business Days) in writing of the receipt by such party or any of its representatives of any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations regarding or constituting any acquisition proposal or any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations that could be expected to result in an acquisition proposal, specifying in each case, the material

terms and conditions thereof (including a copy thereof if in writing or a written summary thereof if oral) and the identity of the party making such inquiry, proposal, offer or request for information. Additionally, each of Terrestrial Energy and HCM II are to keep the other promptly informed of the status of any such inquiries, proposals, offers or requests for information. During the Interim Period, each of Terrestrial Energy and HCM II will, and will cause its representatives to, immediately cease and cause to be terminated any solicitations, discussions or negotiations with any person with respect to any acquisition proposal and will, and will direct its representatives to, cease and terminate any such solicitations, discussions or negotiations;

•        Subject to the terms and conditions of the Business Combination Agreement, each of Terrestrial Energy and HCM II will use its reasonable best efforts, and will cooperate fully with the other parties to the Business Combination Agreement, to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by the Business Combination Agreement (including the receipt of all applicable consents of governmental authorities) and to comply as promptly as practicable with all requirements of governmental authorities applicable to the transactions contemplated by the Business Combination Agreement, including making the filing required by and complying with the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976;

•        As promptly as practicable after the Signing Date and receipt by HCM II of the PCAOB Financial Statements, the Interim Financial Statements and any other audited or unaudited financial statements of Terrestrial Energy and its subsidiaries that are required by applicable law to be included in the proxy statement/prospectus, (x) Terrestrial Energy and HCM II will jointly prepare and HCM II will file with the SEC, mutually acceptable materials (such agreement not to be unreasonably withheld, conditioned or delayed by HCM II or Terrestrial Energy) that will include the proxy statement to be filed with the SEC and sent to HCM II’s shareholders relating to the extraordinary general meeting, and (y) HCM II will prepare (with Terrestrial Energy’s and its representatives’ reasonable cooperation) and file with the SEC the registration statement of which this proxy statement/prospectus forms a part in connection with the registration under the Securities Act of Terrestrial Common Shares issuable in connection with the Merger;

•        Each of Terrestrial Energy and HCM II will use its reasonable best efforts to cause the registration statement of which this proxy statement/prospectus forms a part to comply with the rules and regulations promulgated by the SEC, to have the registration statement of which this proxy statement/prospectus forms a part declared effective under the Securities Act as promptly as practicable after such filing and to keep the registration statement of which this proxy statement/prospectus forms a part effective as long as is necessary to consummate the transactions contemplated by the Business Combination Agreement;

•        Each of Terrestrial Energy and HCM II agree that for a period of six (6) years from the Closing Date, each of them will, and will cause HCM II, Merger Sub and Terrestrial Energy and its subsidiaries to, maintain in effect the exculpation, indemnification and advancement of expenses provisions in favor of any D&O Indemnified Party, of HCM II’s, Merger Sub’s and Terrestrial Energy’s and its subsidiaries respective organizational documents as in effect immediately prior to the Closing Date or in any indemnification agreements of HCM II, Merger Sub or any of Terrestrial Energy or any of its subsidiaries, on the one hand, with any D&O Indemnified Party, on the other hand, as in effect immediately prior to the Closing Date or in any indemnification agreements of HCM II, Merger Sub or Terrestrial Energy and its subsidiaries, on the one hand, with any D&O Indemnified Party, on the other hand, as in effect immediately prior to the Closing Date, and the parties will, and will cause HCM II, Merger Sub and Terrestrial Energy and its subsidiaries to, not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any D&O Indemnified Party; provided, however, that all rights to indemnification or advancement of expenses in respect of any legal proceedings pending or asserted or any claim made within such period will continue until the disposition of such legal proceedings or resolution of such claim. From and after the Closing Date, HCM II will cause Terrestrial Energy and its subsidiaries to honor, in accordance with their respective terms, each of the covenants described in this bullet without limit as to time;

•        Terrestrial Energy and HCM II will use commercially reasonable efforts to cause each of the individuals specified in the Disclosure Letter provided by Terrestrial Energy to enter into an employment agreement between such individual and HCM II (or a subsidiary thereof), in each case, to become effective as of the Closing, and upon terms to be agreed to by Terrestrial Energy, HCM II and such individual prior to the effectiveness of the registration statement of which this proxy statement/prospectus forms a part; and

