PART I - FINANCIAL INFORMATION This section presents ClimateRock's unaudited financial information, encompassing consolidated statements, management's discussion, and disclosures on market risk and controls Item 1. Consolidated Financial Statements This section presents ClimateRock's unaudited consolidated financial statements for the quarter ended June 30, 2024, including balance sheets, statements of operations, changes in shareholders' deficit, and cash flows, along with comprehensive notes detailing the company's organization, accounting policies, and financial instrument fair values Consolidated Balance Sheets This section provides a snapshot of ClimateRock's financial position, detailing assets, liabilities, and shareholders' deficit as of June 30, 2024, and December 31, 2023 | ASSETS/LIABILITIES (Unaudited) | June 30, 2024 | December 31, 2023 | | :----------------------------- | :------------ | :---------------- | | Current Assets | | | | Cash | $6,077 | $57,290 | | Prepaid expenses | $40,500 | $412 | | Total current assets | $46,577 | $57,702 | | Non-current Assets | | | | Cash in Trust Account | $28,376,781 | $28,508,214 | | Total non-current assets | $28,376,781 | $28,508,214 | | TOTAL ASSETS | $28,423,358 | $28,565,916 | | Current Liabilities | | | | Accrued liabilities | $1,052,978 | $959,720 | | Admin service fee payable | $244,941 | $184,941 | | Loan payable - related party | $2,689,785 | $1,481,524 | | Convertible note payable | $1,000,000 | $600,000 | | Total current liabilities | $4,987,704 | $3,226,185 | | Non-current Liabilities | | | | Deferred underwriting comm. | $2,362,500 | $2,362,500 | | Total non-current liabilities | $2,362,500 | $2,412,500 | | TOTAL LIABILITIES | $7,350,204 | $5,638,685 | | Shareholders' Deficit | | | | Accumulated deficit | $(7,303,836) | $(5,581,192) | | Total shareholders' deficit | $(7,303,627) | $(5,580,983) | Unaudited Consolidated Statements of Operations This section outlines ClimateRock's financial performance, presenting net loss/income, operating costs, and other income for the three and six months ended June 30, 2024 and 2023 | Operating Results (Unaudited) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Formation and operating costs | $592,646 | $409,375 | $1,262,807 | $786,000 | | Admin service fees | $30,000 | $30,000 | $60,000 | $60,000 | | Net loss from operations | $(622,646) | $(439,375) | $(1,322,807) | $(846,000) | | Interest income | $140 | $120 | $163 | $120 | | Dividend income (Trust Account)| $368,183 | $546,053 | $740,810 | $1,404,530 | | Total other income | $368,323 | $546,173 | $740,973 | $1,404,650 | | Net (loss) income | $(254,323) | $106,798 | $(581,834) | $558,650 | | Basic & diluted EPS (Redeemable)| $0.04 | $0.07 | $0.08 | $0.14 | | Basic & diluted EPS (Non-redeemable)| $(0.17) | $(0.10) | $(0.37) | $(0.12) | Unaudited Consolidated Statements of Changes in Shareholders' Deficit This section details the changes in ClimateRock's shareholders' deficit, reflecting the impact of net losses and share redemptions over the reporting periods - The company's total shareholders' deficit increased from $(5,580,983) at January 1, 2024, to $(7,303,627) at June 30, 2024, primarily due to net losses and adjustments for Class A ordinary shares subject to possible redemption1314 - For the six months ended June 30, 2024, the accumulated deficit increased by $1,722,644, compared to an increase of $995,880 for the same period in 2023131452 Unaudited Consolidated Statements of Cash Flows This section presents ClimateRock's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2024 and 2023 | Cash Flows (Unaudited) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--------------------- | :----------------------------- | :----------------------------- | | Net (loss) income | $(581,834) | $558,650 | | Net cash used in operating activities | $(1,209,474) | $(697,770) | | Net cash provided by investing activities | $872,243 | $55,115,334 | | Net cash provided by (used in) financing activities | $286,018 | $(54,674,731) | | Net decrease in cash | $(51,213) | $(257,167) | | Cash at end of period | $6,077 | $154,544 | - Cash and cash equivalents at the end of the period decreased significantly from $57,290 at the beginning of the period to $6,077 by June 30, 202416 Notes to the Unaudited Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the consolidated financial statements, covering accounting policies, related party transactions, and subsequent events NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS This note describes ClimateRock's formation as a blank check company, its business focus, and