8-K: ClimateRock Faces Nasdaq Delisting After Business Combination Deadline Miss

ClimateRock's securities are set to be delisted from Nasdaq after failing to meet the deadline for its initial business combination, but the company intends to pursue the GreenRock Corp deal and listing of the combined entity.

Summary

• ClimateRock received a delisting notice from Nasdaq after failing to complete its initial business combination by the April 7, 2025 deadline.
• Trading of ClimateRock's securities will be suspended on Nasdaq starting April 10, 2025.
• The securities will then be eligible to trade on the OTC Markets under the tickers CLRCUF, CLRCF, CLRCWF, and CLRCRF.
• ClimateRock still intends to pursue its business combination with GreenRock Corp and ClimateRock Holdings Limited, aiming to list the combined entity (Holdings) on Nasdaq.
• The company does not expect the delisting to impact the conversion of its securities into Holdings' securities upon closing of the business combination.
• Upon closing, Holdings expects to have its ordinary shares listed on Nasdaq under the symbol CLRC and its warrants under CLRCW.
• Michael Geary was appointed as Interim Chief Financial Officer of ClimateRock, effective immediately on April 13, 2025.
• Gluon Renewable Energies Ltd provides consulting and other support services to the company for a monthly fee of $10,000.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the delisting from Nasdaq, indicating a setback for the company. However, the intention to continue pursuing the business combination provides a slight offset.

Positives

• ClimateRock intends to continue pursuing its business combination with GreenRock Corp despite the delisting.
• The company expects that Holdings will have one class of ordinary shares which will be listed on Nasdaq under the symbol CLRC, and its warrants will be listed on Nasdaq under the symbol CLRCW.
• Michael Geary's extensive experience in finance and renewable energy could benefit ClimateRock during this transition.

Negatives

• ClimateRock's securities will be delisted from Nasdaq due to failure to meet the business combination deadline.
• Trading of ClimateRock's securities will be suspended on Nasdaq starting April 10, 2025.
• The company notified the Panel that it would not be able to close its initial business combination by the Panel's April 7, 2025 deadline.

Risks

• The business combination may not be completed in a timely manner or at all.
• ClimateRock may fail to obtain a further extension of the business combination deadline.
• The company may fail to satisfy the ClimateRock's public shareholders, and to receive certain governmental and regulatory approvals.
• The announcement or pendency of the Business Combination could negatively impact GreenRock's business relationships and performance.
• Holdings may face challenges in satisfying Nasdaq Stock Exchange listing standards.
• GreenRock (and following the Business Combination, Holdings) will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all.

Future Outlook

ClimateRock intends to continue pursuing the business combination with GreenRock Corp and ClimateRock Holdings Limited, aiming to list the combined entity (Holdings) on Nasdaq. Upon closing, Holdings expects to have its ordinary shares listed on Nasdaq under the symbol CLRC and its warrants under CLRCW.

Management Comments

• Notwithstanding the delisting of the Company's securities from Nasdaq, it remains the intention of the Company to continue to pursue the business combination with GreenRock Corp and ClimateRock Holdings Limited, as well as the listing of Holdings on Nasdaq.
• The Company does not expect the de-listing of the Company's securities to have any impact on the conversion of the Company's ordinary shares, rights and warrants to securities of Holdings in connection with the closing of the business combination as specified in the registration statement on Form F-4 filed by Holdings.

Industry Context

The SPAC market has faced increased scrutiny and challenges in completing business combinations, leading to delistings and liquidations. This announcement reflects the difficulties some SPACs face in meeting deadlines and regulatory requirements.

Comparison to Industry Standards

• Many SPACs, such as Kensington Capital Acquisition Corp. V, have faced similar challenges in completing mergers within the required timeframe, leading to delisting warnings or liquidations.
• The performance of SPACs post-merger has been mixed, with many companies struggling to maintain their stock prices and meet financial projections, as seen with companies like Canoo and Lordstown Motors.
• Compared to traditional IPOs, SPACs often face greater volatility and regulatory scrutiny, impacting their ability to attract investors and achieve long-term success.

Management Changes

Related Party Transactions

• Gluon Renewable Energies Ltd provides consulting and other support services to the company for a monthly fee of $10,000.
• Gluon is entitled to receive a transaction success fee of up to $250,000 if the Company consummates a business combination.
• Gluon is entitled to receive (i) for a financing involving an issuance of the Company's senior, subordinated and/or mezzanine debt securities, a cash fee payable at any closing equal to 2.0% of the gross proceeds received by the Company at such closing and (ii) for a financing involving equity, equity-linked or convertible securities, a cash fee payable at each closing equal to 5.0% of the gross proceeds received by the Company at such closing.

Stakeholder Impact

• Shareholders will be impacted by the delisting from Nasdaq and the transition to the OTC Markets.
• The company's ability to complete the business combination will affect shareholder value.
• Employees may experience uncertainty during this transition period.
• The success of the business combination will impact the future prospects of the company and its stakeholders.

Next Steps

• ClimateRock will transition trading of its securities to the OTC Markets.
• The company will continue to pursue the business combination with GreenRock Corp and ClimateRock Holdings Limited.
• Holdings will seek to list its ordinary shares and warrants on Nasdaq upon closing of the business combination.
• ClimateRock's shareholders are urged to read the registration statement, proxy statement/prospectus and all other relevant documents that are filed with the SEC in connection with the proposed transaction.

Key Dates

Keywords

delisting, business combination, ClimateRock, GreenRock, Nasdaq, Michael Geary, CFO, OTC Markets, securities, Holdings