Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Report including, without limitation, statements under this Item regarding our financial position, business strategy and the plans and objectives of Management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our Management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of our Management, as well as assumptions made by, and information currently available to, our Management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and the notes thereto contained elsewhere in this Report.
Overview
We are a Cayman Islands exempted company incorporated as a blank check company on December 6, 2021. We were formed for the purpose of effecting an initial Business Combination.
Although we are not limited to a particular industry or geographic region for purposes of consummating an initial Business Combination, we focus on opportunities in environmental protection, renewable energy, fighting climate change, and any other related industries. We target companies with established operating models that have strong management teams, realigned capital structures, positive cash flows prospects, and a clear and well-defined pathway for growing profitably over the long-term. We are an early-stage and emerging growth company and, as such, we are subject to all of the risks associated with early-stage and emerging growth companies.
As of December 31, 2024, we had not yet commenced any operations. All activity through December 31, 2024 relates to our formation and our Initial Public Offering, which is described below, and post-Initial Public Offering, searching for a target to consummate and consummating an initial Business Combination. We will not generate any operating revenues until after the completion of our initial Business Combination, at the earliest. We will generate nonoperating income in the form of interest income from the proceeds derived from the Initial Public Offering. We have selected December 31 as our fiscal year end.
The IPO Registration Statement was declared effective o n April 27, 2022. On May 2, 2022, we consummated our Initial Public Offering of 7,875,000 Units at $10.00 per Unit, including 375,000 Option Units that were issued pursuant to the partial exercise of the Over-Allotment Option, generating gross proceeds of $78,750,000. the sale of 3,762,500 Private Placement Warrants with an exercise price of $11.50 per warrant at a price of $1.00 per Private Placement Warrant to our Sponsor.
Simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreement, we completed the private sale of an aggregate of 3,762,500 Private Placement Warrants to our Sponsor in the Private Placement a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds of $3,762,500.
Management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the Private Placement, although substantially all of the net proceeds have been and will continue to applied generally toward consummating an initial Business Combination. Nasdaq rules provide that the initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (net of amounts disbursed to Management for working capital purposes). We will only complete an initial Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that We will be able to successfully effect an initial Business Combination.
Upon the closing of the Initial Public Offering, $10.15 per Unit sold in the Initial Public Offering was placed in the Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by us, until the earlier of: (i) the consummation of an initial Business Combination or (ii) the distribution of the funds in the Trust Account to our shareholders, as described below. To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, on May 2, 2024, we instructed the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing demand deposit account at a bank until the earlier of the consummation of our initial Business Combination or our liquidation.
Our Sponsor, directors and officers have agreed (a) to vote their Founder Shares and any Public Shares purchased during or after the Initial Public Offering in favor of an initial Business Combination, (b) not to propose an amendment to the Amended and Restated Articles with respect to our pre-Business Combination activities prior to the consummation of an initial Business Combination unless we provide dissenting Public Shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment; (c) not to redeem any Ordinary Shares (including the Founder Shares) into the right to receive cash from the Trust Account in connection with a shareholder vote to approve an initial Business Combination (or to sell any Ordinary Shares in a tender offer in connection with an initial Business Combination if we do not seek shareholder approval in connection therewith) or a vote to amend the provisions of the Amended and Restated Articles relating to shareholders’ rights of pre-Business Combination activity and (d) that the Founder Shares and the Private Placement Warrants (including underlying securities) shall not participate in any liquidating distributions upon winding up if an initial Business Combination is not consummated. However, our Sponsor, directors and officers will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or after the Initial Public Offering if we to complete its initial Business Combination.
Recent Developments
On January 6, 2025, the Nasdaq Panel granted our request for an exception to the Public Holders Requirement until April 7, 2025, at which time we needed to demonstrate compliance with the Public Holders Requirement. On April 2, 2025, we notified the Nasdaq Panel that we would not be able to close our initial Business Combination by the Nasdaq Panel’s April 7, 2025 deadline.
