Thunder Bridge Capital Partners IV, Inc. (NASDAQ:THCP) is a blank check company incorporated in Delaware on January 7, 2021. The company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses.

Business Overview

Thunder Bridge Capital Partners IV, Inc. is an early stage and emerging growth company and, as such, the company is subject to all of the risks associated with early stage and emerging growth companies. As of June 30, 2024, the company had not yet commenced any operations. All activity from the period of January 7, 2021 (inception) through June 30, 2024 related to the company's formation, the initial public offering that was consummated by the company on July 2, 2021, and subsequent to the completion of the initial public offering, identifying a target company for and consummating a business combination.

The company completed its initial public offering on July 2, 2021, in which it sold 22,500,000 units at a price of $10.00 per unit, generating gross proceeds of $225,000,000. Simultaneously with the closing of the initial public offering, the company consummated the sale of 625,000 units at a price of $10.00 per unit in a private placement to TBCP IV, LLC, the sponsor, generating gross proceeds of $6,250,000.

On August 9, 2021, the underwriters of the initial public offering exercised the over-allotment option in part and purchased an additional 1,152,784 over-allotment units, generating gross proceeds of $11,527,840. In conjunction with the over-allotment, the company consummated a sale of an additional 23,055 private placement units to the sponsor at a price of $10.00 per private placement unit, generating gross proceeds of $230,550.

Financials

For the six months ended June 30, 2024, the company reported a net loss of $350,829, compared to net income of $3,925,888 for the six months ended June 30, 2023. The net loss for the six months ended June 30, 2024 consisted of formation and operating costs of $571,142, interest income of $774,540, a loss from the change in fair value of the company's warrant liability of $438,711, and a provision for income taxes of $115,516.

For the three months ended June 30, 2024, the company reported a net loss of $123,955, compared to net income of $2,138,445 for the three months ended June 30, 2023. The net loss for the three months ended June 30, 2024 consisted of formation and operating costs of $363,669, interest income of $387,021, a loss from the change in fair value of the company's warrant liability of $97,203, and a provision for income taxes of $50,104.

The company's annual net income for the year ended December 31, 2023 was $4,095,236. The company did not generate any annual revenue for the year ended December 31, 2023. The company's annual operating cash flow for the year ended December 31, 2023 was -$2,159,464, and its annual free cash flow was also -$2,159,464.

Liquidity

As of June 30, 2024, the company had a working capital deficit of approximately $12,499,000, including approximately $1,000 in its operating bank account. The company's liquidity needs to date have been satisfied through (i) a contribution of $25,000 from the sponsor to cover certain expenses in exchange for the issuance of founder shares, (ii) an advance from an affiliate of the sponsor of the payment of certain formation and operating costs on behalf of the company, (iii) the proceeds from the consummation of the private placement not held in the trust account, and (iv) borrowings under a promissory note from the sponsor of up to $1,500,000 (the "WCL Promissory Note") and a promissory note from the sponsor of up to $2,000,000 (the "2024 Promissory Note").

As of June 30, 2024, there was $896,000 outstanding under the WCL Promissory Note and $1,108,711 outstanding under the 2024 Promissory Note. The company has determined that the uncertainty surrounding its liquidity condition raises substantial doubt about its ability to continue as a going concern.

Coincheck Business Combination

On March 22, 2022, the company entered into a business combination agreement with Coincheck Group B.V., a Dutch private limited liability company, M1 Co G.K., a Japanese limited liability company, Coincheck Merger Sub, Inc., a Delaware corporation, and Coincheck, Inc., a Japanese joint stock company. The business combination agreement was amended on May 31, 2023 and May 28, 2024.

If the business combination agreement is approved by the company's stockholders, and the transactions contemplated by the agreement are consummated, (i) Coincheck equityholders will conduct a share exchange pursuant to which they will receive shares of PubCo and Coincheck will become a wholly owned subsidiary of PubCo and (ii) the company will merge with and into a wholly-owned subsidiary of PubCo, with the company continuing as the surviving corporation and a wholly owned subsidiary of PubCo, with company stockholders and warrantholders receiving identical numbers of securities of PubCo.

Extensions of Combination Period

The company initially had until July 2, 2023, 24 months from the closing of the initial public offering, to consummate its initial business combination. On June 21, 2023, the company held a special meeting of its stockholders at which its stockholders approved, among other things, an amendment to the company's amended and restated certificate of incorporation to extend the combination period from July 2, 2023 to July 2, 2024.

In connection with the vote to approve the charter amendment proposals, public stockholders holding 20,135,697 public shares properly exercised their right to redeem such public shares for cash at a redemption price of approximately $10.28 per share, for an aggregate redemption amount of approximately $207.1 million.

On June 26, 2024, the company held another special meeting of its stockholders at which its stockholders approved an amendment to further extend the combination period from July 2, 2024 to January 2, 2025. In connection with this vote, public stockholders holding 592,601 public shares properly exercised their right to redeem such public shares for cash at a redemption price of approximately $10.64 per share, for an aggregate redemption amount of approximately $6.3 million.

Nasdaq Listing

On October 24, 2023, the company received a letter from the Nasdaq Staff notifying the company that it was not in compliance with the Nasdaq Listing Rule 5450(a)(2), which requires the company to maintain at least 400 total holders for continued listing on the Nasdaq Global Market. The company submitted a plan to meet the requirements under the rule and on December 13, 2023, the Nasdaq Staff granted the company until April 22, 2024 to file documentation demonstrating that its common stock has a minimum of 400 total holders. The company submitted such documentation on April 17, 2024 and on April 26, 2024, the Nasdaq Staff confirmed the company's compliance with the rule.

Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022, signed into law on August 16, 2022, imposes a new 1% excise tax on certain stock repurchases by publicly traded U.S. companies, including the company. The company has recorded $2,133,974 and $2,070,896 of excise tax liability as of June 30, 2024 and December 31, 2023, respectively, related to the redemption of public shares.

Risks and Challenges

The company's business could be impacted by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond the company's control. These factors include downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability.

Additionally, the company's ability to complete an initial business combination may be adversely affected by the SEC's recently adopted rules and regulations for SPACs, which became effective on July 1, 2024. These new rules may materially affect the company's ability to negotiate and complete its initial business combination and may increase the costs and time related thereto.

Conclusion

Thunder Bridge Capital Partners IV, Inc. is a blank check company that is currently seeking to complete a business combination. The company faces significant liquidity challenges and substantial doubt about its ability to continue as a going concern. Investors should carefully consider the risks and uncertainties facing the company before making any investment decisions.