ALVARIUM TIEDEMANN A References in this Quarterly Report on Form 10-Q (this "Quarterly Report") to "we," "us" or the "Company" refer toCartesian Growth Corporation . References to our "management" or our "management team" refer to our officers and directors, and references to the "sponsor" refer to our sponsor,CGC Sponsor LLC , aCayman Islands limited liability company. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This quarterly report on Form
10-Q
(this "Quarterly Report") includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding our financial position, business strategy, the Proposed Business Combination, including expected timing to close the transaction, and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of our Annual Report on
Form 10-K for
the year ended
Overview
We are a blank check company incorporated on
We may pursue our initial business combination in any business industry or sector, however, we have focused on seeking high-growth businesses with proven or potential transnational operations or outlooks in order to capitalize on the experience, reputation, and network of our management team. Furthermore, we seek target businesses where we believe we will have an opportunity to drive ongoing value creation after our initial business combination is completed, as our management team has done with multiple investments over a wide range of sectors, industries and geographical locations.
We intend to effectuate our initial business combination using cash from the proceeds of the initial public offering, including the full exercise of the underwriters' over-allotment option, and the sale of the private placement warrants to our sponsor that occurred simultaneously with the consummation of the initial public offering (the "private placement"), our securities, debt or a combination of cash, securities and debt.
19
--------------------------------------------------------------------------------
Table of Contents
We have incurred, and in the event the Proposed Business Combination (as defined below) is not consummated, expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial business combination, including the Proposed Business Combination, will be successful.
Recent Developments
Proposed Business Combination
On
OnFebruary 11, 2022 , we, TWMH, the TIG Entities, Alvarium, Umbrella Merger Sub and Umbrella entered into Amendment No. 1 to the Business Combination Agreement, solely to (a) amend Section 12.01(b) of the Business Combination Agreement for the purpose of extending the Outside Date, as such term is used in the Business Combination Agreement, toJuly 29, 2022 and (b) amend the form of Registration Rights and Lock-up Agreement attached as Exhibit F of the Business Combination Agreement for the purpose of providing that the General Lock-up Period, as such term is used in the Business Combination Agreement, will be (i) for an amount equal to forty percent (40%) of the Lock-up Shares, as such term is used in the Business Combination Agreement, one year from the closing of the Business Combination (the "Closing"), (ii) for an amount equal to thirty percent (30%) of the Lock-up Shares, two years from the Closing and (iii) for an amount equal to thirty percent (30%) of the Lock-up Shares, three years from the Closing.
On
On
On
Amended and Restated Business Combination Agreement
Pursuant to the A&R Business Combination Agreement, among other things, (i)
prior to the closing of the A&R Business Combination Agreement, TWMH and the TIG
Entities will take, or cause to be taken, all actions necessary to implement a
reorganization such that TWMH and the TIG Entities shall be wholly owned direct
or indirect subsidiaries of Umbrella and Umbrella shall be owned solely by the
members of TWMH, the members of TIG GP and the members of TIG MGMT; (ii) prior
to the Closing, Alvarium will take, or cause to be taken, all actions necessary
to implement a reorganization such that Alvarium will be the wholly owned
indirect subsidiary of a newly formed Isle of Man entity ("Alvarium Topco"), and
Alvarium Topco will be owned solely by the shareholders of Alvarium; (iii) on
the business day prior to the Closing Date, we will domesticate as a corporation
formed under the laws of the
20
--------------------------------------------------------------------------------
Table of Contents
The consummation of the transactions contemplated by the Business Combination Agreement is subject to customary conditions, representations and warranties, covenants and closing conditions in the Business Combination Agreement, including, but not limited to, approval by our shareholders of the Business Combination Agreement, the effectiveness of a registration statement on Form S-4 (File No. 333-262644), which was initially filed with theSEC onFebruary 11, 2022 , in connection with the Proposed Business Combination, and other customary closing conditions, including the receipt of certain regulatory approvals. The transaction is expected to close materially before our mandatory liquidation date. The Company filed amendments to the Form S-4 with theSEC onMay 13, 2022 ,June 27, 2022 ,July 25, 2022 andAugust 8, 2022 . OnOctober 17, 2022 , theSEC declared effective the Form S-4 and the Company commenced mailing the definitive proxy statement/prospectus relating to the Company's extraordinary general meeting to be held onNovember 17, 2022 in connection with the Business Combination.
Subscription Agreements
Concurrently with the execution of the Business Combination Agreement, we
entered into subscription agreements (the "PIPE Subscription Agreements") with
certain investors (each a "PIPE Investor") to purchase, following the
Domestication, Class A Common Stock (such shares, collectively, "PIPE Shares")
in an aggregate value of
The closing of the sale of PIPE Shares (the "PIPE Closing") will occur immediately prior to the Closing. The PIPE Closing will be subject to customary conditions, including, but not limited to:
i. all representations and warranties of us and the PIPE Investor contained
in the relevant PIPE Subscription Agreement will be true and correct in
all material respects (other than representations and warranties that are
qualified as to materiality or Material Adverse Effect (as defined in the
PIPE Subscription Agreements), which representations and warranties will
be true in all respects) at, and as of, the PIPE Closing;
ii. all conditions precedent to the Closing will have been satisfied or
waived; and
iii. without the consent of the PIPE Investor, the Business Combination
Agreement cannot be amended, modified or waived in a manner that
reasonably would be expected to materially and adversely affect the
economic benefits the PIPE Investor reasonably would expect to receive
under the PIPE Subscription Agreement.
