Climaterock (CLRC) 10-K Review: SPAC Journey and GreenRock Merger Deep-Dive

Welcome to our comprehensive review of Climaterock’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. In this 1,500-word analysis, we cover the most important sections of the filing—Item 1 (Business), Item 8, Item 7 and Item 7A (Financial Data), Item 1A (Risk Factors)—and break down whether Climaterock is a buy, hold or pass for investors. We also clearly state the company’s net loss for the year, and we assign a bottom-line investment score of 3.4/10.

Warren.AI 💰 3.4 / 10

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1. SPAC Overview and Business Model (Item 1)

Climaterock (Nasdaq: CLRCU, CLRC, CLRCW, CLRCR) is a Cayman-Islands exempted blank check company (SPAC) formed on December 6, 2021. Its purpose is to identify and merge with a private target in the sustainable energy, climate tech or clean technology sectors. Key facts:

• Sponsor: U.N. SDG Support LLC • Founder Shares: 2,156,250 Class B Ordinary Shares issued for $0.012 each • IPO: May 2, 2022 — 7,875,000 Units at $10.00/unit • Private Placement: 3,762,500 warrants at $1.00/warrant to the Sponsor • Trust Account: $79.93 million deposited—invested in U.S. treasuries (maturing within 185 days) or money market funds • Deadline: Must close a business combination by November 2, 2025 (extended twice by shareholder vote)

Each Unit consists of a Class A Share, one-half public warrant and one right to receive 0.1 shares upon a successful combination. The public warrants are exercisable at $11.50 per share post-combination.

Business Strategy and Team

Climaterock’s management team is led by:

• Per Regnarsson (CEO & Director): 15+ years in sustainable infrastructure and private equity, ex-Palmetto Group
• Charles Ratelband V (Executive Chairman): Founder of WindShareFund (focused on European wind turbines)

They are supported by a lean finance function and an independent board of directors with cross-industry expertise in clean energy, corporate finance and ESG.

2. Transaction History and Extensions

Terminated EEW Deal

Initially, Climaterock signed a business combination agreement with E.E.W. Eco Energy World PLC (UK) in October 2022. That deal was terminated effective November 29, 2023 when closing conditions were not met.

GreenRock Business Combination

On December 30, 2023, Climaterock entered into a definitive agreement to merge with GreenRock Corp., a Cayman Islands renewable energy firm. Highlights:

• Structure: Dual merger—SPAC Merger Sub into Climaterock, and Climaterock Merger Sub into GreenRock
• Consideration: 44.7 million new holding co shares (Pubco Ordinary Shares), of which 16.7 million are escrowed for earn-outs
• Escrow: 16.7 million shares held in escrow earn out over two “checkpoints” tied to GreenRock’s Adjusted EBITDA:
• First checkpoint (3/31/24): $24.348 million EBITDA to release escrow tranche
• Second checkpoint (2024 audited): up to $38.85 million target to release remainder
• If targets are missed, unvested shares are forfeited back to Pubco
• Approvals required: Climaterock and GreenRock shareholder votes, SEC registration statement effectiveness, Nasdaq listing approval, no material adverse effects, etc.

Deadline Extensions and Financing Notes

Climaterock’s shareholders twice voted to extend the initial 12-month SPAC window by 6 months, then 12 months:

1. 2023 Extension (Approved 4/27/23) — Extended to May 2, 2024. Sponsors funded $900 K convertible note.
2. 2024 Extension (Approved 4/29/24) — Extended to May 2, 2025. Sponsors funded $600 K convertible note.
3. 2025 Extension (Approved 5/1/25) — Extended to November 2, 2025. Sponsors funded $107.6 K convertible note.

Funds for extension are deposited into the Trust Account at $50 K/month (2024 Extension) or $0.04 per existing Public Share/month (2025 Extension). Meanwhile, the Sponsor and certain affiliates advanced working capital loans totaling $4.7 million (unsecured, interest-free) for SPAC expenses and due diligence.

3. Financial Review (Items 7, 7A and 8)

As of December 31, 2024:

• Cash Outside Trust: $14,384
• Trust Account Balance: $29,381,085
• Working capital deficit: $(5,753,598)
• Convertible notes & loans: $4.0 million payable to Sponsor/Affiliates
• Deferred underwriting fees: $2.362 million (contingent on closing a combination)

Results of Operations

The SPAC has no operating revenues. It earns the following non-operating income:

• Dividend income: $1.445 million (Interest & dividends on Trust Account)
• Interest income: $167

The 2024 pre-combination expenses consist mainly of:

• Formation & operating costs: $1.715 million (legal, audit, financial advisory)
• Admin service fee (to Sponsor affiliate): $120 K per year

Net loss for the year ended December 31, 2024: $(390,001) (compared to net income of $483,430 in 2023, driven by larger earned dividends in 2023).