•        Terrestrial Energy and HCM II will take all necessary action, including HCM II causing the directors of HCM II to resign, so that effective as of the Closing, the board of New Terrestrial Energy will consist of no less than five (5) individuals (appointed in accordance and such that, as of the Closing, the New Terrestrial Energy board will comply with Nasdaq rules) to be determined by Terrestrial Energy. Immediately after the Closing, the parties will take all necessary action to designate and appoint to the board of New Terrestrial Energy (a) one (1) person that is designated by HCM II prior to the Closing, which person will be subject to Terrestrial Energy’s consent (such consent not to be unreasonably withheld, delayed or conditioned), (b) the chief executive officer of HCM II after the Closing and (c) the remaining persons, all of whom will be designated by Terrestrial Energy prior to the Closing and such number of whom will be independent under applicable law and the relevant rules and regulations of Nasdaq such that a majority of the members of the Post-Closing Purchaser Board (as defined in the Business Combination Agreement) will be independent under applicable law and the relevant rules and regulations of Nasdaq. At or prior to the Closing, Terrestrial Energy, if requested, and HCM II will provide each initial director with a customary director indemnification agreement, in form and substance reasonably acceptable to such director, Terrestrial Energy and HCM II.

Closing and Effective Time of the Business Combination

Subject to the satisfaction or waiver of the closing conditions specified in the Business Combination Agreement, the consummation of the transactions contemplated by the Business Combination Agreement (other than those transactions that by their nature are to be satisfied prior to the Closing) will take place (a) electronically by the mutual electronic exchange of documents and signatures (including portable document format (.pdf)) at a time and date to be specified in writing by HCM II, Terrestrial Energy and Merger Sub, which date will be no later than the third (3rd) Business Day after all the closing conditions have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions), or (b) at such other date, time or place (including remotely) as HCM II and Terrestrial Energy may agree.

Closing Conditions

The consummation of the Business Combination Agreement is conditioned upon the satisfaction or waiver by the applicable parties to the Business Combination Agreement of the conditions set forth below. Therefore, unless these conditions are waived (to the extent they can be waived) by the applicable parties to the Business Combination Agreement, the Business Combination may not be consummated. There can be no assurance that the parties to the Business Combination Agreement would waive any such provisions of the Business Combination Agreement.

Conditions to the Obligations of Each Party

The consummation of the Business Combination is conditioned upon the satisfaction or waiver of certain customary closing conditions by each of the parties, including among other things:

•        the approval of each Condition Precedent Proposal will have been obtained;

•        no governmental authority will have enacted, issued, promulgated, enforced or entered any law (whether temporary, preliminary or permanent) or order that is then in effect and which has the effect of making the transactions or agreements contemplated by the Business Combination Agreement illegal or which otherwise prevents or prohibits consummation of the transactions contemplated by the Business Combination Agreement;

•        the registration statement of which this proxy statement/prospectus forms a part will have been declared effective under the Securities Act by the SEC and will remain effective as of the Closing, and no stop order or similar order suspending the effectiveness of the registration statement of which this proxy statement/prospectus forms a part will have been issued and be in effect with respect to the registration statement of which this proxy statement/prospectus forms a part and no proceedings for that purpose will have been initiated or threatened by the SEC and not withdrawn;

•        the shares of New Terrestrial Common Shares to be issued in connection with the Business Combination will be conditionally approved for listing upon the Closing on Nasdaq subject to any requirement to have a sufficient number of round lot holders of the New Terrestrial Common Shares (provided that

such condition will not apply to the extent the shares of New Terrestrial Common Shares have not been conditionally approved for listing due to a failure to meet any “market value of publicly held securities” or similarly titled requirement as a result of Terrestrial Energy not permitting a sufficient number of shares of New Terrestrial Common Shares to be issued to non-affiliates pursuant to the Business Combination Agreement to be excluded from lock-up or other contractual restriction); and

•        the waiting period (and any extensions thereof) under the HSR Act (as defined in the Business Combination Agreement) and any other Antitrust Laws (as defined in the Business Combination Agreement) has expired or has been terminated and any approval required under any other Antitrust Laws has been obtained.

