Plum Acquisition Corp, IV 10-K

ITEM 1. BUSINESS General We are a blank check company, incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Our efforts to identify a prospective initial business combination target will not be limited to a particular industry, sector or geographic region. While we may pursue an initial business combination opportunity in any industry or sector, we intend to capitalize on the ability of our management team to identify, acquire and operate a business or businesses that can benefit from our management team’s established global relationships, sector expertise and active management and operating experience. On June 26, 2024, our sponsor paid $25,000, or approximately $0.003 per share, to cover certain of our offering and formation costs in exchange for an aggregate of 7,665,900 Class B ordinary shares. During July and August 2024, our sponsor transferred 25,000 founder shares to each of three independent directors (an aggregate of 75,000 founder shares) at their original purchase price. On December 6, 2024, our sponsor surrendered 1,915,900 founder shares for no consideration. On April 25, 2025, our sponsor transferred 25,000 founder shares to our fourth independent director. Our initial shareholders currently hold an aggregate of 5,750,000 founder shares. Subject to each non-managing investor purchasing, through an investment in our sponsor, the non-managing investor private placement securities allocated to it in connection with the closing of the initial public offering, our sponsor issued membership interests at a nominal purchase price to the non-managing investors reflecting interests in an aggregate of 2,280,000 founder shares held by our sponsor. Prior to the initial investment in the company of $25,000 by our sponsor, we had no assets, tangible or intangible. The purchase price of these founder shares was determined by dividing the amount of cash contributed to us by the number of founder shares issued. On January 16, 2025, we consummated the initial public offering of 17,250,000 units, which included the full exercise of the underwriters’ over-allotment option. Each unit consists of one Class A ordinary share and one-half of one redeemable public warrant, each whole public warrant entitling the holder thereof to purchase one Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $172,500,000 (before underwriting discounts and commissions and offering expenses). Simultaneously with the consummation of the initial public offering and the issuance and sale of the units, on January 16, 2025, we consummated the private placement of an aggregate of 672,875 private placement units and 570,000 restricted private placement shares at a price of $10.00 per private placement unit or $10.00 per non-managing investor private placement security, as applicable, generating gross proceeds of $6,728,750, as follows: (A) 440,000 private placement units and 570,000 restricted private placement shares ($4,400,000 in the aggregate) with the sponsor, (B) 186,300 private placement units ($1,863,000 in the aggregate) with Cohen and (C) 46,575 private placement units ($465,750 in the aggregate) with Seaport (collectively, the “private placement”). The private placement units, which were purchased by the sponsor, Cohen and Seaport, are identical to the units, except that, they (including the underlying securities) are (i) subject to certain limited exceptions, subject to transfer restrictions until 180 days following the consummation of our initial business combination and (ii) entitled to registration rights. The restricted private placement shares are held by the sponsor and will be transferred to the non-managing investors (or their designees) only upon the consummation of an initial business combination. Other than such permitted transfer, the restricted private placement shares are (i) subject to transfer restrictions until 90 days following the consummation of our initial business combination and (ii) entitled to registration rights. A total of $174,225,000 of the net proceeds from the initial public offering and the private placement (which includes the underwriters’ deferred discount of up to $6,900,000) was placed in a trust account, with Continental Stock Transfer & Trust Company acting as trustee. 1 Proposed Business Combination Business Combination Agreement On March 8, 2026, we entered into a business combination agreement (the “Business Combination Agreement”) by and among us, Plum IV Merger Sub, Inc., a Delaware corporation and our direct wholly owned subsidiary (“Merger Sub”), and Controlled Thermal Resources Holdings Inc., a Delaware corporation (“CTR”), pursuant to which, among other things and subject to the terms and conditions contained therein, Merger Sub will merge with and into CTR (the “Merger”), with CTR continuing as the surviving company. The transactions contemplated by the Business Combination Agreement are referred to in this Annual Report as the “Business Combination.” The combined company’s business is expected to continue to operate through CTR. The proposed Merger is expected to be consummated after receipt of the required approvals by our shareholders and CTR’s stockholders and the satisfaction or waiver of certain other customary conditions. Domestication At least two (2) business days prior to the Closing Date (as defined in the Business Combination Agreement), subject to the satisfaction or waiver of the conditions of the Business Combination Agreement, the Company will transfer by way of continuation from the Cayman Islands to the State of Delaware and domesticate as a Delaware corporation (“Domesticated Plum IV”) in accordance with Section 388 of the General Corporation Law of the State of Delaware, as amended, and Part 12 of the Companies Act (as revised) of the Cayman Islands (such continuation and domestication, the “Domestication”). By virtue of the Domestication upon its effectiveness, (a) each then issued and outstanding Class A ordinary share, par value $0.0001 per share, of the Company (each a “Class A Ordinary Share”) (other than any Class A Ordinary Share included in the Cayman Purchaser Units (as defined in the Business Combination Agreement)) shall convert automatically, on a one-for-one basis, into one (1) share of common stock of Domesticated Plum IV (the “Domesticated Purchaser Common Stock”); (b) each then issued and outstanding Class B ordinary share, par value $0.0001 per share, of the Company (each a “Class B Ordinary Share”) shall convert automatically, on