Cash Flow Summary

• Operating cash burn (2024): $(1.585 million)
• Trust Account withdrawals: $1.272 million (2023/24 redemptions)
• Sponsor loan proceeds: $2.242 million

Going Concern

Due to recurring losses and a working capital deficit, management cites “substantial doubt” about the SPAC’s ability to continue as a going concern beyond its SPAC window unless the Business Combination with GreenRock closes or fresh capital is raised internally.

Capital Structure

• Authorized shares: 500 million ordinary shares (split 95% Class A / 5% Class B)
• Outstanding Class A shares: 2.086 million non-redeemable (founder & representative), 2.465 million redeemable (public)
• Public warrants: 3.937 million (half warrant per unit)
• Private warrants: 3.762 million (Sponsor warrants)

Redemption value of public shares is $11.92 per share as of December 31, 2024 (Trust balance divided by outstanding shares).

4. Principal Risks & Uncertainties (Item 1A)

Key risks cited by Climaterock and our analysis:

1. SPAC risk: No ongoing operations. The sole path to liquidity is closing a merger or liquidating in 2025.
2. Delisting: The SPAC failed to maintain 400 public holders, got a Nasdaq delisting notice—now trading on the OTC pink sheets.
3. Extension fatigue: Three extensions erode the Trust Account and raise questions on deal flow quality.
4. Sponsor loans: $4.7 million in related-party loans add to the liability stack and dilute future equity value.
5. No revenue: No operating business has been acquired; net losses persist and audit fees continue.
6. Financing gaps: GreenRock deal requires minimum cash and third-party financing, which is never assured.
7. Complex transaction: Earn-out structure and multiple closing conditions introduce execution risk.
8. Regulatory uncertainty: Possible exposure to U.S. anti-investment-company rules and SPAC-related SEC regulations.
9. Market volatility: Interest rate and sector-specific turbulence can deter investors from SPAC mergers.
10. Insider interests: Sponsor and executives have economic incentives that may diverge from public holders.

Taken together, these risks make Climaterock a highly speculative, deal-dependent investment.

5. Outlook and Valuation

Where We Stand

• Combination window: Expiring November 2, 2025. Next major event is the shareholder vote for further extensions or liquidation.
• Closing conditions: GreenRock deal must satisfy minimum cash, earn-out triggers and shareholder approvals—no certainty.
• Leadership: Experienced SPAC management but no track record of a successful deal to date.

Investment Case

Bull Factors

• $29.4 million in trust—a sizable war chest for a SPAC this size.
• Earn-outs align management with performance.
• GreenRock is in a tangible clean-energy sector with visible cash flows.

Bear Factors

• Must close by November 2025 or liquidate at $11.92/share (current IPO price was $10).
• OTC trading signals low retail interest—liquidity may evaporate.
• Net loss in 2024, cash burn and working capital deficit.
• Sponsor and affiliate loans rank ahead of public equity.
• Extensions dilute the Trust and raise doubts on deal closing.

Net profit (loss): $(390,001) for 2024.

Investment Score: 3.4 / 10 (Too many execution risks, SPAC clock ticking, modest deal pipeline.)

Score Legend

1–3: Highly speculative, avoid unless you're a SPAC deal gambler. 4–6: Moderate risk SPACs with credible targets—diluted upside. 7–10: Blue-chip or high-conviction deals at reasonable metrics.

6. Conclusion: Buy, Hold or Pass?

Climaterock is a textbook SPAC—no operating business, large cash trust, aggressive sponsor extensions and a signing announcement. However, the combination window is nearly expired, Nasdaq delisting and the OTC pink sheets listing sap liquidity. The current net loss, working capital gap and related-party loans heighten financial risk. A successful GreenRock merger could reaccelerate value, but closing conditions are onerous and execution is not assured.

Recommendation: Pass. Climaterock scores 3.4/10—too many deal uncertainties and a SPAC clock ticking. Wait for a more mature SPAC or organic clean-energy IPO with runway, revenue and tighter sponsor alignment.

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Thank you for reading this deep dive into Climaterock’s 2024 10-K. Bookmark us for more SEC filing reviews, SPAC analyses and real-time investment scores.

Disclaimer: This is not financial advice. Always consult your investment professional.