SecProbe.io

June 26, 2025
Shawn Matthews
Chief Executive Officer
HCM II Acquisition Corp.
100 First Stamford Place, Suite 330
Stamford, CT 06902
Simon Irish
Chief Executive Officer
Terrestrial Energy Inc.
9319 Robert D. Snyder Rd.
Charlotte, NC 28223
Re:HCM II Acquisition Corp.
Draft Registration Statement on Form S-4
Submitted on May 30, 2025
CIK No. 0002019804
Dear Shawn Matthews and Simon Irish:
            We have reviewed your draft registration statement and have the following comments.
            Please respond to this letter by providing the requested information and either
submitting an amended draft registration statement or publicly filing your registration
statement on EDGAR. If you do not believe a comment applies to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing the information you provide in response to this letter and your
amended draft registration statement or filed registration statement, we may have additional
comments.
Draft Registration Statement on Form S-4
Cover Page
1.Please state the amount of all compensation received or to be received by the Sponsor,
its affiliates, and promotors on the cover page. In this regard, we note references
elsewhere to compensation to be received by Shawn Matthews and the independent
directors ( e.g., page 13). Refer to Item 1604(a)(3) of Regulation S-K.

June 26, 2025
Page 2
2.Please briefly describe any material financing transactions that have occurred since
the initial public offering. In this regard, we note references elsewhere to (i) a
$2,500,000 convertible promissory note issued to the Sponsor and (ii) working
capital loans and advances by the Sponsor and HCM II's officers and directors.
Additionally revise your summary to discuss material terms of such financing
transactions. Please refer to Items 1604(a)(2) and 1604(b)(5) of Regulation S-K. File
the promissory note and working capital loan agreement as exhibits to your
registration statement, or advise. Include relevant information within your
compensation disclosures.
Questions and Answers for Shareholders of HCM II
Q. What equity stake will current HCM II shareholders and Terrestrial Stockholders hold...?,
page xviii
3.Please revise to explain the terms "Terrestrial Energy Shareholders" and "Terrestrial
Energy Debt Holders." Revised disclosure should clarify how Terrestrial options,
units, warrants, notes, and other outstanding securities are reflected for ownership
purposes (non-diluted and fully-diluted) and quantify underlying shares, identifying
any needed assumptions. In this regard, we note disclosure on page 255 that units
issued in the 2024 bridge financing will receive additional shares based on the trading
price following the lock-up period. Please also clarify how shares issuable in
connection with the recapitalization are treated for ownership purposes
throughout. Discuss the call options referenced on page F-64 in an appropriate
section, including the related person transactions section as applicable.
Q. Why is HCM II proposing the Domestication?, page xix
4.We note that the Sponsor and independent directors hold 100% of the outstanding
HCM II Class B Ordinary Shares, and that only holders of the HCM II Class B
Ordinary Shares may vote in connection with the Domestication Proposal. If approval
of the Domestication Proposal is assured, revise to state so specifically and to
highlight that for investors.
Q. What conditions must be satisfied to complete the Business Combination?, page xxvi
5.We note the closing condition that the waiting period with the U.S. Nuclear
Regulatory Commission (NRC) has expired or has been terminated, but also
disclosure on page 127 that the parties are not aware of any material regulatory
approvals or actions required for completion of the business combination, other than
the antitrust filing and waiting period. Please revise to clearly disclose whether or not
an NRC filing and/or waiting period is required for the business combination.
Additionally revise your disclosure to clearly identify all material closing conditions
(revising the reference to "certain") and to indicate which may be waived.
Q. Who is the Sponsor?, page xxx
We note disclosure that the Sponsor is controlled by Shawn Matthews, and that Mr.
Matthews has economic interests of 51.3% in the Founder Shares and 18.1% in the
Private Placement Warrants held by the Sponsor. Please revise to disclose that the
non-managing sponsor investors hold the remaining economic interests, if true, 6.