Conditions to the Obligations of Terrestrial Energy

The obligations of Terrestrial Energy to consummate and effect the Business Combination are subject to the satisfaction or waiver of each of the following additional conditions at or prior to the Closing, any one (1) or more of which may be waived in writing exclusively by Terrestrial Energy:

•        All of the representations and warranties of HCM II and Merger Sub set forth in the Business Combination Agreement and in any certificate delivered by or on behalf of HCM II pursuant thereto will be true and correct on and as of the date of the Signing Date and on and as of the Closing Date as if made on the Closing Date, except for (a) those representations and warranties that address matters only as of a particular date (which representations and warranties will have been accurate as of such date), and (b) any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Purchaser Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Purchaser Material Adverse Effect;

•        HCM II and Merger Sub will have performed in all material respects all of their respective obligations and complied in all material respects with all of their respective agreements and covenants under the Business Combination Agreement to be performed or complied with by them on or prior to the Closing Date;

•        no Purchaser Material Adverse Effect will have occurred since the Signing Date that is continuing;

•        the Domestication will have been completed as provided in the Business Combination Agreement and a time-stamped copy of the certificate issued by the Secretary of State of the State of Delaware in relation thereto will have been delivered to Terrestrial Energy;

•        HCM II will have made appropriate arrangements to have the net proceeds remaining in the Trust Account (after giving effect to all Redemptions) available to HCM II at the Closing;

•        after giving effect to the transactions contemplated by the Business Combination Agreement (including any PIPE Financing), HCM II will have at least five million and one dollars ($5,000,001) of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately after the Effective Time;

•        as of the Closing, the Available Closing SPAC Cash (as defined in the Business Combination Agreement) will not be less than one hundred and fifty million dollars ($150,000,000);

•        all actions have been taken such that the New Terrestrial Energy board will be constituted of the directors contemplated by the Business Combination Agreement;

•        the existing governing documents of HCM II will be amended and restated and become the Proposed Organizational Documents of New Terrestrial Energy as described in this proxy statement/prospectus;

•        HCM II will have delivered to Terrestrial Energy a certificate, signed by an executive officer of HCM II and dated as of the Closing Date, certifying as to the matters described in the Business Combination Agreement;

•        HCM II will have delivered to Terrestrial Energy a certificate from its secretary or other executive officer certifying as to, and attaching, (A) copies of HCM II’s and Merger Sub’s organizational documents as in effect as of the Closing Date (after giving effect to the Domestication) and (B) the resolutions of HCM II’s

and Merger Sub’s board of directors authorizing and approving the execution, delivery and performance of the Business Combination Agreement and each of the ancillary documents to which it is a party or by which it is bound, and the consummation of the transactions contemplated thereby;

•        HCM II will file the Proposed Certificate of Incorporation with the Secretary of State of the State of Delaware and adopt the Proposed By-Laws; and

•        HCM II will have delivered, or caused to be delivered, all of the certificates, instruments, contracts, and other documents specified to be delivered by it under the Business Combination Agreement, duly executed by HCM II (as applicable).

Conditions to the Obligations of HCM II and Merger Sub

The obligations of HCM II and Merger Sub to consummate and effect the Business Combination are subject to the satisfaction or waiver of each of the following additional conditions at or prior to the Closing, any one (1) or more of which may be waived in writing exclusively by HCM II.

•        All of the representations and warranties of Terrestrial Energy set forth in the Business Combination Agreement and in any certificate delivered by or on behalf of Terrestrial Energy pursuant thereto will be true and correct on and as of the Signing Date and on and as of the Closing Date as if made on the Closing Date, except for (a) those representations and warranties that address matters only as of a particular date (which representations and warranties will have been accurate as of such date), and (b) any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Company Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect;

•        Terrestrial Energy will have performed in all material respects all of its obligations and complied in all material respects with all of the agreements and covenants under the Business Combination Agreement (other than the requirement to provide the PCAOB Financial Statements and the Interim Financial Statements by the specified deadlines) to be performed or complied with by it on or prior to the Closing Date;

•        no Company Material Adverse Effect will have occurred with respect to Terrestrial Energy and its subsidiaries, taken as a whole, since the date of the Business Combination Agreement that is continuing;

•        Terrestrial Energy having not received from the USNRC any formal written communication that would (a) have a material and adverse impact on the ability of Terrestrial Energy or its subsidiaries, taken as a whole, to consummate the Merger, or (b) prevent Terrestrial Energy or its subsidiaries from continuing their regulatory engagement with the USNRC;

•        Terrestrial Energy will have delivered to HCM II a certificate, signed by an executive officer of Terrestrial Energy and dated as of the Closing Date, certifying as to the matters described in the Business Combination Agreement;

