Clover Leaf Capital Corp., a special purpose acquisition company (SPAC), has been notified by the Nasdaq Stock Market LLC of its non-compliance with certain listing requirements, which could lead to the delisting of the company's securities. The notice, received on Monday, July 23, 2024, pointed out Clover Leaf's failure to complete a business combination within the mandated 36-month period following its initial public offering, as per Nasdaq IM-5101-2.
Previously, on August 31, 2023, Clover Leaf was informed that it did not meet the minimum public holders requirement for The Nasdaq Capital Market, and on January 23, 2024, it received a notice for not holding an annual meeting of shareholders within twelve months of the fiscal year-end. Further, on February 27, 2024, Clover Leaf could not demonstrate compliance with the minimum public holders requirement, leading to a March 1, 2024, notice of possible suspension and delisting.
Clover Leaf requested a hearing with the Nasdaq Hearings Panel, which took place on May 7, 2024. On June 5, 2024, the panel granted a conditional extension for Clover Leaf's listing, subject to the completion of a business combination with Kustom Entertainment by August 28, 2024, and compliance with all initial listing criteria.
This development is part of a broader narrative in which Clover Leaf is working towards a business combination with Kustom Entertainment, as detailed in a proxy statement and registration statement filed with the SEC. The proposed merger is subject to approval by Clover Leaf stockholders and other customary closing conditions.
In other recent news, Clover Leaf Capital Corp. has made significant strides in its merger plans and financial obligations. The company has extended its initial business combination deadline to October 22, 2024, allowing additional time to finalize its merger with Kustom Entertainment, Inc. Adjustments to financial obligations include a promissory note issued to Yntegra Capital Investments and a monthly deposit of $41,575.86 into a trust account until the new deadline or the completion of the initial business combination.
Furthermore, Clover Leaf has amended its merger agreement with Kustom Entertainment, extending the deadline to August 30, 2024. The terms of their Lock-Up Agreement with Digital Ally (NASDAQ:DGLY), Inc., Kustom Entertainment's sole stockholder, were also revised, reducing the percentage of Clover Leaf Class A common stock subject to the lock-up.
The company also secured a conditional extension for its Nasdaq listing, contingent on the successful merger with Kustom Entertainment by August 2024. This development came after Clover Leaf appealed to Nasdaq's Hearings Panel due to non-compliance with certain listing requirements. These are the latest developments in Clover Leaf's ongoing efforts to maintain its Nasdaq listing and complete a successful merger.
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