Alchemy Investments Acquisition 1(ALCY) - 2024 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Condensed Financial Statements This section presents the unaudited condensed financial statements for Alchemy Investments Acquisition Corp 1 Condensed Balance Sheets Total assets increased due to growth in the Trust Account, while the total shareholders' deficit widened | Metric | March 31, 2024 (Unaudited) | December 31, 2023 | | :-------------------------------- | :--------------------------- | :------------------ | | Cash and cash equivalents | $129,211 | $309,742 | | Investments held in Trust Account | $122,238,546 | $120,664,565 | | Total Assets | $122,623,558 | $121,215,705 | | Total Liabilities | $6,006,002 | $6,011,978 | | Total Shareholders' Deficit | $(5,520,989) | $(5,360,837) | Condensed Statements of Operations The company reported a significant net income for Q1 2024, driven by gains on investments held in the Trust Account | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Operating costs | $163,825 | $221 | | Loss from operations | $(163,825) | $(221) | | Gain on investments held in Trust Account | $1,573,981 | — | | Dividend income | $3,673 | — | | Net income (loss) | $1,413,829 | $(221) | | Basic and diluted net income per share (Class A ordinary shares-redeemable) | $0.09 | — | Condensed Statements of Changes in Shareholders' Equity (Deficit) The shareholders' deficit widened in Q1 2024 due to the remeasurement of Class A ordinary shares to their redemption amount | Metric | January 1, 2024 | March 31, 2024 | | :------------------------------------ | :-------------- | :------------- | | Accumulated Deficit | $(5,361,185) | $(5,521,337) | | Total Shareholders' Deficit | $(5,360,837) | $(5,520,989) | Changes for Three Months Ended March 31, 2024: * Remeasurement of Class A ordinary shares to redemption amount: $(1,573,981) * Net income: $1,413,829 | Metric | January 1, 2023 | March 31, 2023 | | :------------------------------------ | :-------------- | :------------- | | Accumulated Deficit | $(8,750) | $(8,971) | | Total Shareholder's Equity | $41,250 | $41,029 | Changes for Three Months Ended March 31, 2023: * Net loss: $(221) Condensed Statements of Cash Flows The company experienced net cash used in operating activities, resulting in a decrease in cash and cash equivalents | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income (loss) | $1,413,829 | $(221) | | Gain on investments held in trust account | $(1,573,981) | — | | Net cash (used in) provided by operating activities | $(180,531) | $4,779 | | Cash and cash equivalents - End of period | $129,211 | $4,779 | Notes to Unaudited Condensed Financial Statements These notes provide crucial context for the condensed financial statements, detailing accounting policies and transactions NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN The company is a blank check company facing a going concern uncertainty due to limited cash and a looming business combination deadline - The Company is a blank check company incorporated on October 27, 2021, for the purpose of entering into a business combination[18] - The Initial Public Offering (IPO) was consummated on May 9, 2023, generating gross proceeds of $115,000,000 from 11,500,000 units[20] - An amount of $116,725,000 from the IPO and private placement proceeds was placed in a Trust Account, to be invested in U.S. government treasury obligations or money market funds[23] - As of March 31, 2024, the Company had $129,211 in cash outside the Trust Account and a working capital deficit of $461,692, raising substantial doubt about its ability to continue as a going concern[36] - The Company has until November 9, 2024, to consummate a Business Combination, after which it will face mandatory liquidation if unsuccessful[38] NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines key accounting principles, including GAAP conformity and policies for specific financial instruments - 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[41][45] - Investments held in the Trust Account are classified as trading securities and measured at fair value, with gains and losses recognized in the statements of operations[48] - Class A Ordinary Shares subject to possible redemption are classified outside of permanent equity and adjusted to redemption value at each reporting period[50][53] - The Company accounts for Public and Private Warrants as equity-classified instruments, with no subsequent changes in fair value recognized[68][105] - The Company is assessing the impact of ASU 2020-06 and ASU 2023-09 but does not believe any recently issued standards would have a material effect if currently adopted[71][72][73] NOTE 3. INITIAL PUBLIC OFFERING The Company completed its IPO in May 2023, issuing 11,500,000 units and generating gross proceeds of $115,000,000 - IPO consummated on May 9, 2023, with 11,500,000 units sold[74] - Gross proceeds from IPO: $115,000,000[74] - Each unit comprised one Class A ordinary share and one-half of one redeemable warrant[74] NOTE 4. PRIVATE PLACEMENT The Company sold 595,500 Private Placement Shares to its Sponsor and Underwriter, generating $5,955,000 in proceeds - 595,500 Private Placement Shares sold to Sponsor and Underwriter at $10.00 per share[75] - Gross proceeds from private placement: $5,955,000[75] - Private Placement Shares are subject to transfer restrictions and waivers of redemption/liquidation rights by holders in certain scenarios[76][79] NOTE 5. RELATED PARTY TRANSACTIONS This note details transactions with related parties, including Founder Shares, promissory notes, and service agreements - Founder Shares: Initially 4,312,500 shares issued to the Sponsor for $50,000; subsequently reduced to 2,875,000 shares through surrenders and cancellations[80][81] - Promissory Note: Sponsor loaned up to $500,000 to the Company, which was fully repaid on May 9, 2023[83][86] - Administrative Support Agreement: Company pays an affiliate a monthly fee of $10,000 for services; $107,097 accrued as of March 31, 2024[87] - Working Capital Loans: Sponsor or affiliates may provide loans for transaction costs, convertible into shares at $10.00 per share[88] NOTE 6. COMMITMENTS AND CONTINGENCIES The Company has commitments for registration rights and a deferred underwriting fee of $5,175,000 - Holders of Founder Shares, Private Placement Shares, and Working Capital Loan shares are entitled to registration rights[89] - Deferred underwriting commissions: $5,175,000 payable to the Underwriter upon completion of a Business Combination[91] - Underwriter Shares: 57,500 Class A ordinary shares purchased by underwriters, subject to transfer restrictions and waivers of redemption/liquidation rights[92][95] NOTE 7. SHAREHOLDERS' EQUITY (DEFICIT) This note details the Company's authorized and outstanding share capital, including preference and ordinary shares - Authorized Preference shares: 1,000,000; none issued or outstanding[96] - Class A ordinary shares: 479,000,000 authorized; 12,095,500 issued and outstanding, including 11,500,000 subject to possible redemption[97] - Class B ordinary shares: 20,000,000 authorized; 2,875,000 issued and outstanding as of March 31, 2024[98] NOTE 8. WARRANTS The Company's Public Warrants have an exercise price of $11.50 per share and may be redeemed under specific conditions - Public Warrants become exercisable on the later of 30 days after a Business Combination or 12 months from the IPO closing[99] - Exercise price: $11.50 per share, subject to adjustments[101] - Redemption: Warrants may be redeemed at $0.01 per warrant if Class A Ordinary Share price equals or exceeds $18.00 for a specified period[102] - The 5,750,000 Public Warrants are equity-classified and not subject to fair value changes after initial measurement[105] NOTE 9. FAIR VALUE MEASUREMENTS Investments held in the Trust Account, primarily U.S. Treasury Securities, are measured at fair value using Level 1 inputs | Description | Amount at Fair Value (March 31, 2024) | Level 1 | | :-------------------------- | :------------------------------------ | :-------- | | U.S. Treasury Securities | $122,238,546 | $122,238,546 | | Description | Amount at Fair Value (December 31, 2023) | Level 1 | | :-------------------------- | :------------------------------------ | :-------- | | U.S. Treasury Securities | $120,664,565 | $120,664,565 | NOTE 10. SUBSEQUENT EVENTS The Company identified no subsequent events requiring adjustment or disclosure in the financial statements - No subsequent events requiring adjustment or disclosure were identified up to the date of financial statement issuance[108] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the Company's financial condition, operational results, liquidity challenges, and going concern uncertainty Special Note Regarding Forward-Looking Statements This section cautions that the report contains forward-looking statements involving risks and uncertainties - The report includes forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially[111] - The Company disclaims any intention or obligation to update or revise forward-looking statements[111] Overview The Company is a blank check company formed to execute a business combination and has not yet identified a target - Alchemy Investments Acquisition Corp 1 is a blank check company formed on October 27, 2021, to pursue a business combination[112] - The Company has not yet selected a business combination target[112] Results of Operations The Company reported a net income of $1,413,829 for Q1 2024, driven by gains on investments in the Trust Account | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (loss) | $1,413,829 | $(221) | | Operating costs | $163,825 | $221 | | Gain on investments held in Trust Account | $1,573,981 | — | Liquidity, Capital Resources and Going Concern A working capital deficit and limited