a one-for-one basis, into one (1) share of Class B common stock of Domesticated Plum IV (the “Domesticated Purchaser Class B Common Stock”); (c) each then issued and outstanding warrant of the Company (other than any Cayman Purchaser Public Warrants (as defined in the Business Combination Agreement)) included in the Cayman Purchaser Units) (each a “Cayman Purchaser Warrant”) shall convert automatically into a warrant to acquire one (1) share of Domesticated Purchaser Common Stock (each a “Domesticated Purchaser Warrant”), pursuant to the Warrant Agreement (as defined in the Business Combination Agreement); and (d) each then issued and outstanding Cayman Purchaser Unit shall be cancelled and will thereafter entitle the holder thereof to one (1) share of Domesticated Purchaser Common Stock and one-half of one (1) Domesticated Purchaser Warrant, in each case without any action on the part of the Company, Merger Sub, the Company or any holder of securities of any of the foregoing. The Merger and Consideration Following the Domestication, at the Effective Time (as defined in the Business Combination Agreement), by virtue of the Merger, each share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be automatically cancelled and extinguished and converted into one (1) share of common stock, par value $0.0001 per share, of the surviving company. Subject to, and in accordance with the terms and conditions of the Business Combination Agreement, at the Effective Time (as defined in the Business Combination Agreement): (i) each share of common stock of CTR (the “CTR Common Stock”) issued and outstanding (or deemed to be issued and outstanding under the terms of the Business Combination Agreement) immediately prior to the Effective Time, except for (a) shares held by the Company or Merger Sub (or any subsidiaries of the Company), (b) shares held by the CTR as treasury stock, if any (each share covered in subclause (a) and (b), an “Excluded Share”), (c) shares held by stockholders who have properly exercised and not withdrawn appraisal rights under Delaware law (the “Dissenting Shares”), and (d) shares of CTR Common Stock issued pursuant to an award of restricted stock that is, as of immediately prior to the Closing Date (as defined in the Business Combination Agreement), subject to a substantial risk of forfeiture and is not transferable (the “CTR Restricted Shares”), will be cancelled and converted into the right to receive the Per Share Merger Consideration (as defined in the Business Combination Agreement); (ii) each Excluded Share shall be automatically cancelled and retired without any conversion thereof and shall cease to exist, and no consideration shall be delivered in exchange therefor; 2 (iii) each option to purchase shares of the CTR Common Stock (the “CTR Option”) that is outstanding immediately prior to the Effective Time will be automatically assumed by Domesticated Plum IV and converted into an option to purchase a number of shares of Domesticated Purchaser Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of CTR Common Stock subject to such CTR Option immediately prior to the Effective Time and (y) the Exchange Ratio (as defined in the Business Combination Agreement), at an exercise price per share (rounded up to the nearest whole cent) equal to the quotient of (A) the exercise price per share of such CTR Option immediately prior to the Effective Time divided by (B) the Exchange Ratio; (iv) each award of the CTR Restricted Shares (the “CTR Restricted Share Award”) that is outstanding immediately prior to the Effective Time will be automatically assumed by Domesticated Plum IV such that each CTR Restricted Share Award will be converted into an award for a number of restricted shares of Domesticated Purchaser Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of CTR Restricted Shares and (y) the Exchange Ratio; and (v) each warrant to purchase shares of the CTR Common Stock (the “CTR Warrant”) that is outstanding immediately prior to the Effective Time will be automatically assumed by the Domesticated Plum IV such that, as of the Effective Time, each CTR Warrant shall instead be converted into a warrant to purchase a number of shares of Domesticated Purchaser Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of CTR Common Stock issuable upon exercise of such CTR Warrant and (y) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to the quotient of (A) the exercise price per share of such CTR Warrant immediately prior to the Effective Time divided by (B) the Exchange Ratio. The Class B Conversion At the Effective Time, by virtue of the Merger and the applicable provisions of the certificate of incorporation of Domesticated Plum IV (the “Domesticated Purchaser Charter”), each share of Domesticated Purchaser Class B Common Stock then issued and outstanding shall be automatically cancelled and extinguished and converted into one (1) share of Domesticated Purchaser Common Stock. Transaction Support Agreement Simultaneously with the execution and delivery of the Business Combination Agreement, we and certain stockholders of CTR, who collectively have the right to cast at least 60% of the votes entitled to be cast at a special meeting of CTR’s stockholders (collectively, the “Supporting CTR Stockholders”) entered into a transaction support agreement (the “Transaction Support Agreement”), pursuant to which the Supporting CTR Stockholders have agreed, among other things, to vote all of their shares of CTR’s common stock in favor of adopting and approving the Business Combination Agreement and the Business Combination. Registration Rights Agreement In connection with the Business Combination, simultaneously with the closing of the Business Combination (the “Closing”), we and certain holders will enter into an amended and restated registration rights agreement (the “Amended and Restated Registration Rights Agreement”) that amends and restates the Registration Rights Agreement, dated January 14, 2025, by and among us, our sponsor and certain other security holders named therein, pursuant to which, among other things, (i) we will agree to file, as soon as practicable (and in any event within thirty (30) calendar days) following the closing date, a registration statement covering the resale of certain equity securities held by the sponsor and such other securityholders parties thereto; and (ii) such holders of registrable securities will be granted certain takedown, demand, block trade and piggyback registration rights with respect to their registrable securities, in each case, on the terms and subject to the conditions set forth in the Amended and Restated Registration Rights Agreement. Lock-Up Agreement In connection with the Business Combination, simultaneously with the closing, we, our sponsor and certain stockholders of CTR (such holders, collectively, the “Lock-Up Parties”) will enter into a Lock-Up Agreement (the “Lock-Up Agreement”). The Lock-Up Agreement will provide that, during the applicable Lock-Up Period (as defined in the Lock-Up Agreement), subject to certain exceptions, the Lock-Up Parties will not, with respect to the Lock-Up Securities (as defined in the Lock-Up Agreement), (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidation with respect to or decrease a call equivalent position, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce the intention to effect any transaction specified in clause (i) or (ii). 