•        Terrestrial Energy will have delivered to HCM II a certificate executed by Terrestrial Energy’s secretary certifying as to the validity and effectiveness of, and attaching, (a) copies of Terrestrial Energy’s organizational documents as in effect as of the Closing Date (immediately prior to the Closing) and (b) the requisite resolutions of Terrestrial Energy’s board of directors authorizing and approving the execution, delivery and performance of the Business Combination Agreement and each ancillary document to which Terrestrial Energy is or is required to be a party or bound, and the consummation of the Business Combination; and

•        Terrestrial Energy will have delivered, or caused to be delivered, all of the certificates, instruments, contracts and other documents specified to be delivered by it under the Business Combination Agreement, duly executed by Terrestrial Energy (as applicable).

Termination; Effectiveness

Terrestrial Energy and HCM II are able to terminate the Business Combination Agreement by mutual written consent. Additionally, either Terrestrial Energy or HCM II are able to terminate the Business Combination Agreement:

•        by written notice if any of the conditions to the Closing set forth in the Business Combination Agreement have not been satisfied or waived by the Outside Date; provided, however, the right to terminate the Business Combination Agreement will not be available to a party if the breach or violation by such party or its affiliates of any representation, warranty, covenant or obligation under the Business Combination Agreement was the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date;

•        by written notice if a governmental authority of competent jurisdiction will have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by the Business Combination Agreement, and such order or other action has become final and non-appealable; provided, however, that the right to terminate the Business Combination Agreement will not be available to either Terrestrial Energy or HCM II if the failure by it or its affiliates to comply with any provision of the Business Combination Agreement has been a substantial cause of, or substantially resulted in, such action by such governmental authority; or

•        by written notice if the Purchaser Shareholders’ Meeting (as defined in the Business Combination Agreement) has been held (including any adjournment or postponement thereof), has concluded, the shareholders of HCM II have duly voted, and the Purchaser Shareholder Approval was not obtained;

Terrestrial Energy is able to terminate the Business Combination Agreement:

•        if the board of directors of HCM II modifies its recommendation that shareholders vote “FOR” each of the Condition Precedent Proposals;

•        by written notice if a governmental authority of competent jurisdiction will have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by the Business Combination Agreement, and such order or other action has become final and non-appealable; provided, however, that the right to terminate the Business Combination Agreement will not be available to either Terrestrial Energy or HCM II if the failure by it or its affiliates to comply with any provision of the Business Combination Agreement has been a substantial cause of, or substantially resulted in, such action by such governmental authority; or

•        by written notice if the Purchaser Shareholders’ Meeting has been held (including any adjournment or postponement thereof), has concluded, the shareholders of HCM II have duly voted, and the Purchaser Shareholder Approval was not obtained.

HCM II would be able to terminate the Business Combination Agreement:

•        if there has been a Company Board Recommendation Change (as defined in the Business Combination Agreement);

•       by written notice if (a) there has been a breach by Terrestrial Energy of any of its representations, warranties, covenants or agreements contained in the Business Combination Agreement, or if any representation or warranty of such parties will have become untrue or inaccurate, in any case, which would result in a failure of certain specified conditions set forth in the Business Combination Agreement to be satisfied (treating the Closing Date for such purposes as the date of the Business Combination Agreement or, if later, the date of such breach), and (b) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (i) twenty (20) days after written notice of such breach or inaccuracy is provided to Terrestrial Energy or (ii) the Outside Date; provided, that HCM II will not have the right to terminate the Business Combination Agreement pursuant to the Business Combination Agreement if at such time HCM II is in material uncured breach of the Business Combination Agreement; or

•        by written notice if (a) all the conditions set forth in the Business Combination Agreement have been, and continue to be, satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, each of which will be capable of being satisfied if the Closing Date were the date of such termination), (b) Terrestrial Energy fails to consummate the transactions contemplated by the Business Combination Agreement on or prior to the day when the Closing is required to occur pursuant to the Business Combination Agreement, (c) HCM II will have irrevocably confirmed in writing to Terrestrial Energy that it is ready, willing and able to consummate the Closing and (d) Terrestrial Energy fails to effect the Closing within ten (10) Business Days following delivery of such confirmation.

