Cactus Acquisition 1 (CCTS) - 2025 Q1 - Quarterly Report

PART I Financial Statements The company reported a $0.078 million net loss for the quarter ended March 31, 2025, with $9.22 million in assets and a $2.24 million capital deficiency, sustained by financing activities while pursuing a business combination Unaudited Condensed Balance Sheets As of March 31, 2025, total assets were $9.22 million, with $9.08 million in trust, resulting in a $2.24 million capital deficiency Condensed Balance Sheet Data (in thousands USD) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $21 | $8 | | Cash held in trust account | $9,075 | $8,980 | | Total Assets | $9,222 | $9,184 | | Liabilities & Capital | | | | Total Current Liabilities | $2,389 | $2,273 | | Class A Ordinary Shares Subject to Possible Redemption | $9,075 | $8,980 | | Total Capital Deficiency | ($2,242) | ($2,069) | | Total Liabilities, Shares Subject to Redemption and Capital Deficiency | $9,222 | $9,184 | Unaudited Condensed Statement of Operations The company reported a net loss of $0.078 million for the three months ended March 31, 2025, a decline from $0.037 million net earnings in the prior year, driven by increased expenses and reduced interest income Condensed Statement of Operations (in thousands USD) | Account | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Interest Earned on Trust Account | $95 | $277 | | Operating Expenses | ($143) | ($240) | | Financial Expenses | ($30) | $0 | | Net Earnings (Loss) | ($78) | $37 | Unaudited Condensed Statement of Cash Flows Net cash provided by operating activities was $0.033 million, a reversal from the prior year, with financing activities providing $0.075 million, increasing total cash to $9.096 million Condensed Statement of Cash Flows (in thousands USD) | Category | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $33 | ($614) | | Net cash provided by financing activities | $75 | $890 | | Net Change in Cash | $108 | $276 | | Cash at end of period | $9,096 | $21,515 | Notes to Condensed Financial Statements Notes detail the company's blank check status, Business Combination Agreement with Tembo e-LV B.V., extended liquidation date, Nasdaq delisting, and reliance on sponsor funding, raising going concern doubts - The company is a blank check company that has altered its search focus from Israeli healthcare technology to global emerging technology companies, particularly in the energy renewables sector, following a change in sponsorship[34] - On August 29, 2024, the Company signed a Business Combination Agreement (BCA) with Tembo e-LV B.V., with consideration of $838 million to be paid entirely in newly issued shares of the combined company valued at $10.00 per share[45] - The company's mandatory liquidation date has been extended to November 2, 2025, which, along with funding needs, raises substantial doubt about its ability to continue as a going concern[46][47] - The company was delisted from Nasdaq on November 5, 2024, for not completing an initial business combination within the required timeframe, and its securities now trade on the OTC market under the symbol CCTSF[50][51] - The company has undergone multiple sponsor changes, with the original sponsor, Cactus LP, transferring 80% of its securities to EVGI Limited in February 2024, and EVGI subsequently transferring 100% of its holdings to ARWM Pte Limited in May 2024[37][38][74] Management's Discussion and Analysis of Financial Condition and Results of Operations The company faces significant liquidity issues with a $2.24 million working capital deficit, relying on sponsor loans to fund operations while pursuing a business combination with Tembo e-LV B.V. after its Nasdaq delisting - The company has a definitive Business Combination Agreement with Tembo e-LV B.V., with consideration valued at $838 million, payable in shares of the new combined entity[93] - The company was delisted from Nasdaq on November 5, 2024, and now trades on the OTC market, with an intent to apply for relisting on Nasdaq upon completion of the business combination[100] - The deadline to consummate a business combination was extended to November 2, 2025, leading to the redemption of 1,148,799 Class A shares and the distribution of $13.4 million from the trust account[101][102] - The company has significant liquidity issues, with only $0.021 million in its operating account and a working capital deficit of $2.24 million as of March 31, 2025, relying on loans from sponsors and third parties to fund operations[91][107] - VivoPower, Tembo's parent company, received a non-binding proposal from Energi Holdings for a strategic acquisition of 51% of Tembo, based on a $200 million enterprise value, and Energi has also provided a $0.6 million promissory note to the company[97][98] Quantitative and Qualitative Disclosures About Market Risk The company's market risk is minimal, primarily limited to interest rate risk on short-term trust account investments, which are not expected to have material exposure to fluctuations - Proceeds from the IPO held in the trust account are invested in U.S. government treasury bills with maturities of 185 days or less or in money market funds compliant with Rule 2a-7[118] - Due to the short-term nature of these investments, management believes there is no material exposure to interest rate risk[118] Controls and Procedures Management identified a material weakness in internal controls due to insufficient qualified personnel and inadequate segregation of duties, rendering disclosure controls ineffective - Management concluded that disclosure controls and procedures were not effective as of December 31, 2024[120] - A material weakness was identified due to an insufficient number of qualified finance and accounting personnel, resulting in inadequate segregation of duties and increasing the risk of financial misstatements[123] - As of March 31, 2025, management has not remediated the material weakness, with planned corrective actions including enhanced review procedures and evaluating the need for additional personnel[121][124] PART II Legal Proceedings The company reports no legal proceedings - None[128] Risk Factors No material changes to previously disclosed risk factors have occurred - There have been no material changes with respect to the risk factors disclosed in our 2024 Annual Report[129] Cybersecurity As a blank check company, it relies on third-party digital technologies and lacks internal cybersecurity resources, posing potential financial loss risks - The company has no operations of its own and relies on third-party digital technologies, making it vulnerable to security breaches in those systems[131] - The company lacks sufficient resources and dedicated personnel to adequately protect against, investigate, or remediate cybersecurity incidents[131] Unregistered Sales of Equity Securities and Use of Proceeds No new information regarding unregistered sales of equity securities has been reported - Nothing that has not been previously reported[132] Other Items The company reports no unresolved staff comments, defaults, or other material information for the period - Item 1B. Unresolved Staff Comments: None[130] - Item 3. Defaults Upon Senior Securities: None[133] - Item 4. Mine Safety Disclosures: Not applicable[134] - Item 5. Other Information: None[135]