On April 8, 2025, we received written notice from the Nasdaq Panel indicating that the Nasdaq Panel had determined to delist our securities from Nasdaq and that trading in our securities would be suspended at the open of trading on April 10, 2025, due to our failure to comply with the terms of its earlier decision. Pursuant to such decision, among other things, we were required to complete our initial Business Combination by no later than April 7, 2025. Accordingly, the Nasdaq Panel determined to delist our securities from Nasdaq. Our public securities were suspended from Nasdaq on April 10, 2025; however, as of the date of this Report, the Form 25-NSE has not yet been filed to delist our securities from Nasdaq.
Following the suspension of trading on Nasdaq, our Units, Public Shares, Public Warrants and Rights are quoted on the Pink tier of the OTC under the symbols “CLRCUF,” “CLRCF,” “CLRCWF,” and “CLRCRF”, respectively.
On March 26, 2025, Abhishek Bawa notified the Board of his resignation as our Chief Financial Officer, effective as of March 26, 2025.
On April 13, 2025, Michael Geary was appointed to serve as our Interim Chief Financial Officer, effective as of April 10, 2025.
On April 17, 2025, we filed the 2025 Proxy Statement in connection with an upcoming extraordinary general meeting of our shareholders to, among other things, seek (i) an extension of the Combination Period from May 2, 2025 to November 2, 2025 and (ii) to eliminate the Redemption Limitation from the Amended and Restated Articles.
As of June 24, 2025, we borrowed an additional $288,448 beyond the initial terms of the Seventh Eternal Loan. As of June 24, 2025, the outstanding balance of the Seventh Eternal Loan was $1,788,448.
Extensions of our Combination Period
On April 27, 2023, we held the 2023 EGM and approved, among other things, an amendment to the Amended and Restated Articles to (i) extend the Combination Period from November 2, 2023 to May 2, 2024 (or such earlier date as determined by the Board of Directors in its sole discretion) and (ii) to permit the Board of Directors, in its sole discretion, to elect to wind up our operations on, or on an earlier date than May 2, 2024 (including prior to May 2, 2023). In connection with the 2023 EGM, Public Shareholders holding 5,297,862 Public Shares exercised their right to redeem such Public Shares for a pro rata portion of the funds in the Trust Account in the 2023 Redemptions. As a result, $55,265,334 (approximately $10.43 per Public Share) was removed from the Trust Account to pay such Public Shareholders.
On April 29, 2024, we held the 2024 EGM and approved, among other things, an amendment to the Amended and Restated Articles to (i) extend the Combination Period from May 2, 2024 to May 2, 2025 (or such earlier date as determined by the Board of Directors in its sole discretion) and (ii) to permit the Board of Directors, in its sole discretion, to elect to wind up our operations on, or on an earlier date than May 2, 2025. In connection with the 2024 EGM, Public Shareholders holding 111,915 Public Shares exercised their right to redeem such Public Shares for a pro rata portion of the funds in the Trust Account. As a result, approximately $1.27 million (approximately $11.37 per Public Share) was removed from the Trust Account to pay such Public Shareholders.
We may seek to further extend the Combination Period consistent with applicable laws and regulations by amending the Amended and Restated Articles. Such an amendment would require the approval of our Public Shareholders, who will be provided the opportunity to redeem all or a portion of their Public Shares in connection with the vote on such approval. Such redemptions will decrease the amount held in our Trust Account and our capitalization.
On April 30 and May 1, 2025, we held the 2025 EGM and approved, among other things, an amendment to the Amended and Restated Articles to (i) extend the Combination Period from May 2, 2025 to November 2, 2025 (or such earlier date as determined by the Board of Directors in its sole discretion) and (ii) to permit the Board of Directors, in its sole discretion, to elect to wind up our operations on, or on an earlier date than November 2, 2025. In connection with the 2025 EGM, Public Shareholders holding 2,016,792 Public Shares exercised their right to redeem such Public Shares for a pro rata portion of the funds in the Trust Account. As a result, approximately $24.67 million (approximately $12.23 per Public Share) was removed from the Trust Account to pay such Public Shareholders as of June 18, 2025.
Founder Share Conversion
On March 31, 2023, the Sponsor elected to convert 1,968,749 Class B Ordinary Shares to Class A Ordinary Shares, on a one-for-one basis in the Founder Share Conversion. The Class A Ordinary Shares issued in the Founder Share Conversion are subject to the same restrictions as applied to the Class B Ordinary Shares before the Founder Share Conversion, including among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial Business Combination as described in the IPO Registration Statement.