June 26, 2025
Page 3
and revise or explain your disclosure that "No other person has a direct or indirect
material interest in the Sponsor." Refer to Item 1603(a)(7) of Regulation S-K.
Additionally disclose whether Mr. Matthews has sole management (including voting)
control of the Sponsor. Reconcile disclosure here that, "Each other director and officer
of HCM II have economic interests in the Founder Shares and/or Private Placement
Warrants held by the Sponsor," with disclosure on page 10 that, "No other director or
officer of HCM II has economic interests in the Founder Shares/Private Placement
Warrants."
7.We note disclosure that "HCM II's management believes MRNO represents a high-
quality, public-ready company with an attractive valuation" and "HCM I supported
the HCM II transaction with extensive due diligence, significant investor outreach and
comprehensive planning." Please revise to clarify the relevance of the prior SPAC and
target to this current transaction. To the extent that HCM I has involvement in the
current transaction, provide disclosure in the related person transactions section and
elsewhere as appropriate. We further note that a Form S-1 has been filed for HCM
III's initial public offering; please update this section accordingly.
Summary of the Proxy Statement/Prospectus, page 1
8.Please revise the diagram on page 3 to separately show the ownership of the Sponsor,
other inside shareholders, and public shareholders. Additionally show the PIPE
shareholders.
Quorum and Vote of HCM II Shareholders, page 8
9.Please revise to disclose the percentage of shares held by public shareholders that is
required to approve each proposal, clearly stating if none is required. In this regard,
we note that 37.5% of Public Shares are required for the Business Combination
Proposal, but percentages are not disclosed for other proposals. We also note
disclosure that, "If only the minimum number of shares representing a quorum are
voted, no additional shares would need to be voted in favor;" please revise to clearly
state the percentage of public shareholders needed to establish a quorum and whether
any public shareholders are required to vote in favor.
Certain Interests of HCM II’s Directors and Officers..., page 10
10.Please provide a brief summary of the conflicts of interest of the target company
officers and directors and unaffiliated security holders. Please refer to Item 1604(b)(3)
of Regulation S-K.
11.We note disclosure that, since shares and warrants will be subject to lock-up
restrictions, you believe such securities have less value. Please remove or revise to
more fully explain whether and how transfer restrictions affect value, including
whether the end of the lock-up period would restore full value.
Compensation Received by the Sponsor..., page 13
Please revise the compensation table to include Mr. Matthews’ appointment as a New
Terrestrial director, and additionally discuss this directorship on page 124.
Specifically discuss the New Equity Incentive Plan here and/or on page 12 as 12.

June 26, 2025
Page 4
appropriate; in this regard we note disclosure on page 147 regarding New Terrestrial
management's personal interest in the Plan. Quantify the New Terrestrial shares
issuable to Mr. Matthews upon (i) conversion of the $4,000,000 Terrestrial
Convertible Notes and (ii) exercise of the 40,000 Terrestrial Warrants, identifying any
necessary assumptions. Disclose the convertible promissory note issued to the
Sponsor, and quantify the outstanding working capital loans and reimbursable
expenses as of the date of the proxy statement/prospectus, consistent with disclosures
elsewhere ( e.g., pages 33, 215). Quantify amounts payable to sponsor under the
administrative services agreement, and clarify whether these are included within
"reimbursable expenses."
Dilution to HCM II's Shareholders, page 15
13.Please address the following as it relates to your dilution disclosures:
•Update the dilution table to reflect the information as of March 31, 2025 or the
most recent balance sheet date of HCM II included in the filing.
•Revise the net tangible book value, as adjusted, amounts to reflect the payment of
deferred underwriting fees upon closing of the business combination.
•Revise to reflect the forward purchase agreement, including potential impact of
the forward purchases on Dilution calculations, if any.
14.We note disclosure on page 77 that the Sponsor may convert working capital loans
into 1,500,000 Warrants. Please discuss, by footnote or otherwise, the contingent
issuance of such Warrants and potential dilutive effects thereof.
Background and Material Terms of the Business Combination, page 18
15.Please provide a summary of the material terms of the business combination. Please
refer to Item 1604(b)(1) of Regulation S-K.
Summary Risk Factors
Risks Related to HCM II and the Business Combination, page 22
16.We note disclosure that the business combination is subject to the closing conditions
that HCM II have at least $5,000,0001 in net tangible assets and $150,000,000 in
available cash ( e.g., page 174). Please include risk factor disclosure regarding these
closing conditions, including the impact on public shareholders in the event
redemptions cause such conditions (and the separate $75,000,000 million PIPE
closing condition) not to be met. Expand the risk factor on pages 46-47 to additionally
discuss the consequences and related risks to public shareholders.
Risks Related to Our Business and Industry, page 23
17.Please revise to specifically disclose whether you are required to obtain NRC approval
of the Integral Molten Salt Reactor (IMSR) and discuss the consequences and related
risks if such approval is not obtained. Revise disclosure on page 55 to clarify the
regulatory status of your IMSR design (and/or its key components) compared with the
other developers’ designs disclosed to be in “preapplication review with the NRC.” In
this regard, we note disclosure on page 70 that appears to indicate you are not yet in
“formal application review” and on page 229 that refers to a "pre-application phase."

