DEF: ClimateRock Seeks Fourth Extension for GreenRock Merger

ClimateRock is asking shareholders to approve a fourth extension to complete its GreenRock business combination, pushing the deadline from November 2, 2025, to May 2, 2026.

Summary

• ClimateRock (a SPAC) is seeking shareholder approval for a fourth extension of its business combination deadline from November 2, 2025, to May 2, 2026.
• The extension is critical to allow additional time to complete the proposed merger with GreenRock Corp.
• Shareholders will vote on two proposals: the Fourth Extension Amendment Proposal and an Adjournment Proposal (if necessary).
• Public Shareholders have redemption rights at an estimated $12.43 per share (as of October 7, 2025), which is higher than the Class A Ordinary Shares' closing price of $12.10 on the OTC Pink Limited tier as of October 8, 2025.
• The company's securities were delisted from Nasdaq on April 10, 2025, and now trade on the less liquid Pink Limited tier of the OTC Markets Group Inc.
• The Sponsor and management collectively own approximately 77.65% of the outstanding Ordinary Shares and intend to vote in favor of the proposals.

Sentiment

Score: 3

Explanation: The company is seeking its fourth extension, has been delisted from Nasdaq, and faces significant redemption risks. Management has strong incentives to complete a deal, potentially at terms less favorable to public shareholders. While the redemption price is slightly above market, the overall situation points to distress and repeated failures to execute.

Positives

• The Board unanimously recommends voting FOR the extension, believing it is in shareholders' best interest to complete the GreenRock Business Combination, which is expected to provide significant benefits.
• The extension provides additional time until May 2, 2026, to finalize the GreenRock Business Combination, preventing immediate liquidation.
• Public Shareholders have the option to redeem their shares at approximately $12.43 per share, which is currently $0.33 higher than the market price of $12.10 (as of October 8, 2025).
• The Sponsor has agreed to indemnify the company against certain third-party claims that could reduce the Trust Account below $10.15 per Public Share, with specified exceptions.

Negatives

• This is the fourth extension sought by ClimateRock, indicating repeated delays in completing a business combination since its IPO on May 2, 2022.
• The company's securities were delisted from Nasdaq on April 10, 2025, due to failure to meet listing requirements, resulting in trading on the less liquid Pink Limited tier of the OTC.
• If the extension is not approved, ClimateRock will be forced to liquidate, and its Warrants and Rights will expire worthless.
• Management and the Sponsor have significant economic incentives (Founder Shares valued at approximately $23.82 million, Private Placement Warrants purchased for $3,762,500, transaction fees, and loan repayments) to complete a business combination, which may create a conflict of interest with public shareholders.
• Approximately $2 million in out-of-pocket expenses incurred by the Sponsor, officers, and directors may not be reimbursed if a business combination is not completed.
• Eternal BV, a company controlled by Executive Chairman Charles Ratelband V, has provided approximately $3,124,063 million in unsecured, non-interest-bearing loans, which may not be repaid if a business combination is not completed.
• The Sponsor holds Prior Extension Promissory Notes totaling up to $1,607,623 ($1,417,937 million outstanding as of September 30, 2025), which are unlikely to be repaid if the GreenRock Business Combination is not consummated.
• The Sponsor, officers, and directors collectively own approximately 77.65% of outstanding Ordinary Shares, allowing them to approve all proposals regardless of how other shareholders vote.
• The company may be deemed a foreign person under CFIUS regulations, potentially limiting the pool of target companies or delaying/blocking transactions.
• The 1% U.S. federal excise tax on stock repurchases could apply if the company domesticates and redeems shares, potentially reducing cash available to shareholders.