Following the Founder Share Conversion and the Extension Redemptions, there were 2,535,305 Class A Ordinary Shares and one Class B Ordinary Share issued and outstanding and the Sponsor holds approximately 77.65% of the issued and outstanding Ordinary Shares.
Termination of Proposed Business Combination with EEW
On October 6, 2022, we entered into a Business Combination Agreement with Pubco, SPAC Merger Sub, and E.E.W. Eco Energy World PLC, a company formed under the laws of England and Wales (“EEW”). On August 3, 2023, we entered into an Amended and Restated Business Combination Agreement (as amended and restated, the “Original Business Combination Agreement”) with Pubco, SPAC Merger Sub and EEW.
On November 29, 2023, we notified EEW that we had elected to terminate the Original Business Combination Agreement effective immediately, pursuant to Section 9.1(b) and 9.2 thereof, since the conditions to the closing of such Business Combination were not satisfied or waived by the outside date of September 30, 2023. As a result, the Original Business Combination Agreement is of no further force and effect, except for certain specified provisions in the Original Business Combination Agreement, which survive its termination and remain in full force and effect in accordance with their respective terms.
GreenRock Business Combination
On December 30, 2023, we entered into the GreenRock Business Combination Agreement with GreenRock, Pubco and the Merger Subs, which was amended on November 6, 2024. Pursuant to the GreenRock Business Combination Agreement, subject to the terms and conditions set forth therein, (i) SPAC Merger Sub will merge with and into our Company, with our Company continuing as the surviving entity and wholly-owned subsidiary of Pubco, in connection with which all of our existing securities will be exchanged for rights to receive securities of Pubco as follows: (a) immediately prior to the SPAC Merger Effective Time (as defined in the GreenRock Business Combination Agreement), every issued and outstanding Unit will be automatically separated and the holders thereof will be deemed to hold one (1) Class A Ordinary Share, one-half (1/2) of a Public Warrant and one Right, (b) each Class A Ordinary Share outstanding immediately prior to the Effective Time that has not been redeemed and is not a Dissenting Share (as defined in the GreenRock Business Combination Agreement) shall automatically convert into one Pubco Ordinary Share (as defined in the GreenRock Business Combination Agreement), par value $0.0001, issued by Pubco, (c) each Class B Ordinary Share, par value $0.0001, outstanding immediately prior to the SPAC Merger Effective Time that is not a Dissenting Share shall automatically convert into one Pubco Ordinary Share, (d) each Public Warrant and each Private Placement Warrant shall automatically convert into one warrant to purchase Pubco Ordinary Shares on substantially the same terms and conditions; (e) each Right will be automatically converted into the number of Pubco Ordinary Shares that would have been received by the holder of such Right if it had been converted upon the consummation of a Business Combination in accordance with the Amended and Articles, and (ii) Company Merger Sub will merge with and into GreenRock, with GreenRock continuing as the surviving entity and wholly-owned subsidiary of Pubco, pursuant to which (x) each GreenRock Ordinary Share )(as defined in the GreenRock Business Combination Agreement) issued and outstanding immediately prior to the Time (as defined in the GreenRock Business Combination Agreement ) shall be automatically and extinguished and converted into the right to receive the applicable portion of Pubco Ordinary Shares constituting the Merger Consideration (as defined in the GreenRock Business Combination Agreement) and (y) each issued and outstanding GreenRock convertible security shall be converted into Pubco convertible securities of like tenor and shall have, and be subject to, substantially the same terms and conditions as set forth in the applicable organizational document of GreenRock, except that they shall represent the right to acquire Pubco Ordinary Shares in lieu of GreenRock Ordinary Shares.
For a full description of the GreenRock Business Combination Agreement and the proposed GreenRock Business Combination, please see “Item 1. Business”.
Results of Operations
Our entire activity since inception up to December 31, 2024 has been related to our formation and our Initial Public Offering, and we will not generate any operating revenues until the closing and completion of our initial Business Combination, at the earliest. We generate nonoperating income in the form of interest income from the proceeds derived from the Initial Public Offering. We also expect to continue to incur increased expenses as a result of becoming a public company (i.e., for legal, financial reporting, accounting and auditing compliance, among other things), as well as for due diligence expenses in search for a target to consummate an initial Business Combination.
