美國
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華盛頓特區20549
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截至季度結束
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(成立州或其他管轄區) | 編號) |
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(總部辦公地址) | (郵遞區號) |
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( (註冊人電話號碼，包括區號) 拉丁美洲增長特殊目的收購公司（SPAC） （如果自上次報告以來更改了前名或前地址） 根據法案第12(b)條註冊的證券： | |
每種類別的名稱 |
| 交易標的（s） |
| 每個註冊交易所的名稱 |
The | ||||
The |
請勾選表示是否以下事項：(1)在過去12個月內（或者登記者需要提交這些報告的較短期間），已依據1934年證券交易所法第13或15(d)條的規定提交所有需要提交的報告；以及(2)在過去90天內已經受到這些報告要求的影響。
☒ 不☐
請勾選表示是否以下事項：在過去12個月內（或者登記者需要提交這些文件的較短期間），已根據S-t法規第405條（本章節第232.405條）要求提交每個互動數據文件。 ☒ NO ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 120億2 of the Exchange Act.:
大型快速申報者☐ | 加速披露人☐ |
小型報告公司 | |
| 新興成長型公司 |
如果一家新興成長公司，當公司選擇不使用根據《交易所法》第13(a)條提供的任何新的或修訂後的財務會計準則的延長過渡期時，請勾選。
勾選是否登記人為外殼公司（根據《交易所法》120億2條定義）。是
截至2024年11月12日，存在
第一部分. 財務資料
項目 1。 | 基本報表 |
誠合併公司I股份
縮表
九月三十日， | 十二月三十一日， | |||||
| 2024 |
| 2023 | |||
(未經審計) | ||||||
資產 |
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流動資產 |
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現金 | $ | — | $ | — | ||
預付費用 |
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所有流動資产總額 |
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$ |
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總資產 | $ | | $ | | ||
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負債、可贖優先股和股東資本赤字 | ||||||
流動負債 |
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應付帳款及應計費用 | $ | | $ | | ||
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應付交易成本 | | — | ||||
全部流动负债 |
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認股權證負債 |
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總負債 |
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承諾與可能負擔（附註6） | ||||||
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可能被贖回的A類普通股， |
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股東赤字 |
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優先股，$ |
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A類普通股，每股 $ |
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B類普通股，$ |
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資本公積額額外增資 |