Risks

• There are no assurances that the Fourth Extension will enable the company to complete a Business Combination.
• Redemptions by Public Shareholders could leave the company with insufficient cash to consummate a Business Combination on commercially acceptable terms, or at all.
• The price of Public Shares may be volatile, and there is no assurance Public Shareholders will be able to dispose of their shares at favorable prices, or at all, due to limited liquidity on the OTC.
• The Sponsor, officers, and directors own a substantial number of Ordinary Shares (77.65%) and can approve all proposals, regardless of how other shareholders vote, potentially creating conflicts of interest.
• A 1% U.S. federal excise tax may be imposed on redemptions of Ordinary Shares if the company domesticates, which could reduce the amount of cash available.
• Changes in laws or regulations, or a failure to comply with them, may adversely affect the company's business, including its ability to negotiate and complete an initial Business Combination.
• There is a risk of being deemed an investment company under the Investment Company Act, which would impose burdensome compliance requirements and restrict activities, potentially hindering a Business Combination or leading to liquidation.
• If the company is unable to complete its initial Business Combination, Public Shareholders may receive only approximately $12.43 per Public Share upon liquidation, and Warrants and Rights will expire worthless.
• The company may be deemed a foreign person under CFIUS regulations, and failure to obtain required approvals within the requisite time period may require it to liquidate.
• Delisting from Nasdaq to the Pink Limited tier of the OTC could have a material adverse effect on the trading of the company's securities and may adversely affect its ability to consummate an initial Business Combination.

Future Outlook

ClimateRock intends to complete the GreenRock Business Combination as soon as possible, and in any event, on or before the Fourth Extended Date (May 2, 2026), if the Fourth Extension Amendment Proposal is approved. The Board will have the flexibility to liquidate the Trust Account at any time before or after the current Termination Date and prior to the end of the Combination Period. The company does not currently anticipate seeking further extensions beyond the Fourth Extension.

Management Comments

• "The Board believes that there will not be sufficient time before the Termination Date to complete the GreenRock Business Combination."
• "Without the Fourth Extension, the Board believes that there is significant risk that the Company might not, despite its best efforts, be able to complete the GreenRock Business Combination or another initial Business Combination on or before the Termination Date."
• "The Board has determined that it is in the best interests of ClimateRock's shareholders to extend the date... in order for its shareholders to have the opportunity to participate in its future investment, as well as to provide additional flexibility to wind up our operations prior to the end of the Combination Period."
• "The Board believes the GreenRock Business Combination will provide significant benefits to our shareholders."
• "Our Board recommends that you vote in favor of the Fourth Extension Amendment Proposal, but expresses no opinion as to whether you should redeem your Public Shares in the Fourth Extension Redemptions."

Industry Context

The filing highlights ongoing challenges faced by Special Purpose Acquisition Companies (SPACs) in completing business combinations within initial deadlines, often requiring multiple extensions and leading to significant shareholder redemptions. ClimateRock's repeated extensions and Nasdaq delisting reflect a broader trend of increased regulatory scrutiny (e.g., 2024 SEC SPAC Rules) and market skepticism towards SPACs, making it harder for them to find suitable targets and maintain investor confidence. The potential application of the U.S. federal excise tax on redemptions further complicates the SPAC model.

Comparison to Industry Standards

• The company's need for a fourth extension and its delisting from Nasdaq to the less liquid OTC Pink Limited tier are significantly below industry standards for successful SPACs, which typically complete their mergers within the initial 18-24 month timeframe and maintain listing on major exchanges.
• High redemption rates in prior extensions (e.g., 5,297,862 shares in First Extension, 2,016,792 shares in Third Extension) indicate a lack of sustained investor confidence, contrasting with SPACs that successfully retain a substantial portion of their trust capital for their business combinations.
• The current redemption price of $12.43 per share, while higher than the OTC market price of $12.10, suggests that the market values the company's shares below the liquidation value, a common occurrence for SPACs facing liquidation risk but still indicative of poor market sentiment compared to successful SPACs trading at or above trust value.
• The significant ownership (77.65%) and voting power of the Sponsor and management, enabling them to approve proposals regardless of public shareholder votes, raises corporate governance concerns that deviate from best practices promoting broader shareholder democracy in SPACs.

Corporate Governance

Legal Proceedings

• The company is aware of litigation claiming that certain SPACs should be considered investment companies, and while it believes these claims are without merit, it cannot guarantee it will not be deemed an investment company subject to the Investment Company Act.