the going concern uncertainties it faces - ClimateRock is a Cayman Islands blank check company incorporated on December 6, 2021, focused on business combinations in climate change, environment, renewable energy, and clean technologies18 - As of June 30, 2024, the Company had not yet commenced operations, with all activities related to its formation, initial public offering, and search for a target business combination20 - The Company's ability to continue as a going concern is in substantial doubt due to a cash balance of $6,077 and a working capital deficit of $4,941,127 as of June 30, 2024, and the uncertainty of successfully completing a Business Combination by May 2, 202534 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines the accounting principles and policies used in preparing ClimateRock's financial statements, including GAAP conformity and emerging growth company status - The financial statements are prepared in conformity with GAAP for interim financial information and Article 10 of Regulation S-X35 - The Company is an 'emerging growth company' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards, which may affect comparability with other public companies4142 | Fair Value of Assets (Unaudited) | June 30, 2024 | December 31, 2023 | | :------------------------------- | :------------ | :---------------- | | Cash and cash equivalents held in Trust Account (Level 1) | $28,376,781 | $28,508,214 | NOTE 3. INITIAL PUBLIC OFFERING This note details the terms and proceeds of ClimateRock's Initial Public Offering, including unit composition and the reconciliation of IPO proceeds - On May 2, 2022, the Company consummated its Initial Public Offering of 7,875,000 Units at $10.00 per Unit, generating gross proceeds of $78,750,00062 - Each unit consists of one Class A ordinary share, one-half of one redeemable warrant, and one right, with each right entitling the holder to receive one-tenth of one ordinary share upon consummation of a Business Combination63 | IPO Proceeds Reconciliation | June 30, 2024 | December 31, 2023 | | :-------------------------- | :------------ | :---------------- | | Gross proceeds | $78,750,000 | $78,750,000 | | Less: Proceeds allocated to public warrants and rights | $(6,898,500) | $(6,898,500) | | Less: Offering costs of public shares | $(4,647,702) | $(4,647,702) | | Less: Redemption of shares | $(56,537,577) | $(55,265,334) | | Plus: Accretion of carrying value to redemption value | $16,710,560 | $15,969,750 | | Plus: Monthly extension fees| $1,000,000 | $600,000 | | Ordinary shares subject to possible redemption | $28,376,781 | $28,508,214 | NOTE 4. PRIVATE PLACEMENT This note describes the private placement of warrants, including the proceeds generated and the exercise terms of these warrants - On May 2, 2022, the Company sold 3,762,500 Private Placement Warrants at $1.00 per warrant, generating gross proceeds of $3,762,50067 - Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at $11.50 per share and will expire worthless if a Business Combination is not completed within the Combination Period67 NOTE 5. RELATED PARTY TRANSACTIONS This note details financial arrangements and agreements between ClimateRock and its related parties, including loans, convertible notes, and administrative/advisory service fees - The Sponsor converted 1,968,749 Class B ordinary shares to Class A ordinary shares on March 31, 2023, and now owns 1,968,749 Class A ordinary shares and one Class B ordinary share69 - The Company has multiple unsecured, non-interest-bearing loan agreements with Eternal B.V., an affiliate, totaling $2,689,785 outstanding as of June 30, 2024. These loans will accrue 5% interest per month if not repaid within 10 days of a Business Combination717273747576 - Convertible promissory notes (2023 and 2024 Extension Notes) totaling $1,000,000 outstanding as of June 30, 2024, were issued to the Sponsor to fund monthly installments into the Trust Account for public shares not redeemed7980 - The Company has an administrative services agreement with Gluon Group, an affiliate, for a monthly fee of $10,000, with $244,941 accrued as of June 30, 202481 - Advisory services are provided by Gluon Partners LLP, with a Transaction Success Fee of $250,000 upon successful completion of a transaction with an aggregate purchase price of $400,000,000 or more8284 NOTE 6. COMMITMENTS AND CONTINGENCIES This note outlines ClimateRock's contractual obligations, including deferred underwriting commissions and details regarding past and current business combination agreements - The Company has a deferred underwriting commission of $2,362,500 