cash raise substantial doubt about the Company's ability to continue as a going concern - Net cash used in operating activities was $180,531 for the three months ended March 31, 2024[116] - As of March 31, 2024, the Company had $129,211 in cash outside the Trust Account and a working capital deficit of $461,692[120] - Substantial doubt exists about the Company's ability to continue as a going concern due to insufficient operating cash and the November 9, 2024, deadline for a business combination[121] Contractual Obligations The Company has no long-term debt but has a deferred underwriting fee of $5,175,000 contingent on a business combination - No long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities as of March 31, 2024[122] - Deferred underwriting fees of $5,175,000 are payable upon the completion of a business combination[123] Critical Accounting Policies and Estimates The Company has not identified any critical accounting estimates, though management makes estimates in preparing financial statements - Management makes estimates and assumptions in preparing financial statements[124][125] - The Company has not identified any critical accounting estimates[126] Recent Accounting Standards The Company is evaluating new accounting standards but does not anticipate a material effect on its financial statements - The Company is assessing ASU 2020-06 and ASU 2023-09[127][128] - Management does not believe that any recently issued, but not yet effective, accounting standards would have a material effect if currently adopted[129] JOBS Act As an "emerging growth company," the Company benefits from relaxed reporting and accounting adoption requirements - The Company qualifies as an "emerging growth company" under the JOBS Act[130] - The Company elects to delay the adoption of new or revised accounting standards, aligning with private company effective dates[130] - Exemptions include not requiring an auditor's attestation report on internal controls and reduced executive compensation disclosure[131] Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company is not required to provide market risk disclosures as it is a smaller reporting company - The Company is a smaller reporting company and is not required to provide market risk disclosures[133] Item 4. Controls and Procedures Management concluded that the Company's disclosure controls and procedures were effective as of March 31, 2024 - Disclosure controls and procedures were effective as of March 31, 2024[134] - This report does not include a management's assessment or auditor's attestation report on internal control over financial reporting due to a transition period for newly public companies[135] - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[136] PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Alchemy Investments Acquisition Corp 1 reports no legal proceedings - There are no legal proceedings[137] ITEM 1A. RISK FACTORS The Company highlights a new risk concerning its dependence on financial institutions - No material changes to risk factors disclosed in the Prospectus, except for an additional risk[138] - New risk factor: Dependence on U.S. and multi-national financial institutions, with potential adverse effects on business and financial condition if these institutions default or fail[139] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS This section details unregistered share sales and confirms the allocation of IPO proceeds to the trust account - Founder shares were acquired by the sponsor for $50,000, with subsequent cancellations reducing the total outstanding[140] - 595,500 Private Placement Shares were sold to the sponsor and representative for $10.00 per share, generating $5,955,000 in gross proceeds[141] - $116,725,000 of net proceeds from the IPO and private placement were placed in the trust account[143] - No material change in the planned use of proceeds from the IPO and private placement[144] ITEM 3. DEFAULTS UPON SENIOR SECURITIES The Company reports no defaults upon senior securities - There are no defaults upon senior securities[145] ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to the Company - Mine Safety Disclosures are not applicable[146] ITEM 5. OTHER INFORMATION No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the quarter - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading agreements during the quarter[147] ITEM 6. EXHIBITS This section lists all exhibits filed as part of this Quarterly Report on Form 10-Q - The report includes various exhibits such as Amended and Restated Memorandum and Articles of Association, Warrant Agreement, Investment Management Trust Agreement, and certifications[149] SIGNATURES The report was duly signed by the Co-Chief Executive Officer and Chief Financial Officer on May 20, 2024 - Report signed by Mattia Tomba (Co-Chief Executive Officer) and Harshana Sidath Jayaweera (Chief Financial Officer) on May 20, 2024[154]