For the year ended December 31, 2024, we reported net loss of $(390,001), comprised of $1,445,114 of dividend income earned in the Trust Account and $167 of interest income offset by formation and operating costs of $1,715,282.
For the year ended December 31, 2023, we reported a net income of $483,430, comprised of $2,134,446 of dividend income earned in the Trust Account offset by formation and operating costs of $1,528,302.
Factors That May Adversely Affect our Results of Operations
Our results of operations and our ability to complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our results of operations and our ability to consummate an initial Business Combination could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. We cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial Business Combination.
Liquidity, Capital Reserves and Going Concern
On May 2, 2022, we consummated our Initial Public Offering of 7,875,000 Units, including 375,000 Option Units that were issued pursuant to the partial exercise of the Over-Allotment Option. Simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreement, we sold 3,762,500 Private Placement Warrants, including 112,500 Private Placement Warrants that were issued pursuant to the partial exercise of the Over-Allotment Option. From the proceeds of the Initial Public Offering and Private Placement Warrants, we retained approximately $1,100,000 for working capital needs after transfer of proceeds to the Trust Account and payment of expenses related to the Initial Public Offering and directors’ and officers’ insurance. As of December 31, 2024 and December 31, 2023, there was $14,384 and $57,290 in cash held outside the Trust Account, respectively.
Working Capital Loans
In order to finance transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us Working Capital Loans as may be required. If we complete an initial Business Combination, we would repay such Working Capital Loans. In the event that the initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such Working Capital Loans, but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants at a price of $1.00 per warrant (which, for example, would result in the holders being issued warrants to purchase 1,500,000 shares if $1,500,000 of Working Capital Loans were so converted), at the option of the lender. Such warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. The terms of such Working Capital Loans by our Sponsor or its affiliates, or our officers and directors, if any, have not been determined and no written agreements exist with respect to such Working Capital Loans. We do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.
Eternal Loans
We agreed to borrow up to $500,000 from Eternal, an affiliate of our Company through common ownership, to be used for the payment of costs related to the Initial Public Offering. Eternal loaned us $63,073 under the First Eternal Loan. Pursuant to the loan agreement and its subsequent amendments, the First Eternal Loan was non-interest bearing, unsecured and due on the closing of our Initial Public Offering. The First Eternal Loan was fully repaid on June 2, 2022.
On September 21, 2022, we entered into a loan agreement with Eternal in the principal amount of up to $180,000, on an unsecured basis and bearing no interest. The Second Eternal Loan was available to be drawn down from September 21, 2022 to March 31, 2023 and its maturity date is June 30, 2025, or if earlier, the date of the consummation of the initial Business Combination, as amended by the Second Eternal Loan Amendment. As of December 31, 2024 and December 31, 2023, the outstanding balance of the Second Eternal Loan was $170,603 and no interest was accrued.
Additionally, on November 12, 2022, we entered into a loan agreement with Eternal in the principal amount of up to $300,000, on an unsecured basis and bearing no interest. The Third Eternal Loan was available to be drawn down from November 12, 2022 to March 31, 2023. The maturity date is June 30, 2025 or, if earlier, the date of the consummation of the initial Business Combination, as amended by the Third Eternal Loan Amendment. As of December 31, 2024 and December 31, 2023, the outstanding balance of the Third Eternal Loan was $300,000 and no interest was accrued.
On January 29, 2023, we entered into a loan agreement with Eternal in the principal amount of up to $50,000, on an unsecured basis and bearing no interest. The Fourth Eternal Loan was available to be drawn down from January 29, 2023 to March 31, 2023 and its maturity date is the earlier of June 30, 2025 or the date of the consummation of the initial Business Combination, as amended by the Fourth Eternal Loan Amendment. As of December 31, 2024 and December 31, 2023, the outstanding balance of the Fourth Eternal Loan was $50,000 and no interest was accrued.