payable to Maxim Group LLC, contingent upon the completion of a Business Combination90 - The Business Combination Agreement with E.E.W. Eco Energy World PLC was terminated on November 29, 2023, due to unfulfilled closing conditions106 - On December 30, 2023, ClimateRock entered into a new Business Combination Agreement with GreenRock, Holdings, and Merger Sub, involving a merger where ClimateRock becomes a wholly-owned subsidiary of Holdings107 NOTE 7. SHAREHOLDERS' EQUITY This note provides details on ClimateRock's share capital, including the number of outstanding ordinary shares, and the terms governing warrants and rights - As of June 30, 2024, there were 2,086,874 Class A ordinary shares and one Class B ordinary share issued and outstanding. No preference shares were outstanding108109110 - Warrants become exercisable 30 days after a Business Combination or 12 months from the IPO closing, provided an effective registration statement is in place. They expire five years after a Business Combination or earlier upon redemption/liquidation112 - Each holder of a Right will automatically receive one-tenth (1/10) of one ordinary share upon consummation of a Business Combination, without additional consideration118 NOTE 8. SUBSEQUENT EVENTS This note discloses significant events that occurred after June 30, 2024, including amendments to loan agreements and the establishment of a new loan facility - Subsequent to June 30, 2024, the Company and Eternal B.V. amended several loan agreements (Second, Third, Fifth, and Sixth Eternal Loans) to extend their final repayment dates to March 31, 2025, or January 1, 2025, respectively, or earlier upon a business combination122124125126 - On August 5, 2024, the Company entered into a new Seventh Eternal Loan agreement with Eternal B.V. for up to $1,500,000, unsecured and non-interest-bearing, with a final repayment date of March 31, 2025123 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on ClimateRock's financial condition and operational results, highlighting its status as a blank check company seeking a business combination in climate-related industries. It details the company's financial performance, liquidity, related-party transactions, and the impact of recent regulatory changes on its operations Overview This overview introduces ClimateRock as a blank check company seeking a business combination in climate-related sectors and discusses the impact of new SEC regulations - ClimateRock is a blank check company focused on business combinations in environmental protection, renewable energy, and climate change, targeting companies with strong management, positive cash flows, and clear growth pathways131 - The Company has not yet commenced operations and will not generate operating revenues until the completion of its initial Business Combination, relying on interest income from its Trust Account132149 - The SEC's 2024 SPAC Rules, effective July 1, 2024, may materially affect the Company's ability to negotiate and complete its initial Business Combination and increase associated costs and time139 Business Combination with EEW This section details the termination of ClimateRock's initial business combination agreement with E.E.W. Eco Energy World PLC due to unfulfilled conditions - The Business Combination Agreement with E.E.W. Eco Energy World PLC, initially entered on October 6, 2022, and amended on August 3, 2023, was terminated on November 29, 2023, due to unfulfilled closing conditions141142 GreenRock Business Combination This section outlines ClimateRock's new merger agreement with GreenRock, Holdings, and Merger Sub, establishing a new structure for the business combination - On December 30, 2023, ClimateRock entered into the GreenRock Merger Agreement, under which ClimateRock will merge into SPAC Merger Sub, becoming a wholly-owned subsidiary of Pubco, and GreenRock will merge into Company Merger Sub, also becoming a wholly-owned subsidiary of Pubco143 Extensions of Our Business Combination Period This section details shareholder approvals for extending the business combination period, including associated share redemptions and funding mechanisms - On April 27, 2023, shareholders approved an extension of the Business Combination period to May 2, 2024, resulting in the redemption of 5,297,862 Class A ordinary shares for approximately $55.27 million145 - On April 29, 2024, shareholders approved a further extension to May 2, 2025, leading to the redemption of 111,915 ordinary shares for approximately $1.27 million146 - The Sponsor issued the 2023 Extension Note ($900,000) and 2024 Extension Note ($600,000) to