| — |
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累積虧損 |
| ( |
| ( | ||
股東權益總缺口 | ( | ( | ||||
負債總額、可贖回普通股和股東資本赤字 | $ | | $ | | ||
附註是這份未經審計的簡明財務報表的一部分。
1
誠合併公司I股份
未審計的簡明損益表
截至9月30日止三個月 | 截至9月30日止九個月的情況為 | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
在信託賬戶中持有的投資所獲得的投資收入 | $ | | $ | | $ | | $ | | ||||
營運虧損 |
| ( |
| ( | ( |
| ( | |||||
其他收入： |
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| |||||||
其他收入歸因於將分配給發行成本的遞延承銷費用減少 | — | | — | | ||||||||
認股權的公允價值變動溢利（損失） |
| |
| | ( |
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信托利息收入 |
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其他收入合計，淨額 |
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凈利潤（損失） | $ | | $ | | $ | ( | $ | | ||||
普通A類股份的基本和稀釋加權平均未來支付部分可能贖回 |
| |
| | |
| | |||||
普通股每股基本及稀釋凈利潤（損失），A類普通股可能面臨贖回 | $ | | $ | | $ | ( | $ | | ||||
非可贖回A類和B類普通股的稀釋和基本加權平均股份 |
| |
| | |
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每股基本與稀釋凈利潤（虧損），不可贖回的A類和B類普通股 | $ | | $ | | $ | ( | $ | | ||||
附註是這份未經審計的簡明財務報表的一部分。
2
誠合併公司I股份
未經審核的股東權益赤字變動簡明報表
截至2024年9月30日和2023年9月30日的三個和九個月。
總計 | |||||||||||||||||||
A類普通股 | b類普通股 | 追加 | 累積的 | 股東的 | |||||||||||||||
| 股份 |
| 金額 |
| 股份 |
| 金額 |
| 實收資本 |
| 赤字 |
| 赤字 | ||||||
2023年12月31日結餘 |
| | $ | | | $ | | $ | | $ | ( | $ | ( | ||||||
對A類普通股重新計量至贖回金額 |
| — |
| — | — | — |
| ( |
| — |
| ( | |||||||
淨虧損 |
| — |
| — | — | — |
| — |
| ( |
| ( | |||||||
2024年3月31日餘額（未經審計） | | $ | | | $ | | $ | | $ | ( | $ | ( | |||||||
對A類普通股重新計量至贖回金額 | — | — | — | — | ( | — | ( | ||||||||||||
凈利潤 |
| — |
| — | — | — |
| — |
| |
| | |||||||
截至2024年6月30日的資產負債表（未經審核） |
| | $ | | | $ | | $ | | $ | ( | $ | ( | ||||||
對A類普通股重新計量至贖回金額 | — | — | — | — | ( | ( | ( | ||||||||||||
凈利潤 | — | — | — | — | — | | | ||||||||||||
2024年9月30日結餘（未經審核） | | $ | | | $ | | $ | — | $ | ( | $ | ( | |||||||
截至2023年9月30日的三個月和九個月
總計 | ||||||||||||||
B類 | 追加 | 累積的 | Shareholders’ | |||||||||||
| 股份 |
| 金額 |
| 已繳資本 |
| 赤字 |
| 赤字 | |||||
截至2022年12月31日的资产负债表 | | $ | | $ | — | $ | ( | $ | ( | |||||
對A類普通股重新計量至贖回金額 |
| — |
| — |
| — |
| ( |
| ( | ||||
凈利潤 |
| — |
| — |
| — |
| |
| | ||||
2023年3月31日餘額（未經審核） | | | — | ( | ( | |||||||||
