Overview

Clover Acquisition Corp. (the “Company”) is a blank check company incorporated in the Cayman Islands on September 27, 2023. The Company was formed for the purpose of effecting a business combination with one or more businesses or entities. The Company intends to use cash from the proceeds of its initial public offering (IPO) and private placement, as well as debt and equity, to complete a business combination.

Results of Operations

The Company has not engaged in any operations or generated any revenue to date. Its activities have been limited to organizational tasks, preparing for and completing the IPO, and identifying a target company for a business combination. The Company generates non-operating income in the form of interest on the marketable securities held in its trust account. It incurs expenses related to being a public company, as well as due diligence costs.

For the three months ended September 30, 2024, the Company had net income of $1,440,771, consisting of $2,266,437 in interest income offset by $825,666 in operating expenses. For the nine months ended September 30, 2024, the Company had net income of $4,754,520, consisting of $6,735,555 in interest income offset by $1,981,035 in operating expenses. For the period from September 27, 2023 (inception) through September 30, 2023, the Company had a net loss of $13,359, consisting of operating expenses.

Factors That May Adversely Affect Results of Operations

The Company’s results and ability to complete a business combination may be adversely affected by various factors, including economic uncertainty, volatility in financial markets, increases in oil prices and interest rates, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability. The Company cannot predict the likelihood, duration, or magnitude of these events and their potential negative impact on its business.

Liquidity, Capital Resources and Going Concern

The Company completed its IPO on November 24, 2023, raising $170 million in gross proceeds. It also raised $5 million from the sale of private placement warrants. As of September 30, 2024, the Company had $176,592,012 in cash and marketable securities held in the trust account and $480,735 in cash held outside the trust account.

For the nine months ended September 30, 2024, the Company used $1,726,456 in net cash for operating activities. The Company can withdraw up to $1 million annually from the trust account for working capital purposes and to pay taxes.

The Company may need to raise additional capital through loans or investments to meet its working capital needs. If the Company is unable to obtain such financing, it may be required to take measures to conserve liquidity, which could include curtailing operations, suspending the pursuit of a transaction, and reducing overhead expenses. These conditions raise substantial doubt about the Company’s ability to continue as a going concern if a business combination is not consummated.

Contractual Obligations

The Company’s key contractual obligations include:

• Administrative Services Agreement: $10,000 per month for office space and administrative support
• Services and Indemnification Agreement: $60,000 per month for executive services
• Underwriting fees: $2.55 million cash fee and $5.95 million deferred fee
• Financial Advisory Services Agreement: $510,000 fee and up to $1.19 million deferred fee

Critical Accounting Estimates and Policies

The Company’s critical accounting policies include:

• Accounting for ordinary shares subject to possible redemption
• Accounting for warrant instruments
• Calculation of net income per ordinary share
• Adoption of new accounting standards, including ASU 2016-13 and ASU 2020-06

Overall, the Company’s financial performance to date has been focused on preparing for and completing its IPO, as well as identifying a target for a business combination. The Company faces risks and uncertainties that could adversely impact its ability to complete a successful transaction and generate future revenue and profits.