Related Party Transactions

• U.N. SDG Support LLC (the Sponsor), of which Charles Ratelband V is the managing member, owns 1,968,750 Ordinary Shares and 3,762,500 Private Placement Warrants.
• The Sponsor has provided contributions for prior extensions, resulting in Prior Extension Promissory Notes totaling up to $1,607,623 ($1,417,937 outstanding as of September 30, 2025).
• The Sponsor, officers, and directors may loan Working Capital Loans to the company, which can be repaid or converted into Working Capital Warrants.
• Eternal BV, a company controlled by Charles Ratelband V (Executive Chairman), has provided approximately $3,124,063 million in unsecured, non-interest-bearing loans (Eternal Loans) as of September 30, 2025.
• Gluon, whose Managing Partner is Per Regnarsson (CEO and Director), is entitled to a Transaction Success Fee of up to $250,000 and financing fees (2.0% for debt, 5.0% for equity) if a Business Combination is consummated.

Stakeholder Impact

• Shareholders (Public): Opportunity to vote on extension, right to redeem shares at approximately $12.43 (above market price of $12.10), but risk of Warrants and Rights expiring worthless if liquidation occurs. Risk of losing potential investment opportunity in GreenRock if no Business Combination. Reduced liquidity due to OTC listing.
• Shareholders (Sponsor/Insiders): Significant economic incentive to complete a Business Combination to avoid their Founder Shares (market value ~$23.82M) and Private Placement Warrants ($3.76M investment) becoming worthless. Their substantial voting power (77.65%) allows them to approve the extension.
• Creditors: If liquidation occurs, the company is subject to Cayman Islands law obligations to provide for claims of creditors. The Sponsor has agreed to indemnify the company against certain third-party claims reducing the Trust Account below $10.15 per Public Share.
• Management/Directors: Eligible for continued indemnification and D&O liability insurance post-Business Combination. Reimbursement of up to $2 million in out-of-pocket expenses is contingent on completing a Business Combination.
• GreenRock Corp: The proposed Business Combination partner, whose merger is contingent on ClimateRock securing this extension.

Next Steps

• Hold an Extraordinary General Meeting on October 29, 2025, to vote on the Fourth Extension Amendment Proposal and the Adjournment Proposal.
• If the Fourth Extension Amendment Proposal is approved, file the special resolutions with the Registrar of Companies of the Cayman Islands within fifteen days.
• Continue efforts to obtain shareholder approval for the GreenRock Business Combination at a separate GreenRock Business Combination Meeting.
• Complete the GreenRock Business Combination (or another initial Business Combination) on or before May 2, 2026 (the Fourth Extended Date).
• If the Fourth Extension Amendment Proposal is approved, the Board has the flexibility to liquidate the Trust Account and redeem all Public Shares at any time before or after November 2, 2025, and prior to May 2, 2026.
• If the Fourth Extension Amendment Proposal is not approved and a Business Combination is not completed by November 2, 2025, the company will cease operations, redeem Public Shares, and liquidate.
• Announce preliminary voting results at the Meeting and publish final results in a Current Report on Form 8-K within four business days.

Key Dates

Recommendation

The company is in a precarious position, seeking its fourth extension and having been delisted from Nasdaq. While the proposed extension is critical to avoid immediate liquidation and pursue the GreenRock Business Combination, the repeated delays and high redemption rates indicate significant execution risk and lack of sustained investor confidence. The current redemption price offers a slight premium over the OTC market price, providing a potential exit for public shareholders. However, the substantial insider ownership and their strong incentives to complete a deal, potentially on less favorable terms, create a conflict of interest. Given the high uncertainty, the delisting, and the history of redemptions, a 'hold' recommendation is appropriate for existing shareholders to monitor the outcome of the vote and the subsequent GreenRock Business Combination, while new investors should exercise extreme caution.

Keywords

SPAC, Business Combination, Extension, GreenRock, Proxy Statement, Redemption, SEC Filing, Corporate Governance, Shareholder Vote, Delisting, OTC Markets, Trust Account, CFIUS, Investment Company Act, Excise Tax