Waiver and Amendments

At any time prior to Closing, any party to the Business Combination Agreement may, by action taken by its board of directors or other officers or persons duly authorized (a) extend the time for the performance of the obligations or acts of the other parties, (b) waive any inaccuracies in the representations and warranties (of the other party thereto) that are contained in the Business Combination Agreement or (c) waive compliance by the other parties thereto with any of the agreements or conditions contained in the Business Combination Agreement. The Business Combination Agreement may be amended, supplemented or modified only by execution of a written instrument signed by HCM II and Terrestrial Energy.

Expenses

HCM II and Terrestrial Energy agree that they are entitled to seek an injunction or restraining order to prevent breaches and to seek specific enforcement of the terms and provisions of the Business Combination Agreement, without the requirement to post any bond or other security or to prove that money damages would be inadequate, in addition to any other right or remedy to which such party may be entitled under the Business Combination Agreement, at law or in equity.

Governing Law; Consent to Jurisdiction

The Business Combination Agreement is governed by the laws of the State of Delaware. The parties to the Business Combination Agreement have irrevocably submitted to the exclusive jurisdiction of federal and state courts located in the State of Delaware.

For more information, see “The Business Combination Proposal — Background of the Business Combination”.

The HCM II Board’s Reasons for the Approval of the Business Combination

Before reaching its unanimous decision on March 26, 2025, the HCM II Board consulted with its management team, legal counsel and other advisors. The HCM II Board considered a variety of factors in connection with its evaluation of the Business Combination in approving and recommending the transaction to the HCM II shareholders. In light of the complexity of those factors, the HCM II Board did not consider it practicable to, nor did it attempt to, quantify or otherwise assign relative weights to the specific factors it took into account in reaching its decision. Different individual members of the HCM II Board may have given different weight to different factors in their evaluation of the Business Combination.

Further, the prospectus for the IPO identified the general criteria and guidelines that HCM II believed would be important in evaluating prospective target businesses, although HCM II also indicated it may enter into a business combination with a target business that does not meet these criteria and guidelines. The HCM II Board considered these criteria in its evaluation of Terrestrial Energy, which include identifying companies that (i) generate or have the future potential to generate stable free cash-flow, (ii) have attractive unit economies at scale, (iii) demonstrate advantages when compared to their competitors (iv) have experienced management teams or provide a platform for us to assemble an effective and capable management team and (v) have a leading or niche market position and that demonstrate advantages when compared to their competitors. HCM II also considered seeking large, highly complex companies that we believe would benefit from operational improvements.

For a description of the HCM II Board’s reasons for the approval of the Business Combination and the unanimous recommendation of the HCM II Board, see the subsection entitled “The Business Combination Proposal — The HCM II Board’s Reasons for the Approval of the Business Combination”.

Sources and Uses for the Business Combination

The following tables summarize the sources and uses for funding the Business Combination (i) assuming that none of the outstanding HCM II Class A Ordinary Shares are redeemed in connection with the Business Combination and (ii) assuming that all of the HCM II Class A Ordinary Shares are redeemed in connection with the Business Combination. For an illustration of the number of shares and percentage interests outstanding under each scenario see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information”.

No Redemption

____________

(1)      Represents the aggregate value of shares issued to Terrestrial Energy Stockholders at a deemed value of $10.00 per share, which per-share value may change based on the redemption price (which change would result in either a decrease or increase in the total number of shares Terrestrial Energy Stockholders will receive). Assumes $10.00 of New Terrestrial Common Shares issued to current Terrestrial Energy Stockholders. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for more information.

(2)      Represents an estimated amount inclusive of advisory, printing, legal, accounting fees, and certain bonuses to be paid upon the close of the Business Combination. Includes $10.7 million paid to Cantor pursuant to the Underwriting Agreement.

(3)      Represents approximately $25 million of Terrestrial Convertible Notes plus accrued interest, converting at a 25% discount, assuming a Closing on September 30, 2025.

Maximum Redemption

____________

(1)      Represents the aggregate value of shares issued to Terrestrial Energy Stockholders at a deemed value of $10.00 per share, which per-share value may change based on the redemption price (which change would result in either a decrease or increase in the total number of shares Terrestrial Energy Stockholders will receive). Assumes $10.00 of New Terrestrial Common Shares issued to current Terrestrial Energy Stockholders. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for more information.

(2)      Represents an estimated amount inclusive of advisory, printing, legal, accounting fees, and certain bonuses to be paid upon the close of the Business Combination. Includes $10.7 million paid to Cantor pursuant to the Underwriting Agreement.