對A類普通股重新計量至贖回金額 | — | — | — | ( | ( | |||||||||
凈利潤 | — | — | — | | | |||||||||
2023年6月30日資產負債表（未經審核） | | | — | ( | ( | |||||||||
對A類普通股重新計量至贖回金額 |
| — | — | — | ( | ( | ||||||||
減少遞延承銷費用 | — | — | — | | | |||||||||
凈利潤 | — | — | — | | | |||||||||
至2023年9月30日止餘額（未經審核） | | $ | | $ | — | $ | ( | $ | ( | |||||
附註是這份未經審計的簡明財務報表的一部分。
3
誠合併公司I股份
未經核數的現金流量表
截至9月30日止九個月的情況為 | ||||||
| 2024 |
| 2023 | |||
經營活動現金流量： | ||||||
淨（損失）收入 | $ | ( | $ | | ||
調整以調和淨（虧損）收益為經營活動所用現金： |
|
|
|
| ||
其他收入歸因於將分配給發行成本的遞延承銷費用減少 | — | ( | ||||
信託賬戶中持有的可轉讓證券所賺取的利息 | ( | ( | ||||
認股權變動公平值未實現盈利（虧損） |
| |
| ( | ||
營運資產和負債的變化： |
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預付費用 |
| ( |
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應付帳款及應計費用 |
| |
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應付給關聯方 | — | ( | ||||
經營活動所用的淨現金 |
| ( |
| ( | ||
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投資活動現金流量： |
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融資活動中使用的淨現金 | — | | ||||
主要存入trust賬戶 | ( | ( | ||||
投資活動提供的淨現金流量（使用） |
| ( |
| | ||
融資活動現金流量： | ||||||
贖回普通股 | — | ( | ||||
發行人保證票款的收益 |
| |
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由目標支付的展延存款 |
| |
| — | ||
融資活動提供的（使用的）淨現金 | | ( | ||||
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現金的淨變化 |
| — |
| ( | ||
期初現金 | — | | ||||
期末現金 | $ | — | $ | | ||
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現金流量資訊的補充披露： | ||||||
對A類普通股重新計量至贖回金額 | $ | | $ | | ||
免除推廣中的承銷佣金應付款項計入累積虧損 | $ | — | $ | ( | ||
附註是這份未經審計的簡明財務報表的一部分。
4
成合收購I公司。
基本報表附註
備註1—組織和業務業務控件
成和收購I公司（前稱LatAmGrowth SPAC）（以下簡稱「公司」）於2021年5月20日註冊成爲開曼群島豁免公司。2023年10月25日，該公司股東批准將公司名稱從LatAmGrowth SPAC更改爲成和收購I公司，這是由於贊助銷售（請參閱下文中有關該贊助銷售的詳細信息）。公司的成立目的是實現與一個或多個企業或實體進行合併、股份交換、資產收購、股份購買、重組或類似業務組合（「業務組合」）。
首次公開募股
截至2024年9月30日，該公司尚未開始任何業務。從2021年5月20日（成立）至2024年9月30日的所有活動均涉及公司的成立、首次公開發行（「IPO」）、尋找業務組合目標和談判業務組合。在初步業務組合完成之前，該公司將不會產生任何營業收入。該公司將以來自IPO收益的現金及現金等價物利息收入形式生成非營業收入。該公司已將12月31日確定爲其財政年度結束日期。
公司IPO的註冊聲明於2022年1月24日生效。於2022年1月27日，公司完成了IPO
與IPO結束同時，公司完成了對
交易成本爲
公司必須完成一個或多個業務組合，其總公允市值至少爲信託帳戶中資產價值的
2022年1月27日發行IPO後，從公開發行單位和定向增發warrants的淨收益中，每單位共籌集了$
5
根據修訂和重新制定的公司備忘錄和章程（隨時修訂，稱爲「MAA」）中規定，或在公司爲了完成業務組合而必須延長時間期間內，由股東投票修訂其MAA導致的任何延長時間（iii）適當提交的公衆股份的贖回與股東投票修訂該公司MAA有關的情況下（A）修改公司允許在初始業務組合中贖回的義務的實質或時間安排或贖回