On April 12, 2023, we entered into a loan agreement with Eternal for a loan facility in the principal amount of up to $500,000, on an unsecured basis and bearing no interest. The Fifth Eternal Loan was available to be drawn down in four installments: $150,000 on April 12, 2023, $125,000 on May 3, 2023,$125,000 on June 3, 2023, and $100,000 on July 3, 2023. The maturity date is June 30, 2025 or if earlier, the date of the consummation of the initial Business Combination, as amended by the Fifth Eternal Loan Amendment. As of December 31, 2024 and December 31, 2023, we borrowed an additional $0 and $153,619, respectively, beyond the initial terms of the Fifth Eternal Loan. As of December 31, 2024 and December 31, 2023, the outstanding balance of the Fifth Eternal Loan was $500,000 and $653,619, respectively, and no interest was accrued.
On November 1, 2023, we entered into a loan agreement with Eternal in the principal amount of up to $335,000 on an unsecured basis and bearing no interest. The Sixth Eternal Loan was available to be drawn down from November 1, 2023. The maturity date is June 30, 2025, or if earlier, the date of the consummation of the initial Business Combination, as amended by the Sixth Eternal Loan Amendment. In the event we do not repay the Sixth Eternal Loan within 10 days of the consummation of the initial Business Combination, we will pay an interest of five percent (5%) per month to Eternal until the date of repayment of the Sixth Eternal Loan. As of December 31, 2024 and December 31, 2023, we borrowed an additional $0 and $22,302, respectively, beyond the initial terms of the Sixth Eternal Loan. As of December 31, 2024, and December 31, 2023, the outstanding balance of the Sixth Eternal Loan was $335,000 and $357,302, respectively, and no interest was accrued.
On November 1, 2023, we and Eternal agreed to the Eternal Loan Amendment requiring that in the event that we do not repay each of the Second Eternal Loan, Third Eternal Loan, Fourth Eternal Loan, and Fifth Eternal Loan within 10 days of the consummation of the initial Business Combination, we will pay an interest of five percent (5%) per month to Eternal until the date of repayment of each such loan. The maturity date for each of these loans was extended to June 30, 2025, or if earlier, the date of the consummation of the initial Business Combination, as amended by the Eternal Loan Amendment.
On August 5, 2024, we entered into a loan agreement with Eternal for a loan facility in the principal amount of up to $1,500,000, on an unsecured basis and bearing no interest. The Seventh Eternal Loan is available for drawdown in unlimited number of installments in the period from August 3, 2024 to June 30, 2025. The final repayment date is June 30, 2025 or, if earlier, the date of the consummation of the initial Business Combination. As of December 31, 2024, we borrowed an additional $218,460 beyond the initial terms of the Seventh Eternal Loan. As of December 31, 2024, the outstanding balance of the Seventh Eternal Loan was $1,718,460, and no interest was accrued.
Eternal is controlled by Charles Ratelband V, our Executive Chairman of the Board of Directors. Each member of our Board of Directors has been informed of Mr. Ratelband’s material interest in such loan agreements, and upon the approval and recommendation of our Audit Committee, our Board of Directors has determined that the above loans with Eternal are fair and in our best interests and has voted to approve such loans.
Gluon Loan
On November 1, 2024, we entered into a loan agreement with Gluon to advance the sum of $20,000 to assist with short term cash demands. We agreed to repay the principal amount of $20,000, plus $1 interest, on or before February 28, 2025. The repayment deadline was subsequently extended to August 31, 2025. As of December 31, 2024, the balance was $0.
Convertible Promissory Notes
On May 2, 2023, we issued the 2023 Extension Note in the aggregate principal amount of $900,000 to the Sponsor, which was deposited into the Trust Account in monthly installments for the benefit of each Public Share that was not redeemed in connection with the 2023 Extension. The Sponsor agreed to pay $75,000 per month until the completion of an initial Business Combination, commencing on May 2, 2023 and continuing through May 2, 2024 (or such earlier date as determined by our Board of Directors in its sole discretion). The 2023 Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of the initial Business Combination, and (b) the date of our liquidation. Per the 2023 Extension Note, as amended, if we do not repay the 2023 Extension Note within five days of the maturity date, five percent (5%) interest per month will accrue on the unpaid principal balance until the 2023 Extension Note is fully repaid. At any time prior to the payment in full of the principal balance of the convertible promissory note, the Sponsor may elect to convert all or any portion of the unpaid principal balance into that number of Conversion Warrants at a conversion price of $1.00 per Conversion Warrant. The Conversion Warrants shall be identical to the Private Placement Warrants issued by us at the Initial Public Offering. We have determined that the fair value of the 2023 Extension Note is par value. As of December 31, 2024 and December 31, 2023, the outstanding balance of the 2023 Extension Note was $900,000 and $600,000, respectively, and no interest was accrued.
