Plum Acquisition Corp, IV 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations References in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Plum Acquisition Corp. IV. References to our “management” or our “management team” refer to our officers and directors, and references to the “sponsor” refer to Plum Partners IV, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Special Note Regarding Forward-Looking Statements This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of an initial business combination, the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2024 (the “Annual Report on Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”), on March 31, 2025. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Overview We are a blank check company incorporated in the Cayman Islands on June 10, 2024, formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses. We intend to effectuate our business combination using cash derived from the proceeds of the initial public offering and the sale of the private placement unit, our shares, debt or a combination of cash, shares and debt. We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful. Results of Operations We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from inception through June 30, 2025 were organizational activities and those necessary to prepare for the initial public offering, described below and, after our initial public offering, identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We expect to generate non-operating income in the form of interest income on marketable securities held after the initial public offering. We expect that we will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a business combination. For the three months ended June 30, 2025, we had a net income of $1,629,227, which consists of interest earned on investments held in Trust Account of $1,867,009 offset by general and administrative expenses of $237,782. For the six months ended June 30, 2025, we had a net income of $2,811,282, which consists of interest earned on investments held in Trust Account of $3,355,409 offset by general and administrative expenses of $544,127. For the period from June 10, 2024 (inception) through June 30, 2024, we had a net income of $28,263, which consists of formation and operational costs. 18 Liquidity and Capital Resources As of June 30, 2025, we had cash of $375,823. Until the consummation of the initial public offering, our only source of liquidity was an initial purchase of ordinary shares by the sponsor and loans from our sponsor. On January 16, 2025, we consummated the initial public offering of 17,250,000 units, at a price of $10.00 per unit, which included the full exercise by the underwriters of their over-allotment option in the amount of 2,250,000 units, generating gross proceeds of $172,500,000. Simultaneously with the closing of the initial public offering, we consummated the sale of an aggregate of 672,875 private placement units to the sponsor at a price of $10.00 per private placement unit generating gross proceeds of $6,728,750. Following the initial public offering, on January 16, 2025, the full exercise of the over-allotment option, and the sale of the private placement units, a total of $174,225,000 was placed in the trust account, and we had $971,550 of cash held outside of the trust account, after payment of costs related to the initial public offering, and available for working capital purposes. We incurred $10,932,289 in transaction costs, including $3,450,000 of underwriting fees, $6,900,000 of deferred underwriting fees and $582,289 of other offering costs. For the six months ended June 30, 2025, cash used in operating activities was $539,932. Net income of $2,811,282 was affected by interest earned on investments held in trust account of $3,355,409, compensation expense of $36,750 and payment of operation costs through promissory note of $8,550. Changes in operating assets and liabilities used $41,105 of cash for operating activities. For the period from June 10, 2025 (inception) through June 30, 2024, cash used in operating activities was $0. Net income of $228,263 was affected by payment of operation costs through promissory note of $10,420. Changes in operating assets and liabilities used $17,843 of cash for operating activities. As of June 30, 2025, we had investments held in the trust account of $177,580,409. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account, which interest shall be net of taxes payable, to complete our business combination. We may withdraw interest from the trust account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. As of June 30, 2025, we had cash of $375,823 for working capital purpose. We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination. In order to fund working capital deficiencies or finance transaction costs in connection with a 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 funds as may be required. If we complete a business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that a business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units, at a price of $10.00 per unit, at the option of the lender. The units would be identical to the private placement units. On July 8, 2025, we issued an unsecured promissory note (the “Note”) in the principal amount of up to $1,500,000 to the sponsor which may be drawn down from time to time prior to the Maturity Date (as defined below) upon our request. The Note does not bear interest and the principal balance will be payable on the date on which we consummate our initial business combination (the “Maturity Date”). In the event we consummate the business combination, the sponsor has the option on the Maturity Date to convert the principal outstanding under the Note into that number of ordinary shares of the post-business combination company (the “New PubCo Shares”). The number of New PubCo Shares to be received by the sponsor in connection with such optional conversion will be an amount determined by dividing (x) the sum of the outstanding principal amount (or portion thereof) payable to the sponsor by (y) $10.00. The Note is subject to customary events of default, the occurrence of certain of which automatically triggers the unpaid principal balance of the Note and all other sums payable with regard to the Note becoming immediately due and payable. If our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our business combination or because we become obligated to redeem a significant number of our public shares upon completion of our business combination, in which case we may issue additional securities or incur debt in connection with such business combination. 19 Going Concern As of June 30, 2025, we had $375,823 in cash and a working capital of $351,062. Further, we have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. There is no assurance that our plans to raise capital will be successful. In connection with our assessment of going concern considerations in accordance with Accounting Standards Codification (“ASC”) Topic 205-40, “Going Concern,” as of June 30, 2025, management has determined that mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution and the liquidity issue raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date the financial statements are issued. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after July 16, 2026, or such earlier liquidation date as our board of directors may approve to complete our initial business combination. We cannot assure that our plans to raise capital or to consummate an initial business combination will be successful. Off-Balance Sheet Arrangements We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets. Contractual Obligations We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay each officer an aggregate of $20,833 per month, subject to availability of sufficient funds from working capital held outside the trust account. We began incurring these fees on January 16, 2025, and will continue to incur these fees monthly until the earlier of the completion of the business combination and our liquidation. The underwriters were entitled to (1) an underwriting discount of $0.20 per unit, or $3,450,000 in the aggregate, of which (i) $0.065 per unit was paid to the underwriters in cash at the closing of the initial public offering and (ii) $0.135 per unit was used by the underwriters to purchase private placement units, and (2) a deferred fee of $0.40 per unit, or $6,900,000. The deferred fee will become payable to the underwriters from the amounts held in the trust account solely in the event that we complete a business combination, subject to the terms of the underwriting agreement and will be based on the amount of funds remaining in the trust account after shareholder redemptions of public shares in connection with the consummation of a business combination. Critical Accounting Estimates and Policies The preparation of unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America 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. We have not identified any critical accounting policies. Recent Accounting Standards Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements. 20 Item 3. Quantitative and Qualitative Disclosures About Market Risk Not required for smaller reporting companies.