公司將向其公衆股東提供在完成初始業務組合後贖回其全部或部分公衆股份的機會，方式包括（i）在召開以批准初始業務組合爲目的的股東大會時，或（ii）通過要約收購無需股東投票。關於公司是否將尋求股東批准擬議的初始業務組合或進行要約收購的決定將由公司獨自酌情作出，並將基於多種因素，例如交易的時間安排以及交易條款是否需要公司根據適用法律或股票交易所上市要求尋求股東批准。
股東有權以每股價格以現金支付等於在初始業務組合完成之前兩個工作日按委託帳戶中當時存入的總金額計算，包括委託帳戶中持有的未曾用於支付公司稅款的資金所產生的利息，除以當時未發行的公衆股份數量，取決於公司IPO招股說明書中描述的限制和條件。委託帳戶中的金額爲$
待贖回的普通股按贖回價值計入，並在IPO完成後按照《財務會計準則委員會（FASB）》《會計準則規範（ASC）》第480號主題「區分負債和權益」（「ASC 480」）分類爲臨時權益。
2023年6月15日，公司收到了納斯達克證券交易所（「NASDAQ」）上市資格部（「Staff」）發來的書面通知，指出自公司尚未行使的認股證的總市值低於1,000,000美元，公司不再符合納斯達克全球市場繼續上市標準中規定的納斯達克上市規則5452(b)(C)（「規則」）要求公司至少維持未行使的認股證總市值1,000,000美元以上的資格（「通知」）。公司獲得從通知發出之日起45個日曆日的期限提交恢復遵守規則的計劃。公司未提出此類計劃。2023年8月16日，Staff通知公司，納斯達克決定啓動對公司公共認股證的除牌程序，每個整認股證可行使購買。
如果公司在交易組合期內未完成業務組合，則公司將：(i) 停止所有業務，僅用於清算目的，(ii) 儘快但不超過 業務日後，按照每股價格贖回公共股份，以現金支付，等於信託帳戶中當時存款總額，包括信託帳戶中的利息所得（扣除應繳稅款和最高$
贊助方和管理團隊的每位成員同意放棄他們在完成首次業務組合時針對其創始股和公共股份的贖回權；(ii) 放棄其權利與股東表決批准修改公司MAA的修正案有關時的初始期業務組合時允許贖回或贖回
6
合併期或（B）與股東權利或初始業務合併前活動有關的任何其他重要條款；（iii）如果公司未能在合併期內完成初始業務合併，則放棄從信託帳戶中清算其創始股票分配的權利，但如果公司未能在合併期內完成初始業務合併，他們將有權清算信託帳戶中其持有的任何公開股票的分配規定的時限；以及（iv）投票支持初始業務合併，以及在首次公開募股（包括公開市場和私下談判的交易）期間或之後購買的任何公開股票。
贊助商已同意，如果第三方就向公司提供的服務或出售的產品提出的索賠，或公司已與之簽訂書面意向書、保密或其他類似協議或業務合併協議的潛在目標企業提出的任何索賠，將信託帳戶中的資金金額減少到 (i) 美元以下，則贊助商將對公司承擔責任
贊助商銷售
該公司目前的保薦人是Chenghe Investment I Limited，這是一家根據開曼群島法律註冊成立的豁免公司（「新贊助商」 和 「贊助商」 是指每位老贊助商和新保薦人，除非文中另有說明）。2023年9月29日，公司、舊保薦人和新保薦人簽訂了證券購買協議（「SPA」），2023年10月6日，舊保薦人和新保薦人完成了SPA考慮的交易（「贊助商出售」），根據該協議，新保薦人共收購了 (i)
公司分析了2023年9月在SaB主題5 「雜項會計」 第t節 「主要股東支付的費用或負債會計」 下籤訂的SPA，得出的結論是，SPA以有權從新保薦人那裏獲得額外延期繳款的形式向公司提供福利。獲得額外補助的權利
7
延伸貢獻要求新的贊助商，即主要股東，提供或促使提供以公司B類普通股的轉讓形式的對價。2023年10月6日贊助商銷售關閉時的收益條款估計公允價值爲名義零。因此，公司決定對轉讓的B類普通股的公允價值全額記錄一項費用。在2023年10月，公司根據SAB主題5萬億記錄了一項費用$
與贊助商銷售有關的公司前管理層，前首席執行官、財務長和董事Gerard Cremoux以及前首席投資官Gerardo Mendoza和公司前董事Michael McGuiness、Eduardo 高登、Carole Philippe、Miguel Olea、Zain Manekia和Hector Martinez在贊助商銷售關閉時辭去了各自的董事（和/或官員，視情況而定）職務。2023年10月6日，Shibin Wang、Ning Ma、Kwan Sun和James Zhang被任命爲公司的董事，Zhiyang Zhou被任命爲公司的首席執行官和財務長。
在2023年10月2日，舊贊助商簽署了EBC信函協議，根據該協議，舊贊助商同意（i）以
本
2023年10月2日，爲了與贊助商銷售相關，EBC向公司發出了EBC豁免信，依據該信函，EBC BCMA被終止。在EBC豁免信下，公司同意根據EBC信函協議由舊贊助商轉讓給EBC的B類普通股將與舊贊助商持有的其他B類普通股享有相同的註冊權利。