fund monthly deposits into the Trust Account for the benefit of non-redeeming public shareholders145148 Results of Operations This section analyzes ClimateRock's financial performance, focusing on net loss/income, dividend income, and operating costs for the reported periods | Operating Results (Unaudited) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income | $(254,323) | $106,798 | $(581,834) | $558,650 | | Dividend income (Trust Account)| $368,183 | $546,053 | $740,810 | $1,404,530 | | Formation and operating costs | $592,646 | $409,375 | $1,262,807 | $786,000 | | Administrative service fees | $30,000 | $30,000 | $60,000 | $60,000 | - The Company reported a net loss of $254,323 for the three months ended June 30, 2024, compared to a net income of $106,798 for the same period in 2023, primarily due to increased formation and operating costs and decreased dividend income150151 Factors That May Adversely Affect our Results of Operations This section identifies various economic and market uncertainties that could negatively impact ClimateRock's financial results and its ability to complete a business combination - Results of operations and ability to complete a Business Combination may be adversely affected by economic uncertainty and volatility, including downturns in financial markets, inflation, interest rate increases, supply chain disruptions, and geopolitical instability152 Liquidity, Capital Reserves and Going Concern This section discusses ClimateRock's financial liquidity, capital resources, and the substantial doubt regarding its ability to continue as a going concern - As of June 30, 2024, the Company had a cash balance of $6,077 and a working capital deficit of $4,941,127, raising substantial doubt about its ability to continue as a going concern166 - The Company relies on related-party loans and convertible promissory notes from its Sponsor and affiliates to finance transaction costs and extend the Business Combination period154164165 - The total outstanding balance of related-party loans was $2,689,785 as of June 30, 2024, and convertible promissory notes totaled $1,000,000156157158159160164165 Off-Balance Sheet Arrangements This section confirms that ClimateRock had no off-balance sheet arrangements as of June 30, 2024 - As of June 30, 2024, the Company had no obligations, assets, or liabilities considered off-balance sheet arrangements167 Contractual Obligations This section details ClimateRock's various contractual commitments, including deferred underwriting commissions, legal fees, and advisory service fees, contingent on a business combination - The Company has a deferred underwriting commission of $2,362,500 payable upon completion of an initial Business Combination170 - Legal fees from Ellenoff, Grossman & Schole LLP include a deferred portion of $448,568 (50% of outstanding balance) contingent upon a successful Business Combination, plus a 20% premium172 - Maxim Group LLC is entitled to a success fee ranging from $200,000 cash + $150,000 common stock to $500,000 cash + $500,000 cash/common stock, depending on the cash in the Trust Account prior to a Business Combination173 - ALANTRA Corporate Finance, S.A.U. is due a retainer and a success fee of at least EUR 1,000,000 upon completion of a transaction176177 - MZHCI, LLC provides consulting services for $12,000 per month pre-De-SPAC and $15,000 per month post-De-SPAC, plus $120,000 worth of restricted common stock upon successful close of the initial Business Combination179 Related Party Transactions This section outlines ClimateRock's financial dealings with related parties, including share conversions, loan agreements, convertible notes, and administrative and advisory service fees - The Sponsor converted 1,968,749 Class B ordinary shares to Class A ordinary shares on March 31, 2023, retaining one Class B ordinary share183 - The Company has multiple unsecured, non-interest-bearing loans from Eternal B.V., an affiliate, with outstanding balances totaling $2,689,785 as of June 30, 2024. These loans will incur 5% monthly interest if not repaid within 10 days of a Business Combination184185186187188190 - Convertible promissory notes from the Sponsor (2023 and 2024 Extension Notes) had outstanding balances of $900,000 and $100,000, respectively, as of June 30, 2024, used to fund the Trust Account193194 - Administrative services are provided by Gluon Group, an affiliate, for a monthly fee of $10,000, with $244,941 accrued as of June 30, 2024195 - Advisory services from Gluon Partners LLP include a Transaction Success Fee of $250,000 for transactions over $400,000,000, and financing