3 Selection of a Target Business and Structuring of our Initial Business Combination Nasdaq listing rules require that our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the trust account (excluding any deferred underwriters’ fees and taxes payable on the income earned on the trust account). We refer to this as the 80% fair market value test. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board of directors is not able independently to determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination solely with another blank check company or a similar company with nominal operations. In any case, we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value test. There is no basis for investors in the initial public offering to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination. To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors. In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information, which will be made available to us. The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. Redemption Rights for Public Shareholders Upon Completion of our Initial Business Combination We will provide our public shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or against, our initial business combination, all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitations described herein. At the completion of our initial business combination, we will be required to purchase any ordinary shares properly delivered for redemption and not withdrawn. The amount in the trust account is initially anticipated to be $10.10 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its public shares. There will be no redemption rights upon the completion of our initial business combination with respect to our public warrants. Our initial shareholders, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the completion of our initial business combination. The non-managing investors are not required to (i) hold any units, Class A ordinary shares or public warrants they may purchase in the initial public offering or thereafter for any amount of time, (ii) vote any Class A ordinary shares they may own at the applicable time in favor of our initial business combination or (iii) refrain from exercising their right to redeem their public shares at the time of our initial business combination. The non-managing investors will have the same rights to the funds held in the trust account with respect to the Class A ordinary shares underlying the units they may purchase in the initial public offering as the rights afforded to our other public shareholders. 4 Limitation on Redemption Upon Completion of our Initial Business Combination If we Seek Shareholder Approval Notwithstanding the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us, our sponsor or its affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in the initial public offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our sponsor or its affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares sold in the initial public offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Redemption of Public Shares and Liquidation if No Initial Business Combination Our sponsor, our directors and officers have agreed that we will have only until July 16, 2026 or until such earlier liquidation date as our board of directors may approve to complete our initial business combination, or during any Extension Period, subject to applicable law. If we have not completed our initial business combination by July 16, 2026, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses) and not previously released to us to pay our taxes, if any, divided by the number of then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our public warrants, which will expire worthless if we fail to complete our initial business combination by July 16, 2026. Competition We have encountered and, if the business combination with CTR is not completed, may in the future encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of the initial public offering and, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek shareholder approval of our initial business combination and we are obligated to pay cash for our Class A ordinary shares, it will potentially reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. Employees We currently have two officers and do not intend to have any full-time employees prior to the completion of our initial business combination. Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that any such person will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process. 5 Periodic Reporting and Financial Information We have registered our units, Class A ordinary shares and public warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accounting firm. We will provide shareholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to shareholders to assist them in assessing the target business. These financial statements may be required to be prepared in accordance with, or be reconciled to, U.S. GAAP or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with PCAOB standards. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material. We are required to evaluate our internal control procedures for the fiscal year ending December 31, 2025 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition. We filed a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination. We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act. Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates equals or exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter. 6