特別股東大會、延期與贖回
2023年4月13日，公司召開了一次特別股東大會（「第一次特別股東大會」），以虛擬形式進行。在第一次特別股東大會上，股東批准了(1) 對公司章程的修訂提案，以延長公司必須(i) 完成其業務合併的日期（「終止日期」），(ii) 在未完成業務合併的情況下停止運營，僅用於清算，及(iii) 從2023年4月27日至2023年11月27日贖回公司所有公開股票（「第一次延期修正案」及該提案，「第一次延期修正案提案」）；(2) 對於投資管理信託協議的修訂提案，該協議於2022年1月24日（「信託協議」）由公司與大陸股票轉移和信託公司（Continental Stock Transfer & Trust Company）簽訂，以允許公司在每月基礎上延長期限，在公司未完成其首次業務合併的情況下，受託人必須清算公司在首次公開募股（IPO）中設立的信託賬戶的日期，從2023年4月27日延長至2023年11月27日，通過向信託賬戶存入的金額爲未贖回的每個公開股票的較小值 $
此外，在第一次特別股東大會上，公共股票的持有者有機會要求公司通過他們相應的Trust賬戶份額來贖回他們的公共股票。
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約爲$的贖回價格
2023年4月13日，公司向老贊助商發行了一份無息、不可轉換的無擔保承諾票據，金額最高爲$
2023年10月25日，公司召開了特別股東大會（「第二次特別股東大會」），股東們批准了（1）修訂MAA的提案，以延長（「第二次延長」）終止日期，從2023年10月27日延長至2024年1月27日，以存入金額不低於（a） $
關於批准第二次延期修正案提案的投票，
在2023年10月25日，公司向新贊助商發行了一張無息的不可轉換的無擔保票據（「2023年10月票據」），本金金額最高爲$
在2024年7月11日，公司向新贊助商發行了一張無息的不可轉換的無擔保票據（「2024年7月票據」），本金金額最高爲$
On each of October 30, 2023 and November 29, 2023, the Company deposited $
From February 2024 to September 2024,
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公司未能履行商業合併協議中所述義務的重大違約，公司的義務是支付並償還FST在信託賬戶中存入的擴展貢獻，FST所存資金是在信託賬戶之外的資金。
2024年10月25日，公司召開了臨時股東大會（「第三次臨時股東大會」），股東們批准了（1）提案，修改MAA以延長（「第三次延長」）終止日期，從2024年10月27日延長至2024年11月27日，存入資金爲$
與批准第三次延長修訂提案的投票有關，
與擴展修正提案的批准相關，除了擴展資金外，公司承諾爲第三次擴展存入額外的激勵資金到Trust賬戶。因此，公司總共承諾支付(a) $
在2024年11月4日，FST根據業務合併協議向Trust金額存入了 $
業務合併協議及相關協議
業務合併協議
在2023年12月22日，公司簽署了一項業務合併協議（“業務合併協議”）與FST CORP，一家開曼群島的豁免公司，股份有限公司（“CayCo），FST合併有限公司，這是一家位於開曼群島的股份有限公司，並且是CayCo的全資子公司（合併子公司）和Femco鋼鐵科技有限公司，這是一家根據臺灣法律註冊成立並存在的股份有限公司，統一商業編號爲04465819（FST）以及與CayCo和Merger Sub共同組成的“FST各方），根據其中規定的條款和條件，Merger Sub將與公司合併，公司將作爲存續公司併成爲CayCo的直接全資子公司（合併），公司將更名爲「FST有限公司」（“FST 業務合併）。根據業務合併協議，FST同意承擔與公司終止日期延長相關的所有費用和成本，不超過$
2024年9月10日，公司與FST各方簽訂了業務合併協議的第一次修正案（「第一次BCA修正案」），根據該協議，如果業務合併未發生的截止日期，將從2024年10月26日下午5:00（香港時間）延長至2025年1月26日下午5:00（香港時間）（或公司與程禾共同商定的更晚時間）（「協議結束日期」）。業務合併協議的所有其他條款均保持不變，該協議先前由程禾作爲附件2.1於2023年12月22日提交給程禾的8-K當前報告。
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根據業務合併協議，在合併生效時，(i) 公司每個未償品牌將被自動分離（“單位分離）持有者將被視爲持有
根據合併協議，各方（或在某些情況下，部分方）完成FST業務合併的義務須滿足或放棄特定的常規交割條件，包括但不限於，（i）向各個標準的陳述和保證的準確性，從沒有重大限定到重大不利影響的限定，（ii）在交割前的合同方面的重大遵守，（iii）未發生FST的重大不利影響，（iv）FST的公司收購比例（在合併協議中定義）至少達到
