Alchemy Investments Acquisition 1(ALCY) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Condensed Financial Statements This section presents unaudited condensed financial statements, including balance sheets, statements of operations, changes in shareholders' deficit, cash flows, and detailed notes on accounting policies Condensed Balance Sheets Condensed Balance Sheets (in USD) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--------------------------------- | :------------------------ | :------------------ | | Total Assets | $12,503,259 | $12,098,428 | | Total Liabilities | $7,931,442 | $7,004,857 | | Shareholders' Deficit | $(7,580,432) | $(6,568,236) | | Investments held in Trust Account | $12,252,250 | $11,851,808 | Condensed Statements of Operations Condensed Statements of Operations (in USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating and formation costs | $321,051 | $279,191 | $722,490 | $443,016 | | Gain on investments held in Trust Account | $126,034 | $1,591,454 | $250,442 | $3,165,435 | | Net (loss) income | $(220,257) | $1,313,741 | $(521,753) | $2,727,570 | | Basic and diluted net income per share (redeemable Class A) | $(0.05) | $0.09 | $(0.12) | $0.18 | Condensed Statements of Changes in Shareholders' Deficit Condensed Statements of Changes in Shareholders' Deficit (in USD) | Metric | January 1, 2025 | June 30, 2025 | | :--------------------------------- | :---------------- | :-------------- | | Accumulated Deficit | $(6,568,584) | $(7,580,780) | | Total Shareholders' Deficit | $(6,568,236) | $(7,580,432) | | Metric | January 1, 2024 | June 30, 2024 | | :--------------------------------- | :---------------- | :-------------- | | Accumulated Deficit | $(5,361,185) | $(5,799,050) | | Total Shareholders' Deficit | $(5,360,837) | $(5,795,702) | - The accumulated deficit increased from $(6,568,584) at January 1, 2025, to $(7,580,780) at June 30, 2025, reflecting net losses and remeasurement of redeemable Class A ordinary shares[13] Condensed Statements of Cash Flows Condensed Statements of Cash Flows (in USD) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(619,969) | $(267,346) | | Proceeds from promissory note, related party | $600,000 | $530,000 | | Net Change in Cash and Cash Equivalents | $(19,969) | $262,654 | | Cash and Cash Equivalents - End of period | $161,205 | $572,396 | - Net cash used in operating activities increased significantly from $(267,346) in H1 2024 to $(619,969) in H1 2025[16] Notes to Unaudited Condensed Financial Statements NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN Alchemy Investments Acquisition Corp 1 is a blank check company formed to complete a business combination, facing going concern uncertainty due to insufficient working capital and a looming deadline - The Company is a blank check company (SPAC) incorporated on October 27, 2021, with the sole purpose of effecting a Business Combination[19] - As of June 30, 2025, the Company had $161,205 in cash outside the Trust Account and a working capital deficit of $2,505,433, raising substantial doubt about its ability to continue as a going concern[36][121][122] - The deadline for consummating a Business Combination was extended from November 9, 2024, to September 9, 2025, through shareholder approval and monthly deposits into the Trust Account[39][40][122][123] NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines the company's accounting policies, including GAAP conformity, EGC status, use of estimates, and classification of financial instruments like cash and redeemable Class A ordinary shares - The Company is an 'emerging growth company' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards, which may affect comparability with other public companies[43][45] - Investments held in the Trust Account, primarily U.S. Treasury securities, are classified as trading securities and presented at fair value, with gains/losses recognized in the statement of operations[48] - Class A Ordinary Shares subject to possible redemption are classified outside of permanent equity, with changes in redemption value recognized immediately and adjusted to equal the redemption value at each reporting period end[50][52] NOTE 3. INITIAL PUBLIC OFFERING The Company completed its Initial Public Offering on May 9, 2023, issuing 11,500,000 units and generating $115,000,000 in gross proceeds - Initial Public Offering (IPO) was consummated on May 9, 2023, issuing 11,500,000 units, including the over-allotment option[21][71] - The IPO generated gross proceeds of $115,000,000[21][71] - Each unit consisted of one Class A ordinary share and one-half of one redeemable warrant[71] NOTE 4. PRIVATE PLACEMENT Simultaneously with the IPO, the Company sold 595,500 private placement shares for $10.00 per share, generating $5,955,000 in gross proceeds - 595,500 Private Placement Shares were sold to the Sponsor and Underwriter at $10.00 per share, generating gross proceeds of $5,955,000[22][74] - Private Placement Shares are subject to transfer restrictions and holders waive redemption rights in connection with a Business Combination[75][76] NOTE 5. RELATED PARTY TRANSACTIONS The Company engaged in related party transactions, including Founder Shares, promissory notes from the Sponsor totaling $1,130,000, and a $10,000 monthly administrative support agreement - The Sponsor acquired 4,312,500 Founder Shares for $50,000, which have undergone surrenders and conversions, ultimately leading to Class A