June 26, 2025
Page 5
Risk Factors
HCM II's shareholders will experience dilution..., page 36
18.Please expand your disclosure to more fully discuss the effects of dilution on non-
redeeming public shareholders, for instance under the maximum contractual
redemption scenario.
The Warrant Agreement designates the courts..., page 48
19.We note that the exclusive forum provision in the warrant agreement applies to
Securities Act claims. Please revise to state that there is uncertainty as to whether a
court would enforce such provision and that investors cannot waive compliance with
the federal securities laws and the rules and regulations thereunder. In that regard, we
note that Section 22 of the Securities Act creates concurrent jurisdiction for federal
and state courts over all suits brought to enforce any duty or liability created by the
Securities Act or the rules or regulations thereunder. Include analogous disclosure on
page 78 in relation to New Terrestrial's certificate of incorporation, which provides
the federal district courts will be the exclusive forum for Securities Act and Exchange
Act claims.
Customers may rescind or back out of non-binding agreements..., page 55
20.We note media reports dated February 2025 that Terrestrial Energy and three other
small nuclear reactor developers have signed agreements with Texas A&M. Please
update your disclosure that no binding agreement has been signed with Texas
A&M or advise.
Our ability to procure a stable nuclear fuel supply is reliant on a limited number of fuel
vendors..., page 55
21.We note your disclosure that you are dependent on a few suppliers to provide raw
materials. Please expand your disclosure to describe the material terms of your long-
term supply agreement and file any material supply or manufacturing agreements as
exhibits to the registration statement. Please also disclose the risks of this reliance and
any disruptions you have experienced due to such reliance.
We are part of the nuclear power industry, which is highly regulated..., page 68
22.We note disclosure that NRC review of your IMSR fuel salt and IMSR plant may be
longer/prolonged and more extensive, due to their novel nature. Please revise this and
following risk factors as appropriate to clearly disclose the current status of your NRC
review, future steps, expected timing, and specific related risks. Provide analogous
information with respect to any other regulatory reviews you are undertaking.
The Business Combination Proposal, page 87
23.State whether or not a majority of the directors (or members of similar governing
body) who are not employees of HCM II has retained an unaffiliated representative to
act solely on behalf of unaffiliated security holders for purposes of negotiating the
terms of the de- SPAC transaction and/or preparing a report concerning the approval
of the de-SPAC transaction. Please refer to Item 1606(d) of Regulation S-K.

June 26, 2025
Page 6
Background of the Business Combination, page 108
24.We note disclosure regarding multiple drafts of the business combination
agreement. Please revise to describe negotiations relating to material terms of the
transaction, including but not limited to structure, consideration, equity financing, and
continuing employment or involvement for any persons affiliated with the SPAC
before the merger. In your revised disclosure, please explain the reasons for the terms,
each party's position on the issues (including proposals and counter-proposals), and
how you reached agreement on the final terms.
25.We note disclosure on page 111 regarding Mr. Matthews' purchase, in a personal
capacity, of $40,000,000 in Terrestrial Convertible Notes. Please expand to discuss
the material terms and conditions of these notes. Additionally discuss Mr. Matthews'
acquisition of 40,000 Terrestrial Warrants, including their material terms and
conditions. Reconcile disclosure on page 124 which refers to the issuance of a single
Terrestrial Warrant to purchase up to 40,000 Terrestrial Class A Units.
26.Please revise to include any discussions about the need to obtain additional financing
for the combined company, such as the PIPE transaction, and the negotiation and
marketing processes. Without limitation, disclose (i) who selected the potential PIPE
investors, (ii) what relationships PIPE investors have to HCM II, the Sponsor,
Terrestrial, the placement agent, and/or their respective affiliates, (iii) how terms of
the PIPE transaction were determined, and (iv) whether there were any valuations or
other material information about HCM II, Terrestrial, or the business combination
provided to PIPE investors that have not been disclosed publicly. If the Sponsor made
any payments in connection with additional financing, provide the disclosure required
by Item 1605(b)(2) of Regulation S-K.
The HCM II Board's Reasons for the Approval of the Business Combination, page 112
27.We note disclosure that the HCM II Board concluded the Business Combination met
its evaluation criteria, and that the unit economics criteria states, “We will focus on
one or more businesses that have established and growing revenue streams. We do not
intend to acquire startup companies, companies with speculative business plans, or
companies that are excessively leveraged.” Please include