業務合併協議考慮在FST業務合併的關閉之前或在關閉時執行各種額外協議和文書，包括但不限於以下內容：
發起人支持協議
同時，在業務合併協議延期的同時，公司、新贊助商、舊贊助商和FST簽署了一項贊助商支持協議（「贊助商支持協議」），根據該協議，每個贊助商同意在FST收到臺灣DIR批准（如其中定義）之日起至FST業務合併的關閉或者如果更早則至業務合併協議終止期間，投票支持業務合併協議所涉及的交易。
公司股東支持協議
同時在業務合併協議簽署時，公司、FST、CayCo、某些列出在其中的FST股東和某些列出在其中的CayCo股東簽署了一份公司股東支持協議（「公司支持協議」），根據該協議，每位簽署的FST和CayCo股東同意就業務合併協議所涉及的交易投票，並且在公司支持協議終止之前不轉讓任何相關股份（如其中定義）。
Lock-up Agreement
在FST業務合併關閉時，CayCo、新贊助商、某些列出在其中的FST股東（「公司持有者」）和某些列出在其中的人員（「贊助商關鍵持有者」，與公司持有者統稱爲「持有者」）將簽署一份鎖定協議（「鎖定協議」），根據該協議，每位持有者同意在FST業務合併關閉日期後的六（6）個月內不轉讓任何鎖定股份（如其中定義），但有某些例外和豁免。
投資者權利協議
在FST業務合併結束時，CayCo、公司、FST及其他列出的各方將簽署一份投資者權益協議（「投資者權益協議」）。根據投資者權益協議，(i) CayCo同意根據證券法承擔某些再售架構註冊義務，且某些持有人獲得了常規要求和跟隨註冊權利，以及(ii) 投資者權益協議的各方同意使(x) CayCo的董事會由五（5）名董事組成（董事會可根據一致決議不時增加），(y) 其中一（1）名董事應由新贊助方提名，並且(z) 只要贊助方（定義如上文）持有任何權利
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CayCo的普通股，CayCo應採取一切必要措施使新贊助人提名的個人當選爲董事。
其他發展
2023年11月6日，根據信託協議，公司指示大陸股票轉倉與信託公司將信託賬戶中的所有資金存入不投資的利息-bearing 銀行存款賬戶。
2023年11月8日，新贊助人通知公司，它決定將
2023年11月8日，公司與大陸股票轉倉與信託公司簽署了投資管理信託協議的第3號修正案，根據該協議，信託協議中所有對「LatAmGrowth SPAC」的引用，包括其附錄，均修訂爲「承合收購I公司」。
2024年1月31日，公司與Revere Securities, LLC簽署了一封聘用信，根據該信，公司已聘請Revere Securities, LLC作爲其財務顧問（a）與FST業務合併相關，以及（b）就與FST業務合併相關的所有私募投資，包括股權、債務和/或與股權相關的證券。
2024年6月21日，公司收到了Zhiyang Zhou的通知，她決定因個人原因辭去公司首席執行官和財務長的職務，立即生效。2024年6月27日，公司董事會任命Yixuan Yuan爲公司首席執行官，Zhaohai Wang爲公司財務長，Zhiyang Zhou爲公司總裁。
流動性、資本資源和持續經營
截至2024年9月30日，公司持有的
在首次公開募股之前，公司的流動性需求通過舊贊助商支付的$得以滿足
公司在截至2024年9月30日的九個月內未根據股票回購計劃購買任何普通股。
公司可以通過工作資金貸款（如下面定義）從贊助商、贊助商的關聯公司、公司的某些高級官員和董事，或通過第三方貸款來籌集額外資本。如果公司無法籌集額外資本，可能需要採取額外措施以保持流動性，這可能包括但不限於縮減運營、暫停追求其商業計劃，以及減少間接費用。公司無法保證新融資在商業上可接受的條款下可獲得，甚至可能根本無法獲得。
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在2023年4月13日，公司如上所述發行了2023年4月票據。2023年4月票據於2023年10月4日終止，撤回的$
在2023年10月25日，公司發行了2023年10月票據。截至2024年9月30日，2023年10月票據的未償還總額爲$
在2024年7月11日，公司向新贊助商發行了2024年7月的票據，最高本金金額爲$
如果在要求的日期前未能完成業務合併，公司無法獲得進一步延長終止日期的資金，則將進行強制清算和隨後的解散。
根據財務會計標準委員會的會計標準更新（「ASU」）2014-15，「關於實體繼續作爲持續經營能力的披露」，公司在評估持續經營的相關考慮時，截止到2024年11月27日（或在第三次特別股東大會批准的額外延長按金情況下爲2025年4月27日）必須完成首次業務合併。公司計劃在強制清算日期之前完成首次業務合併。然而，沒有任何保證公司能夠在2024年11月27日（或在第三次特別股東大會批准的額外延長按金情況下爲2025年4月27日）之前完成任何業務合併。管理層已確定，如果未發生業務合併，強制清算及潛在的後續解散將對公司的持續經營能力產生重大懷疑。基本報表未包含可能因這種不確定性而導致的任何調整。隨附的基本報表已按照GAAP編制，考慮到公司的持續經營。
