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 unaudited condensed consolidated 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, 2025 (the “Annual Report on Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”), on March 31, 2026. 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. 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 our direct wholly owned subsidiary, 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 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. For more information about the Business Combination Agreement and the Business Combination, see Note 1- “Proposed Business Combination”. Transaction Support Agreement Simultaneously with the execution and delivery of the Business Combination Agreement, we and certain stockholders of CTR (collectively, the “Supporting CTR Stockholders”), 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 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. 21 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 (the “Amended and Restated Registration Rights Agreement”) 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). July Promissory Note On July 8, 2025, we issued an unsecured promissory 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 (as defined below) does not bear interest and the principal balance will be payable on the date on which we consummate our initial business combination. 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 number of New PubCo Shares (as defined below) 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. Results of Operations We have neither engaged in any operations nor generated any operating revenues to date. Our only activities for the period from June 10, 2024 (inception) through March 31, 2026 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 March 31, 2026, we had a net income of $1,199,134, which consists of interest earned on investments held in Trust Account of $1,449,969 and interest earned on operating account of $1,880, offset by general and administrative expenses of $252,715. For the three months ended March 31, 2025, we had a net income of $1,182,055, which consists of interest earned on investments held in Trust Account of $1,488,400 offset by formation and operational costs of $306,345. 22 Liquidity and Capital Resources As of March 31, 2026, we had cash of $93,512. 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 three months ended March 31, 2026, cash used in operating activities was $202,737. Net income of $1,199,134 was affected by interest earned on investments held in trust account of $1,449,969. Changes in operating assets and liabilities provided $48,098 of cash for operating activities. For the three months ended March 31, 2025, cash used in operating activities was $338,313. Net income of $1,182,055 was affected by interest earned on investments held in trust account of $1,488,400, compensation expense of $36,750 and payment of operation costs through promissory note of $8,550. Changes in operating assets and liabilities used $77,268 of cash for operating activities. As of March 31, 2026, we had investments held in the trust account of $182,735,189. 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 March 31, 2026, we had cash of $93,512 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 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. 23 Going Concern As of March 31, 2026, we had $93,512 in cash and working capital deficit of $318,003. 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 March 31, 2026, management has determined that mandatory liquidation, should a business combination not occur, and potential subsequent dissolution and the liquidity issue raise substantial doubt about our ability to continue as a going concern for one year from the date the unaudited condensed consolidated 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 March 31, 2026. 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, excluding the promissory note – related party, 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 consolidated 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 unaudited condensed consolidated 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. 24 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 unaudited condensed consolidated financial statements. Item 3. Quantitative and Qualitative Disclosures About Market Risk Not required for smaller reporting companies.