On April 30, 2024, we issued the 2024 Extension Note in the aggregate principal amount of $600,000 to the Sponsor, which was deposited into the Trust Account in monthly installments for the benefit of each Public Share that was not redeemed in connection with the 2024 Extension. The Sponsor agreed to pay $50,000 per month that the Board of Directors decides to take to complete an initial Business Combination, commencing on May 2, 2024 and continuing through May 2, 2025 (or such earlier date as determined by our Board of Directors in its sole discretion). The 2024 Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of the initial Business Combination, and (b) the date of our liquidation. At any time prior to the payment in full of the principal balance of the convertible promissory note, the Sponsor may elect to convert all or any portion of the unpaid principal balance into that number of Conversion Warrants at a conversion price of $1.00 per Conversion Warrant. The Conversion Warrants shall be identical to the Private Placement Warrants issued by us at the Initial Public Offering. We have determined that the fair value of the 2024 Extension Note is par value. As of December 31, 2024, the outstanding balance of the 2024 Extension Note was $400,000, and no interest was accrued.
On June 20, 2025, we issued the 2025 Extension Note in the aggregate principal amount of $107,623.44 to the Sponsor, which will be deposited into the Trust Account in monthly installments for the benefit of each Public Share that was not redeemed in connection with the 2025 Extension. The 2025 Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of the initial Business Combination, and (b) the date of our liquidation.
Going Concern
As of December 31, 2024, we had a cash balance of $14,384 and a working capital deficit of $5,753,598. We have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. These conditions raise substantial doubt about our ability to continue as a going concern one year from the issuance date of the audited consolidated financial statements contained elsewhere in this Report. Prior to consummation of a Business Combination, we have the ability to secure additional funding from the Sponsor or other related parties. There is no assurance that our plans to consummate a Business Combination will be successful by May 2, 2025. The audited consolidated financial statements contained elsewhere in this Report do not include any adjustment that might result from the outcome of this uncertainty.
Contractual Obligations
Registration Rights
Pursuant to the Registration Rights Agreement, the holders of the Founder Shares and the Private Placement Warrants (and their underlying securities) are entitled to registration rights. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. We will bear the expenses incurred in connection with the filing of any registration statements pursuant to such registration rights.
Underwriting Agreement
Pursuant to the Underwriting Agreement, the underwriters of the Initial Public Offering received a cash underwriting discount of $1,181,250 following the consummation of the Initial Public Offering. The underwriters are also entitled to a deferred commission of $2,362,500, which will be payable solely in the event that we complete an initial Business Combination. In addition, the underwriters also received 118,125 Units in the Initial Public Offering, with such units restricted from sale until the closing of the initial Business Combination and with no redemption rights from the Trust Account.
Additionally, we granted the underwriters of the Initial Public Offering for a period beginning on the closing of the Initial Public Offering and ending on the earlier of the 12 month anniversary of the closing of an initial Business Combination or April 27, 2025, a right of first refusal to act as (i) exclusive financial advisor in connection with our proposed Business Combinations for a fee of up to 6.0% of the proceeds of the Initial Public Offering (subject to our right to allocate up to 50% of such fee to another financial institution or extinguish such amount in our sole discretion), and (ii) sole investment banker, sole book-runner and/or sole placement agent, at the underwriters’ sole discretion, for each and every future public and private equity and debt Initial Public Offering, including all equity linked financings, during such period for us or any successor to us or any of our subsidiaries, on terms agreed to by both us and underwriters in good faith.