(3)      Represents approximately $25 million of Terrestrial Convertible Notes plus accrued interest, converting at a 25% discount, assuming a Closing on September 30, 2025.

U.S. Federal Income Tax Considerations of the Domestication and for Holders of HCM II Class A Ordinary Shares Exercising Redemption Rights

For a discussion summarizing material U.S. federal income tax considerations and consequences of the Domestication and an exercise of redemption rights in connection with the Business Combination, please see “U.S. Federal Income Tax Considerations for Holders of HCM II Securities and New Terrestrial Energy Securities”.

U.S. Federal Income Tax Considerations of the Merger

For a discussion summarizing material U.S. federal income tax considerations and consequences of the Merger, please see “U.S. Federal Income Tax Considerations for Holders of HCM II Securities and New Terrestrial Energy Securities” and “U.S. Federal Tax Income Tax Considerations for Holders of Terrestrial Energy Stock and Terrestrial Energy”.

Summary Risk Factors

In evaluating the proposals to be presented at the extraordinary general meeting, shareholders should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section of this proxy statement/prospectus entitled “Risk Factors” beginning on page 52. In particular, such risks include, but are not limited to, the following:

Risks Related to HCM II and the Business Combination

•        Directors and officers of HCM II, the Sponsor and their affiliates have interests in the Business Combination and the proposals described in this proxy statement/prospectus that are different from, or in addition to and/or in conflict with, those of the HCM II shareholders generally.

•        The Sponsor and HCM II’s directors and officers have agreed to vote in favor of the Business Combination, regardless of how our Public Shareholders vote.

•        The ability of our Public Shareholders to exercise redemption rights with respect to a large number of our Public Shares could increase the probability that the Business Combination will be unsuccessful and that you would have to wait for liquidation in order to redeem your Public Shares.

•        The Sponsor, HCM II’s or Terrestrial Energy’s directors, officers, advisors and their affiliates may elect to purchase Public Shares or Public Warrants, which may influence a vote on the Business Combination and reduce the public “float” of the Public Shares or Public Warrants.

•        Past performance by our management team, our advisors and their respective affiliates, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in New Terrestrial Energy.

•        HCM II cannot assure you that its diligence review has identified all material risks associated with the Business Combination, and you may be less protected as an investor from any material issues with respect to Terrestrial Energy’s business, including any material omissions or misstatements contained in the Registration Statement or this proxy statement/prospectus relating to the Business Combination, than an investor in an underwritten initial public offering.

•        HCM II (or New Terrestrial Energy) will not have any right to make damage claims against Terrestrial Energy for the breach of any representation, warranty or covenant made by Terrestrial Energy in the Business Combination Agreement.

•        HCM II’s shareholders will experience dilution due to the issuance of shares of New Terrestrial Common Shares and securities convertible into the shares of New Terrestrial Common Shares to the Terrestrial Stockholders as consideration in the Business Combination.

•        Subsequent to the consummation of the Business Combination, New Terrestrial Energy may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on New Terrestrial Energy’s financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

•        New Terrestrial Energy’s actual financial position and results of operations may differ materially from the unaudited pro forma financial information included in this proxy statement/prospectus.

•        The projections and forecasts presented in this proxy statement/prospectus may not be an indication of the actual results of the transaction or New Terrestrial Energy’s future results.

•        There can be no assurance that the New Terrestrial Common Shares and New Terrestrial Warrants issued in connection with the Business Combination will be approved for listing on Nasdaq following the Closing.

•        There is substantial doubt about our ability to continue as a going concern.

•        If third parties bring claims against HCM II, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.05 per share.

•        HCM II’s directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to the Public Shareholders.

•        We may not have sufficient funds to satisfy indemnification claims of our directors and officers.

•        If, before distributing the proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

•        If, after HCM II distributes the proceeds in the Trust Account to its Public Shareholders, it files a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against it that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of the HCM II Board may be viewed as having breached their fiduciary duties to HCM II’s creditors, thereby exposing the members of the HCM II Board and HCM II to claims of punitive damages.

•        The SEC has recently issued final rules to regulate special purpose acquisition companies. Certain of the procedures that we may determine to undertake in connection with such rules may increase our costs and the time needed to complete the Business Combination or any other initial business combination and may constrain the circumstances under which we could complete the Business Combination, or any other initial business combination.

