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Cactus Acquisition 1 (CCTS) - 2024 Q3 - Quarterly Report
CCTSCactus Acquisition 1 (CCTS)2024-11-15 21:00

Financial Position - As of September 30, 2024, the company had 13,000incashandaworkingcapitaldeficitof13,000 in cash and a working capital deficit of 858,000[108]. - As of September 30, 2024, approximately 13,000isavailableoutsideofthetrustaccountforworkingcapitalrequirements,raisingconcernsaboutoperationalsustainability[128].−Thecompanyhasnotgeneratedanyoperatingrevenuestodateandhasincurredincreasedexpensesrelatedtobeingapubliccompanyandduediligenceforpotentialbusinesscombinations[120].−Thecompanymayfaceinsufficientfundstooperatepriortotheinitialbusinesscombination,whichcouldleadtoaforcedliquidationofthetrustaccountwithin12months[128].−Thecompanyhasrequestedadditionalloansfromthirdpartiesbuthasnotsecuredanyfundingtodate,whichmayhindertheabilitytocompleteaninitialbusinesscombination[128].BusinessCombinationEfforts−ThecompanyenteredintoaBusinessCombinationAgreementwithTembo,withatotalconsiderationof13,000 is available outside of the trust account for working capital requirements, raising concerns about operational sustainability[128]. - The company has not generated any operating revenues to date and has incurred increased expenses related to being a public company and due diligence for potential business combinations[120]. - The company may face insufficient funds to operate prior to the initial business combination, which could lead to a forced liquidation of the trust account within 12 months[128]. - The company has requested additional loans from third parties but has not secured any funding to date, which may hinder the ability to complete an initial business combination[128]. Business Combination Efforts - The company entered into a Business Combination Agreement with Tembo, with a total consideration of 838 million to be paid entirely in newly issued ordinary shares valued at 10.00each[112].−Thecompanyintendstocompleteitsinitialbusinesscombinationbeforethemandatoryliquidationdatetoavoiddissolution[113].−ThecompanyhasbeenactivelyseekingpotentialbusinesscombinationtargetssinceitsIPOinNovember2021buthasnotyetfinalizedanyagreements[105].−Thecompanyplanstoapplyforup−listingontheNasdaqStockMarketuponcompletionofthebusinesscombinationwithTembo[119].ComplianceandRegulatoryIssues−ThecompanyreceivedanoticefromNasdaqregardingnon−compliancewiththeMVPHSRule,requiringaminimummarketvalueofpubliclyheldsharesof10.00 each[112]. - The company intends to complete its initial business combination before the mandatory liquidation date to avoid dissolution[113]. - The company has been actively seeking potential business combination targets since its IPO in November 2021 but has not yet finalized any agreements[105]. - The company plans to apply for up-listing on the Nasdaq Stock Market upon completion of the business combination with Tembo[119]. Compliance and Regulatory Issues - The company received a notice from Nasdaq regarding non-compliance with the MVPHS Rule, requiring a minimum market value of publicly held shares of 15 million, with a compliance deadline of November 4, 2024[113]. - On November 1, 2024, the company extended the mandatory liquidation date from November 2, 2024, to November 2, 2025, with 1,148,799 Class A ordinary shares redeemed, leaving 3,926,071 shares outstanding[116]. Financial Obligations and Risks - As of September 30, 2024, the company had issued a promissory note to ARWM Inc Pte. Ltd. for up to 500,000,withamaturitydateextendedtoJune30,2025[122].−Thecompanyisindiscussionstoextendthematuritydateofa500,000, with a maturity date extended to June 30, 2025[122]. - The company is in discussions to extend the maturity date of a 600,000 promissory note issued to Energi Holding Limited, which is also due on November 1, 2024[124]. - A significant percentage of public shareholders have elected to redeem their shares, potentially reducing cash resources and necessitating third-party financing for a successful business combination[129]. - There is no assurance that financing plans or the consummation of an initial business combination will be successful, given the current financial constraints[129]. Investment and Expenditure - The net proceeds from the initial public offering and private warrants are invested in U.S. government treasury bills with a maturity of 185 days or less, minimizing exposure to interest rate risk[133]. - The company has not entered into any off-balance sheet arrangements or commitments for capital expenditures as of September 30, 2024[130]. - The company does not have any current intention to pay commitment fees or fund "no-shop" provisions for target businesses, although it retains the option[126]. - The company is focused on identifying and evaluating target businesses, which involves significant costs that may exceed current estimates[128].