Transaction Expenses
On May 31, 2022, we entered into an agreement (the “EGS Agreement”) with Ellenoff, Grossman & Schole LLP (“EGS”) to (x) act as U.S. securities council to us in connection with pending acquisition targets for us to acquire consistent with our Initial Public Offering and (y) assist in U.S. securities work related to the initial Business Combination. The fee structure for this agreement is as follows: (i) an upfront retainer of $37,500, (ii) billing on an hourly basis for time, (iii) each month fifty percent (50%) of the amount billed shall be due and owing, (iv) the remaining fifty percent (50%) not paid, on a monthly basis, will be deferred until the closing of the initial Business Combination and will be paid with a twenty percent (20%) premium. As of December 31, 2024, and December 31, 2023, the total outstanding billed amount for services provided by EGS is $932,285 and $892,784 of which $466,143 and $446,392 (50% of the outstanding balance), respectively, is considered outstanding per the terms of the EGS Agreement and is included in accrued liabilities on the consolidated balance sheet of the audited consolidated financial statements contained elsewhere in this Report. As the initial Business Combination cannot be deemed probable as of December 31, 2024 and December 31, 2023, respectively, and payment of the deferred portion of the outstanding balance is contingent upon a successful initial Business Combination, no amount was accrued for the deferred portion of the outstanding amount or the premium.
On August 17, 2022, we entered into an agreement (as amended, the “Maxim Letter Agreement”) with Maxim to pay a fee (the “Maxim Success Fee”) upon completion of one or more successful transactions. On October 3, 2022, we amended the Maxim Letter Agreement to state that we will pay to Maxim, upon closing of such successful transaction(s), a fee based upon the amount of cash we have in the Trust Account immediately prior to consummation of the transaction and/or contributed to the transaction. If the amount of such cash is less than $50,000,000, Maxim’s fee will be equal to $200,000 in cash and an additional $150,000 of common stock of the post-transaction Company (the “New Common Stock”). If the amount of such cash is equal to or greater than $40 million, the Maxim Success Fee will be $500,000 cash. If the amount of such cash is equal to or greater than $75 million, the Maxim Success Fee will be $500,000 cash and an additional $500,000 payable in either cash or New Common Stock, at our option. The New Common Stock will be issued to Maxim Partners LLC, will be valued at the same price per share/exchange ratio as in the definitive transaction documentation, and it will have unlimited piggyback registration rights. The Maxim Fee will be paid upon the consummation of the transaction.
On July 11, 2022, we entered into a letter agreement with ALANTRA Corporate Finance, S.A.U. (“ALANTRA”) and U.N. SDG Support Holdings LLC (“Sponsor Entity”), under which we engaged ALANTRA to act as our financial advisor for the design, negotiation, and execution of potential Business Combinations between us and one or more energy transition companies. On October 3, 2022, we amended such letter agreement (the “ALANTRA Letter Agreement”).
Under the ALANTRA Letter Agreement, we agreed to pay ALANTRA a retainer of $15,000 at the signing of the ALANTRA Letter Agreement plus a retainer fee of $20,000 per month that is due and payable on the last day of each month for a maximum period of five months. Should the aggregated value of the transaction be above $400,000,000, the retainer fee will increase up to $40,000 per month with the same maximum five-month period for the payment of any retainer fee.
If a transaction that is introduced by ALANTRA or by another institution to which no fees are due by us (e.g. an institution acting on behalf of a target) is completed the following remuneration will be due to ALANTRA as a remuneration for its services (“ALANTRA Success Fee”).
$1,600,000 payable by us; and
$1,600,000 payable by or on behalf of the Sponsor Entity
If a transaction is completed in North America, Asia, or Africa that is not introduced by ALANTRA and such transaction requires an introductory, advisory, or similar fee due by us, we shall pay ALANTRA an ALANTRA Success Fee in the form of:
For the first $300,000,000 of aggregated value of the transaction, 0.85% of each transaction purchase price; and
For the aggregated value of the transaction above the first $300,000,000, 0.4% of each transaction purchase price
Notwithstanding the above, it is agreed that the ALANTRA Success Fee will be subject to a minimum of EUR 1,000,000.
Each ALANTRA Success Fee shall be payable upon consummation of the applicable transaction (i.e. when the transaction is closed, following fulfillment, if applicable, of conditions precedent) regardless of (i) the calendar for the payment of the price, (ii) how the purchase price is funded, (iii) and any deferred payment subsequent to consummation of the transaction, or (iv) any adjustment to the price of the transaction subsequent to consummation.