Ordinary Shares[77][78][82] Related Party Balances (in USD) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Promissory note - related party | $1,130,000 | $530,000 | | Accrued interest expenses - related party | $84,472 | $27,972 | | Accrued expenses - related party | $17,097 | $197,087 | - The Company pays Alchemy Investment Management LLC, an affiliate of the Sponsor, a monthly fee of $10,000 for administrative services[85] NOTE 6. COMMITMENTS AND CONTINGENCIES The Company has commitments including registration rights, a deferred underwriting fee of $5,175,000 payable upon business combination, and restrictions on Underwriter Shares - A deferred underwriting fee of $5,175,000 is payable to the Underwriter from the Trust Account upon completion of a Business Combination[90] - Underwriter Shares are subject to transfer restrictions and waiver of redemption rights in connection with a Business Combination[91] NOTE 7. SHAREHOLDERS' DEFICIT This note details authorized and outstanding shares for Preference, Class A, and Class B ordinary shares, highlighting the classification of Class A shares into redeemable and permanent equity Shareholders' Deficit Details | Share Type | Authorized Shares | Issued and Outstanding (June 30, 2025) | | :--------------------------------- | :---------------- | :------------------------------------- | | Preference shares | 1,000,000 | 0 | | Class A ordinary shares | 479,000,000 | 4,532,462 (1,061,963 redeemable, 3,470,499 permanent) | | Class B ordinary shares | 20,000,000 | 1 | NOTE 8. WARRANTS Public Warrants become exercisable after a business combination or 12 months from IPO, with an exercise price of $11.50 per share, subject to adjustments and potential redemption - Public Warrants become exercisable on the later of 30 days after a Business Combination or 12 months from the IPO closing, provided an effective registration statement is in place[95][97] - The Public Warrants have an exercise price of $11.50 per share, subject to adjustments based on future equity issuances or transfers below a Minimum Issue Price[98] - The Company may redeem outstanding warrants at $0.01 per warrant if the Class A Ordinary Share price equals or exceeds $18.00 for a specified period[99][100] - If a Business Combination is not completed, warrants will not receive funds from the Trust Account and may expire worthless[101] NOTE 9. FAIR VALUE MEASUREMENTS The Company's financial assets measured at fair value, primarily U.S. Treasury Securities in the Trust Account, are categorized as Level 1 within the fair value hierarchy Fair Value Measurements (in USD) | Description | Amount at Fair Value (June 30, 2025) | Level 1 | | :--------------------------------- | :--------------------------------- | :------ | | Investments held in Trust Account: U.S. Treasury Securities | $12,252,250 | $12,252,250 | | Description | Amount at Fair Value (December 31, 2024) | Level 1 | | :--------------------------------- | :--------------------------------- | :------ | | Investments held in Trust Account: U.S. Treasury Securities | $11,851,808 | $11,851,808 | NOTE 10. SEGMENT The Company operates as a single operating segment, with its Co-Chief Executive Officer reviewing 'Gain on investments held in Trust Account' and 'Operating and formation costs' to assess performance - The Company has determined it has only one operating segment, with the Co-Chief Executive Officer acting as the chief operating decision maker (CODM)[106][107] - Key metrics reviewed by the CODM include 'Gain on investments held in Trust Account' and 'Operating and formation costs' to manage shareholder value, investment strategy, and capital for business combination[107] NOTE 11. SUBSEQUENT EVENTS Subsequent to June 30, 2025, the Company entered into a business combination agreement with Cartiga, LLC, converting ALCY shares and warrants into Pubco securities - On August 22, 2025, the Company entered into a business combination agreement with Cartiga, LLC[108] - The agreement stipulates that ALCY shares and warrants will convert into an equal number of Pubco Class A Common Stock, Pubco Class B Common Stock, Pubco Preferred Stock, Pubco Units, and Pubco Warrants[109] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and operational results, highlighting its blank check status, net loss drivers, liquidity challenges, and key accounting policies Overview - Alchemy Investments Acquisition Corp 1 is a blank check company formed to pursue a business combination, with no operating revenues generated to date[112][113] Results of Operations Results of Operations (in USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income | $(220,257) | $1,313,741 | $(521,753) | $2,727,570 | | Operating costs | $321,051 | $279,191 | $722,490 | $443,016 | | Gain on investments held in Trust Account | $126,034 | $1,591,454 | $250,442 | $3,165,435 | | Dividend income | $3,010 | $1,478 | $6,795 | $5,151 | | Interest expense - related party | $(28,250) | — | $(56,500) | — | - The Company reported a net loss of $(220,257) for the three months ended June 30, 2025, compared to net income of $1,313,741 for the same period in 2024, primarily due to lower gains on investments held in the Trust Account and increased operating costs[114] Liquidity, Capital Resources and Going Concern Liquidity and Capital Resources (in USD) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(619,969) | $(267,346) | | Net cash provided by financing activities | $600,000 | $530,000 | | Cash and cash equivalents (outside Trust Account) | $161,205 | $572,396 | | Working capital deficit | $(2,505,433) | N/A | - The Company's cash outside the Trust Account ($161,205) and working capital deficit ($2,505,433) as of June 30, 2025, raise substantial doubt about its ability to continue as a going concern[121][122] - The deadline for completing a Business Combination was extended to September 9, 2025, with monthly deposits into the Trust Account to facilitate this extension[122][123] Contractual Obligations - The Company has $5,175,000 in deferred underwriting fees and $1,130,000 in promissory notes, both due upon the completion of a business combination[125] Off Balance Sheet Financing Arrangements - As of June 30, 2025, the Company has no obligations, assets, or liabilities considered off-balance sheet arrangements[126][127] Critical Accounting Policies and Estimates - Management has not identified any critical accounting estimates[129] Recent Accounting Standards - The Company does not believe that recently issued, but not yet effective, accounting standards (e.g., ASU 2024-03) would have a material effect on its financial statements if currently adopted[130][131] JOBS Act - As an 'emerging growth company' under the JOBS Act, the Company has elected to delay the adoption of new or revised accounting standards, which may impact comparability[132] - The Company is evaluating other reduced reporting requirements provided by the JOBS Act, such as exemptions from auditor's attestation reports on internal controls and certain executive compensation disclosures[134] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Alchemy Investments Acquisition Corp 1 is exempt from providing quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[135] Item 4. Controls and Procedures This section details the evaluation of the company's disclosure controls and procedures, management's report on internal controls, and any changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures - Management, with the participation of Certifying Officers, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[136] Management's Report on Internal Controls Over Financial Reporting - This report does not include a management's assessment or an independent registered public accounting firm's attestation report on internal control over financial reporting due to a transition period for newly public companies[137] Changes in Internal Control over Financial Reporting - There were no changes in the Company's internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[138] PART II - OTHER INFORMATION Item 1. Legal Proceedings Alchemy Investments Acquisition Corp 1 has no legal proceedings to report - There are no legal proceedings to report[139] Item 1A. Risk Factors This section updates the risk factors, noting no material changes except for a new risk related to potential default or failure of financial institutions providing banking services - No material changes to risk factors previously disclosed, except for a new risk concerning the default or failure of financial institutions the Company relies on[140][141] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details unregistered sales of equity securities, including founder shares and private placement shares, and confirms the use of proceeds from the initial public offering and private placement Unregistered Sales of Equity Securities - Founder shares were acquired by the Sponsor for $50,000, with subsequent surrenders and conversions, including 2,874,999 Class B shares converted to Class A shares on October 22, 2024[142][144] - 595,500 private placement shares were sold to the Sponsor and Underwriter for $10.00 per share, generating $5,955,000 in gross proceeds, under Section 4(a)(2) of the Securities Act[143] Use of Proceeds - After deducting underwriting discounts and offering expenses, $116,725,000 from the IPO and private placement was placed in the trust account[145] - There has been no material change in the planned use of proceeds from the initial public offering and the sale of placement shares[146] Item 3. Defaults Upon Senior Securities Alchemy Investments Acquisition Corp 1 reports no defaults upon senior securities - There are no defaults upon senior securities[147] Item 4. Mine Safety Disclosures Mine Safety Disclosures are not applicable to Alchemy Investments Acquisition Corp 1 - Mine Safety Disclosures are not applicable[148] Item 5. Other Information During the reporting period, none of the Company's directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading agreements - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading agreements during the six months ended June 30, 2025[149] Item 6. Exhibits This section lists all exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q, including organizational documents, agreements, and certifications - The report includes a comprehensive list of exhibits, such as the Amended and Restated Memorandum and Articles of Association, Warrant Agreement, Investment Management Trust Agreement, and various certifications[151][152] SIGNATURES The report is duly signed on behalf of Alchemy Investments Acquisition Corp 1 by its Co-Chief Executive Officer, Mattia Tomba, and Chief Financial Officer, Harshana Sidath Jayaweera, on August 27, 2025 - The report was signed by Mattia Tomba, Co-Chief Executive Officer, and Harshana Sidath Jayaweera, Chief Financial Officer, on August 27, 2025[157]