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Cactus Acquisition 1 (CCTS) - 2024 Q4 - Annual Report
CCTSCactus Acquisition 1 (CCTS)2025-04-15 20:45

IPO and Fundraising - The company completed its initial public offering on November 2, 2021, selling 12,650,000 units and generating gross proceeds of 126.5million[57].−Aprivatesaleof4,866,667privatewarrantswascompletedconcurrentlywiththeIPO,generatinganadditional126.5 million[57]. - A private sale of 4,866,667 private warrants was completed concurrently with the IPO, generating an additional 7.3 million[58]. - As of April 15, 2025, the trust fund holds 9.08million,whichmaydecreaseduetoshareholderredemptions[65].−ThenetproceedsfromtheinitialpublicofferingandthesaleofprivatewarrantsareinvestedinU.S.governmenttreasurybillsormoneymarketfunds,minimizingexposuretointerestraterisk[315].BusinessCombinationAgreement−ThecompanyenteredintoaBusinessCombinationAgreementwithTemboe−LVB.V.onAugust29,2024,involvingamulti−steptransactiontobecomepubliclytraded[60].−TheBusinessCombinationAgreementincludesgovernanceprovisionsandcustomarylock−uparrangementsforHoldcoshares[61].−Thetransactionisstructuredtoqualifyasatax−freereorganizationunderSection351oftheU.S.InternalRevenueCode[61].−ThecompanyengagedGeminiValuationServices,LLCtoprovideafairnessopinionontheproposedtransaction,concludingitisfairtoCCTSFanditssecurityholders[68].−ThecompanywillrelysolelyonTemboe−LVB.V.foritsfutureperformancepost−combination,indicatingalackofbusinessdiversification[70].ShareholderRedemptionandLiquidation−Shareholdersmayredeemtheirsharesfortheirproratashareofthetrustaccountuponapprovalofthebusinesscombination[79].−Iftheinitialbusinesscombinationisnotcompleted,thecompanywillredeempublicsharesataper−sharepricebasedontheaggregateamountinthetrustaccount,whichisapproximately9.08 million, which may decrease due to shareholder redemptions[65]. - The net proceeds from the initial public offering and the sale of private warrants are invested in U.S. government treasury bills or money market funds, minimizing exposure to interest rate risk[315]. Business Combination Agreement - The company entered into a Business Combination Agreement with Tembo e-LV B.V. on August 29, 2024, involving a multi-step transaction to become publicly traded[60]. - The Business Combination Agreement includes governance provisions and customary lock-up arrangements for Holdco shares[61]. - The transaction is structured to qualify as a tax-free reorganization under Section 351 of the U.S. Internal Revenue Code[61]. - The company engaged Gemini Valuation Services, LLC to provide a fairness opinion on the proposed transaction, concluding it is fair to CCTSF and its security holders[68]. - The company will rely solely on Tembo e-LV B.V. for its future performance post-combination, indicating a lack of business diversification[70]. Shareholder Redemption and Liquidation - Shareholders may redeem their shares for their pro rata share of the trust account upon approval of the business combination[79]. - If the initial business combination is not completed, the company will redeem public shares at a per-share price based on the aggregate amount in the trust account, which is approximately 11.12 per share[88]. - The redemption process incurs a nominal fee of 45.00chargedbythetransferagent,whichmaybepassedontoshareholdersbytheirbrokers[81].−Shareholderscanwithdrawtheirredemptionrequestsatanytimeuptothevoteontheproposedbusinesscombination[83].−Thecompanywillceaseoperationsandliquidateifitcannotcompletetheinitialbusinesscombinationbytheendofthecombinationperiod[85].−Theoriginalsponsorandotherinitialshareholdershavewaivedtheirrightstoliquidatingdistributionsfromthetrustaccountconcerningtheirfounderssharesiftheinitialbusinesscombinationfails[86].−Thecompanyexpectstofundcostsassociatedwithdissolutionfrom45.00 charged by the transfer agent, which may be passed on to shareholders by their brokers[81]. - Shareholders can withdraw their redemption requests at any time up to the vote on the proposed business combination[83]. - The company will cease operations and liquidate if it cannot complete the initial business combination by the end of the combination period[85]. - The original sponsor and other initial shareholders have waived their rights to liquidating distributions from the trust account concerning their founders shares if the initial business combination fails[86]. - The company expects to fund costs associated with dissolution from 10,000 held outside the trust account and potentially up to 100,000ofaccruedinterest[87].−Thereisnoguaranteethattheactualper−shareredemptionamountwillnotbesubstantiallylessthan100,000 of accrued interest[87]. - There is no guarantee that the actual per-share redemption amount will not be substantially less than 11.12 due to potential creditor claims against the trust account[88]. - The company may face claims from creditors that could deplete the trust account, affecting the redemption price for shareholders[95]. - Shareholders will only receive funds from the trust account upon specific conditions, including the completion of the initial business combination or the inability to complete it by the deadline[96]. - If the initial business combination is not completed by the end of the combination period, the company will terminate its existence and distribute all amounts in its trust account[100]. - The anticipated redemption price for public shares is approximately $11.12 per share, including interest, which is net of taxes payable[102]. Compliance and Internal Controls - The company is required to evaluate its internal control procedures for the fiscal year ended December 31, 2024, as mandated by the Sarbanes-Oxley Act[112]. - The company may face increased costs and time commitments to achieve compliance with internal control requirements post-closing[112]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[113]. Competition and Conflicts of Interest - The company faces intense competition from entities with greater financial resources and local industry knowledge, which may limit its ability to acquire sizable target businesses[103]. - Certain executive officers and directors have fiduciary duties to other companies, which may create potential conflicts of interest during the business combination process[104].