fees of 2.0% for debt and 5.0% for equity financings197198199 Critical Accounting Estimates This section highlights that preparing financial statements requires management to make significant estimates and assumptions impacting reported financial figures - The preparation of financial statements requires management to make estimates and assumptions that affect reported asset and liability amounts, contingent disclosures, and income/expenses203 Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, ClimateRock is not required to provide quantitative and qualitative disclosures about market risk in this Quarterly Report - The Company is a smaller reporting company and is exempt from providing quantitative and qualitative disclosures about market risk204 Item 4. Controls and Procedures This section details the evaluation of ClimateRock's disclosure controls and procedures, concluding their effectiveness as of June 30, 2024, while acknowledging inherent limitations. It also confirms no material changes in internal control over financial reporting during the quarter - The Certifying Officers concluded that the Company's disclosure controls and procedures were effective as of June 30, 2024206 - Disclosure controls and procedures provide reasonable, not absolute, assurance due to inherent limitations and resource constraints207 - There were no material changes to internal control over financial reporting during the quarter ended June 30, 2024208 PART II - OTHER INFORMATION This section provides additional information beyond financial statements, covering legal proceedings, risk factors, equity sales, defaults, and other disclosures Item 1. Legal Proceedings ClimateRock's management team is not aware of any pending or contemplated litigation against the company, its officers, or directors - To the knowledge of management, there is no litigation currently pending or contemplated against the Company, its officers, or directors208 Item 1A. Risk Factors As a smaller reporting company, ClimateRock is not required to include risk factors in this Quarterly Report but refers readers to previous filings for comprehensive risk disclosures, including those related to its operations and the GreenRock Business Combination - As a smaller reporting company, ClimateRock is not required to include risk factors in this Quarterly Report209 - Readers are directed to previous filings (IPO Registration Statement, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and definitive proxy statements) for additional risks209 - Risks related to GreenRock and the GreenRock Business Combination are detailed in the Registration Statement on Form F-4 filed by Pubco210 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports no unregistered sales of equity securities during the period. It also details the use of proceeds from the Initial Public Offering and Private Placement, noting a material change in the redemption of ordinary shares during the quarter - There were no unregistered sales of equity securities during the period210 - The planned use of proceeds from the Initial Public Offering and Private Placement has not materially changed, except for redemptions211 - In connection with the 2024 EGM, 111,915 ordinary shares were redeemed for approximately $1.27 million ($11.37 per share) from the Trust Account212 Item 3. Defaults Upon Senior Securities ClimateRock reports no defaults upon senior securities during the quarterly period ended June 30, 2024 - There were no defaults upon senior securities during the quarterly period ended June 30, 2024214 Item 4. Mine Safety Disclosures This item is not applicable to ClimateRock - Mine Safety Disclosures are not applicable to the Company215 Item 5. Other Information During the quarter ended June 30, 2024, no directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2024216 Item 6. Exhibits This section lists all exhibits filed as part of, or incorporated by reference into, the Quarterly Report, including amendments to the Memorandum and Articles of Association, promissory notes, loan agreements, and certifications - Exhibits include an amendment to the Amended and Restated Memorandum and Articles of Association, a promissory note dated April 30, 2024, and several loan agreements and amendments with Eternal BV dated August 5 and 6, 2024220 - Certifications from the Principal Executive Officer and Principal Financial Officer are included, along with Inline XBRL documents220 SIGNATURES This section contains the required signatures for the Quarterly Report, affirming its accuracy and completeness
Climaterock(CLRCU) - 2024 Q2 - Quarterly Report