On January 4, 2024, we entered into an agreement (the “MZHCI Agreement”) with MZHCI, LLC (“MZHCI”), pursuant to which MZHCI acts as consultant and adviser, to counsel, and inform our designated officers and employees as it relates to pre & post IPO, Business Combination readiness assessment, post transaction close preparation advisory, overall capital markets climate related to global macroeconomic conditions, world-leading exchanges, our competitors, related Business Combinations in the relevant market segments, and other aspects of/or concerning our business about which MZHCI has knowledge or expertise. The MZHCI Agreement became effective upon execution and was active for a period of six months, with automatic renewals every six months thereafter. Prior to our Business Combination, we pay MZHCI $12,000 per month and subsequent to the Business Combination, we shall pay MZHCI $15,000 per month. At the successful close of the initial Business Combination, we will issue MZHCI $120,000 worth of our restricted securities, valued at the closing price on the first day of trading after the successful close of the initial Business Combination.
Administrative Services Agreement
We entered into the Administrative Services Agreement with the Sponsor on April 27, 2022, pursuant to which the Sponsor performed certain services for us for a monthly fee of $10,000. On May 2, 2022, the Sponsor entered into an assignment agreement with Gluon Group, an affiliate of our Company, to provide the services detailed in the Administrative Service Agreement. Per Regnarsson, our Chief Executive Officer and a director, is the Managing Partner of Gluon. As of December 31, 2024 and December 31, 2023, $39,187 and $39,187 has been paid to Gluon Group for such services and an additional $304,941 and $184,941, respectively, has been accrued.
Advisory Services
On September 21, 2022, we entered into the Gluon Letter Agreement with Gluon to pay the Gluon Transaction Success Fee upon completion of one or more successful transactions. We will pay Gluon $500,000 upon completion of one or more transactions with an aggregate purchase price of less than $400,000,000; and, an additional $500,000 upon completion of one or more transactions with an aggregate purchase price of more than $400,000,000. This means the total remuneration for transactions with a purchase price more than $400,000,001 would be $1,000,000. The transaction purchase price will correspond to the price paid to the sellers of the applicable target, including cash, debt, and equity funded payments. Each Gluon Transaction Success Fee will be payable upon consummation of the applicable transaction, regardless of (i) the calendar for the payment of the purchase price, (ii) how the purchase price is funded, (iii) any deferred payment subsequent to consummation of the transaction, or (iv) any adjustments to the price of the transaction subsequent to consummation. Following payment of the Gluon Transaction Success Fee, any accrued fees payable to the Gluon Group by us will be waived.
On October 5, 2022, we agreed with Gluon to lower the Gluon Transaction Success Fee to a total payment of $250,000 upon successful completion of one of more transactions with an aggregate purchase price equal or more than $400,000,000.
In addition, the Gluon Letter Agreement was amended to entitle Gluon, with respect to any financing undertaken by our Company introduced by Gluon during the term of the Gluon Letter Agreement, to the following fees: (i) for a financing involving an issuance of our senior, subordinated and/or mezzanine debt securities, a cash fee payable at any closing equal to two percent (2.0%) of the gross proceeds received by our Company at such closing; (ii) for a financing involving equity, equity-linked or convertible securities, a cash fee payable at each closing equal to five percent (5.0%) of the gross proceeds received by our Company at such closing.
In addition to the Gluon Transaction Success Fee, we agreed to pay Gluon Group for any reasonable and documented out-of-pocket expenses incurred in connection with providing the services for the transactions. In the event of a successful initial Business Combination, Gluon also agreed to waive any accrued fees we owed.
Per Regnarsson, the Chief Executive Officer and a director of our Company, is the Managing Partner of Gluon. Each member of our Board of Directors has been informed of Mr. Regnarsson’s material interest in the Gluon Letter Agreement, and upon the approval and recommendation of our Audit Committee, our Board of Directors determined that the Gluon Letter Agreement is fair and in our best interests and voted to approve the Gluon Letter Agreement.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. Our critical accounting policies are discussed in Note 2, “Summary of Significant Accounting Policies”, of the audited consolidated financial statements contained elsewhere in this Report.