Pursuant to the PIPE Subscription Agreements, we agreed that, within 45 calendar
days after the consummation of the Proposed Business Combination, we will file
with the
Each PIPE Subscription Agreement will terminate upon the earlier to occur of (i) such date and time as the Business Combination Agreement is terminated in accordance with its terms, (ii) upon the mutual written agreement of each of the parties to the PIPE Subscription Agreement; or (iii) if any of the conditions to PIPE Closing set forth in Sections 3.2 and 3.3 of such PIPE Subscription Agreement are not satisfied on or prior to the Closing Date and, as a result thereof, the transactions contemplated by such PIPE Subscription Agreement are not consummated at the PIPE Closing.
On
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities through
21
--------------------------------------------------------------------------------
Table of Contents
For the three months ended
For the nine months ended
For the three months ended
For the nine months ended
Liquidity, Capital Resources and Going Concern Consideration
Until the consummation of the initial public offering, our only source of
liquidity was an initial subscription of Class B ordinary shares, par value
On
Following the initial public offering, including the full exercise of the
over-allotment option and the private placement, a total of
As of
As of
22
--------------------------------------------------------------------------------
Table of Contents
In order to fund working capital deficiencies or finance transaction costs in
connection with an initial business combination, our initial shareholders,
officers, directors or their affiliates may, but are not obligated to, loan us
funds from time to time as may be required. If we complete an initial business
combination, we would repay such loaned amounts out of the proceeds of the trust
account released to us. In the event that an initial business combination does
not close, we may use a portion of the working capital held outside the trust
account to repay such loaned amounts but no proceeds from the trust account
would be used to repay such loaned amounts. Up to
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination, in which case we may issue additional securities or incur debt in connection with such initial business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of an initial business combination. If we are unable to complete an initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
As of the date of this Quarterly Report, we are within 12 months of our
mandatory liquidation date of
Although we believe that the Proposed Business Combination will occur, our liquidation requirement discussed in the preceding paragraph raises substantial doubt about our ability to continue as a going concern through one year from the date these unaudited condensed financial statements were issued if the Proposed Business Combination is not consummated. Our unaudited condensed financial statements included elsewhere in this Quarterly Report do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.
Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as ofSeptember 30, 2022 andDecember 31, 2021 .
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or other long-term
liabilities, other than an agreement to pay the sponsor a monthly fee of
The underwriters of the initial public offering are entitled to a deferred
underwriting commission of
23
--------------------------------------------------------------------------------
Table of Contents
Critical Accounting Policies
The preparation of unaudited condensed financial statements and related
disclosures in conformity with accounting principles generally accepted in
Warrant Liabilities
We account for Warrants (which are discussed in Note 3, Note 4 and Note 9 to the unaudited condensed financial statements included elsewhere in this Quarterly Report) in accordance with theFinancial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") Topic 815-40, "Derivatives and Hedging, Contracts in Entity's Own Equity"(ASC "815-40"), and concluded that a provision in the warrant agreement related to certain tender or exchange offers precludes the warrants from being accounted for as components of equity. As the warrants meet the definition of a derivative as contemplated in ASC 815-40, the warrants are recorded as derivative liabilities and measured at fair value at inception (on the date of the initial public offering) and at each reporting date in accordance with FASB ASC Topic 820, "Fair Value Measurement," with changes in fair value recognized in the condensed statements of operations in the period of change.
Offering Costs Associated with the Initial Public Offering
We comply with the requirements of FASB ASC 340-10-S99-1. Offering costs consisted of legal fees, accounting fees, underwriting fees and other costs incurred through the initial public offering that were directly related to the initial public offering. Offering costs are allocated to the separable financial instruments issued in the initial public offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with warrant liabilities are expensed as incurred, presented as non-operating expenses in the condensed statements of operations. Offering costs associated with the Class A ordinary shares were charged to temporary equity upon the completion of the initial public offering.
Class A Ordinary Shares Subject to Possible Redemption
All of the 34,500,000 Class A ordinary shares contain a redemption feature which allows for the redemption of such Class A ordinary shares in connection with our liquidation, if there is a shareholder vote or tender offer in connection with an initial business combination and in connection with certain amendments to our amended and restated memorandum and articles of association. In accordance withSEC and its staff's guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within our control require ordinary shares subject to redemption to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity's equity instruments, are excluded from the provisions of FASB ASC 480. Accordingly, atSeptember 30, 2022 andDecember 31, 2021 , all Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders' deficit section of our condensed balance sheets.
We recognize changes in redemption value immediately as they occur and adjust the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
Net (Loss) Income Per Ordinary Share
We comply with the accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share," pursuant to which net (loss) income per share is computed by dividing net (loss) income by the weighted average number of ordinary shares outstanding during the period. We have two classes of shares, Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. We have not considered the effect of the 20,400,000 ordinary shares underlying the 11,500,000 warrants sold in the initial public offering and the 8,900,000 private placement warrants sold in the private placement, in the calculation of diluted (loss) income per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted net (loss) income per ordinary share is the same as basic net (loss) income per ordinary share for the periods presented.
24
--------------------------------------------------------------------------------
Table of Contents
Our condensed statements of operations apply the two-class method in calculating net (loss) income per share. Basic and diluted net (loss) income per Class A ordinary share and Class B ordinary share is calculated by dividing net (loss) income attributable to us by the weighted average number of Class A ordinary shares and Class B ordinary shares outstanding, allocated proportionally to each class of shares.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.
© Edgar Online, source