•        There is a risk that the 1% U.S. federal excise tax may be imposed on us in connection with redemptions of Public Shares.

•        If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete the Business Combination or another initial business combination or force us to abandon our efforts to complete an initial business combination.

•        We may not be able to complete the Business Combination, or another initial business combination, since such initial business combination may be subject to regulatory review and approval requirements, including foreign investment regulations and review by government entities such as the Committee on Foreign Investment in the United States (“CFIUS”), or may be ultimately prohibited.

•        HCM II’s shareholders may be held liable for claims by third parties against HCM II to the extent of distributions received by them upon redemption of their shares.

•        HCM II’s Letter Agreement with the Sponsor and HCM II’s officers and directors may be amended without shareholder approval.

•        If you or a “group” of shareholders are deemed to hold in excess of 15% of the Public Shares, you may lose the ability to redeem all such shares in excess of 15% of our Public Shares.

•        You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your Public Shares or Public Warrants, potentially at a loss.

•        A Public Shareholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account may not put such shareholder in a better future economic position.

•        The net cash available to New Terrestrial Energy from the Trust Account and the financings described in this proxy statement/prospectus in respect of each Public Share that is not redeemed will be materially less than the price per share implied in the Business Combination Agreement to the shares of New Terrestrial Common Shares to be issued to the Terrestrial Stockholders.

•        If a Public Shareholder fails to receive notice of our offer to redeem the Public Shares in connection with the Business Combination, or fails to comply with the procedures for submitting or tendering its Public Shares, such Public Shares may not be redeemed.

•        If we are unable to consummate the Business Combination or another initial business combination by the date required in the Cayman Constitutional Documents, the Public Shareholders may be forced to wait beyond such date before redemption from our Trust Account.

•        The completion of the Business Combination is subject to certain closing conditions, including satisfaction of all closing conditions in the Business Combination Agreement, including minimum cash requirements and market-based conditions, any of which may make it more difficult for HCM II to complete the Business Combination as contemplated and may result in the Business Combination not being consummated.

•        The exercise of HCM II’s management’s discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in the HCM II shareholders’ best interest.

•        If the subscribers party to the PIPE Subscription Agreements exercise their right to reduce the number of subscribed shares, the gross amount of the proceeds received by Terrestrial Energy in the PIPE Financing will be less than $50,000,000.

•        HCM II may be targeted by securities class action and derivative lawsuits that could result in substantial costs and may delay or prevent the Business Combination from being completed.

•        The terms of the HCM II Warrants may be amended in a manner that may be adverse to holders with the approval by the holders of at least 50% of the then outstanding Public Warrants.

•        The Warrant Agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our Warrants, which could limit the ability of Warrant holders to obtain a favorable judicial forum for disputes.

•        A provision of the Warrant Agreement may make it more difficult for HCM II to consummate the Business Combination.

Risks Related to the Adjournment Proposal

•        If the Adjournment Proposal is not approved, and a quorum is present but an insufficient number of votes have been obtained to approve the Business Combination Proposal, the HCM II Board will not have the ability to adjourn the extraordinary general meeting to a later date in circumstances where such adjournment is necessary to permit the Business Combination to be approved.

Risks Related to the Domestication and the Business Combination

•        The Domestication may result in adverse tax consequences for holders of HCM II Class A Ordinary Shares and HCM II Warrants.

Risks Related to Our Business and Industry

•        We have not yet constructed an IMSR Plant, nor have we entered into any binding contract with any customer, including any of our current portfolio of project consortium partners, to operate an IMSR Plant or deliver electricity or heat, and there is no guarantee that we will be able to do so in the future. Our limited commercial operating history makes it difficult to evaluate our prospects, the risks and challenges we may encounter and our total potential addressable market.

•        Any delays in the development and construction of our IMSR plants and the manufacturing of their key components due to a number of factors, including the degree of pre-fabrication, standardization, on-site construction, long-lead procurement, contractor performance, plant pre-operational and startup testing and other site-specific considerations may adversely impact our business and financial condition.

•        Our limited commercial operating history in a rapidly evolving industry makes it difficult for us to evaluate our future prospects and prepare for the risks and challenges we may encounter.

•        If we fail to manage our growth effectively, we may be unable to execute our business plan, and our business, results of operations, and financial condition could be harmed.

•        IMSR Plants may suffer significant construction delays or cost increases as a result of a variety of factors. Any such delays could cause the construction of a project to ultimately be unprofitable for the Company or otherwise adversely affect the Company’s business, financial condition and results of operations.

•        Any failure to effectively update the design, construction, and operations of our planned IMSR Plants to ensure cost competitiveness could reduce the marketability of our designs and has the potential to impact deployment schedules.

•        Successful commercialization of new, or further enhancements to existing, alternative low-carbon energy generation technologies, such as adding carbon capture and sequestration/storage mechanisms to fossil fuel power plants, wind, solar, geothermal or fusion, may prove to be more cost effective or appealing to the global energy markets and therefore may adversely affect the market demand for our IMSR Plants, potentially adversely affecting our ability to successfully commercialize our IMSR Plants.

•        If demand for our IMSR Plants fails to develop sufficiently, our business and operations could suffer, and we would be unable to achieve or maintain profitability.

•        Our IMSR Plant design may not attract customers as quickly as we expect, or at all.

•        Customers may rescind or back out of non-binding agreements due to various reasons, which could adversely affect our revenue streams, project timelines, and overall financial performance.

•        Our cost estimates are sensitive to broader economic factors, and our ability to control or manage our costs may be limited.

•        Competition from existing or new competitors or technologies domestically and internationally could cause us to experience one or more of downward pressures on prices, lower customer demand for our products and services, reduced margins, the inability to take advantage of new business opportunities and the loss of market share.

•        Changes in the availability and cost of electricity, natural gas, oil and other forms of energy are subject to volatile market conditions that could adversely affect our business prospects, financial condition, results of operations and cash flows.

•        The potential disruption of uranium supply chains makes long-range planning uncertain.

•        The cost of electricity and heat generated from nuclear sources may not be cost competitive with other electricity generation sources and/or heat generated from other sources in some markets, which could materially and adversely affect our business prospects, financial condition, results of operations and cash flow.

•        Our illustrative unit economics are subject to significant risks, assumptions, estimates, and uncertainties. As a result, our actual revenues, timing for achieving business milestones, expenses, capital expenditures, profitability and cash flows may differ materially from our expectations.

•        The IMSR plants may not operate as planned.

•        We and our customers operate in a politically sensitive environment, and the public perception of nuclear energy and radioactive materials could materially and adversely affect us, our customers, and the markets in which we operate.

•        Incidents involving nuclear energy facilities, including accidents, terrorist acts or other high-profile events involving radioactive materials, could materially and adversely affect the public perception of the safety of nuclear energy, and such adverse effects could potentially decrease demand for nuclear energy, increase regulatory requirements and costs, or result in liability or claims that could materially and adversely affect our business.

•        The direct and indirect impact on us and our customers from severe weather and other effects of climate change and the economic impacts of the transition to low-emissions energy, could adversely affect our financial condition, operating results, and cash flows.

•        The occurrence of adverse events, cancellations of significant projects, delays in project timelines, adjustments in cost structures, and other negative developments announced by competitors could have an impact on our operations, financial performance, and future prospects.

•        The IMSR Plant involves toxic, hazardous and/or radioactive materials and could result in liability without regard to fault or negligence.

•        Unsatisfactory safety performance or security incidents at our customers’ facilities — or any nuclear facility around the world — could have a material adverse effect on our business, financial condition and results of operations.

•        We are subject to information technology and cyber security threats which could have adverse effects, including regulatory effects, on our business and results of operations.

•        We rely on a limited number of suppliers for certain materials and supplied components, some of which are highly specialized and are being designed for first-of-a-kind or sole use in the IMSR Plant. We and our third-party vendors may not be able to obtain sufficient materials or supplied components to meet our manufacturing and operating needs, or obtain such materials on favorable terms or at expected costs.

•        We depend on key executives, management, directors, and other highly skilled personnel with highly technical expertise to execute our business plan and oversee our operations, as applicable. Our failure to successfully recruit and retain experienced and qualified personnel could have a material adverse effect on our business.

•        Our ability to protect our patents and other intellectual property rights may be challenged and is not guaranteed. If we are unable to protect our intellectual property rights, our business and competitive position may be harmed.

•        We currently enjoy only limited geographical protection with respect to certain issued patents and trademarks and may not be able to protect our intellectual property rights throughout the world. If we are unable to protect our intellectual property rights, our business and competitive position may be harmed.

•        We may need to defend ourselves against intellectual property infringement claims, which may be time-consuming and could cause us to incur substantial fees and costs.