風險與不確定性
公司目前正在評估COVID-19大流行的影響，並已得出結論，雖然該病毒可能對公司的財務狀況、經營結果和/或完成業務合併產生負面影響是合理可能的，但截至這些基本報表的日期，具體影響尚無法確定。
管理層目前正在評估以色列-哈馬斯衝突和俄烏戰爭的影響，並得出結論，雖然戰爭可能對公司的財務狀況、經營成果和/或尋找目標公司的過程產生負面影響，但截至這些未經審計的簡化基本報表日期，具體影響尚不明確。未經審計的簡化基本報表未包括任何可能因不確定性結果而導致的調整。
註釋 2——重要會計政策及呈現基礎
財務報表的基礎
附帶的未經審計的簡化基本報表依據美國公認會計原則（"GAAP"）爲中期財務信息的編制，並遵循Form 10-Q的指引及證券交易委員會（SEC）第8條的規定。某些通常在依據GAAP編制的未經審計的簡化基本報表中包含的信息或腳註披露已被簡化或省略，依據SEC對於中期財務報告的規章。因而，它們未包含完整呈現財務狀況、經營成果或現金流所必需的所有信息和腳註。在管理層看來，附帶的未經審計的簡化基本報表包含所有必要的調整，均爲正常的經常性性質，以確保財務狀況、經營成果和現金流的公正呈現。
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附帶的未審計的簡要基本報表應與公司提交給SEC的2023年12月31日結束年份的10-K年度報告同時閱讀，該報告於2024年4月12日由公司提交。2024年9月30日結束的三個月和九個月的中期結果不一定能夠指示2024年12月31日結束年份或任何未來中期期間將要期待的結果。
新興增長公司狀態
公司被定義爲《證券法》第2(a)節中所稱的「新興成長公司」，並通過2012年《創業公司法案》（「JOBS法案」）進行修改，它可以利用某些豁免，以免遵守適用於不是新興成長公司的其他公開公司的各種報告要求，包括但不限於，不需要遵守《薩班斯-奧克斯利法》第404節的核數師證明要求，減少在定期報告和代理聲明中有關高管薪酬的披露義務，以及免於進行非約束性顧問投票和股東批准任何未獲批准的金色降落傘支付的要求。
此外，《JOBS法案》第102(b)(1)節使新興成長公司免於被要求遵守新的或修訂的財務會計準則，直到私人公司（即那些尚未獲得有效的《證券法》註冊聲明或沒有根據《交易所法》註冊的證券類別的公司）被要求遵守新的或修訂的財務會計準則。《JOBS法案》規定，公司可以選擇不使用延長過渡期，並遵守適用於非新興成長公司的要求，但任何此類選擇退出都是不可撤銷的。公司已選擇不退出此延長過渡期，這意味着當標準發佈或修訂時，如果公私公司適用不同的實施日期，則公司作爲新興成長公司可以在私人公司採用新的或修訂的標準時採用新的或修訂的標準。這可能使得公司財務報表與其他既不是新興成長公司也不是選擇退出使用延長過渡期的新興成長公司的其他公開公司的比較變得困難或不可能，因爲會計準則可能存在潛在差異。
估計的使用
根據GAAP準備的簡要財務報表要求管理層做出估計和假設，這些估計和假設會影響資產和負債的報告金額，以及在簡要財務報表日期披露的或有資產和負債，以及在報告期間報告的費用金額。
進行估計需要管理層運用重要的判斷。管理層認爲這些條件、情況或一系列存在於簡要財務報表日期的環境的估計，至少在合理的可能性範圍內，可能會由於一個或多個未來的確認事件在不久的將來發生變化。在這些簡要財務報表中包含的更重要的會計估計之一是對權證負債公允價值的確定。隨着更當前信息的可用性，這些估計可能會發生變化，因此，實際結果可能與這些估計顯著不同。
信貸風險集中度
可能使公司面臨信用風險集中度的金融工具包括在一家金融機構的現金賬戶，該賬戶的餘額有時可能超過聯邦存款保險覆蓋的250,000美元。公司在此賬戶上沒有經歷過損失。
現金及現金等價物
公司在購買時將所有原始到期日爲三個月或更短的短期投資視爲現金及現金等價物。
持有的信託賬戶現金
截至2024年9月30日和2023年12月31日，公司分別持有$
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信託賬戶中的所有資金未投資於利息-bearing 銀行存款賬戶。截止2024年9月30日和2023年12月31日，信託賬戶中的所有資金都以現金形式持有。
擔保負債
公司根據ASC 480-25，「區分負債與權益」和ASC 815-40「衍生品和對沖——實體自身權益中的合同」對其Warrants進行了評估。公司將公開Warrants和定向增發Warrants（統稱爲「Warrants」）作爲衍生負債進行覈算。Warrant協議中的一項條款與某些公開收購或交換要約相關，禁止將Warrants作爲權益的組成部分進行覈算。由於Warrants符合ASC 815「衍生品和對沖」中所考慮的衍生品的定義，公司將未以其自身股票爲標的的普通股Warrants作爲衍生負債在資產負債表上按公允價值入賬，並根據ASC 820在首次確認（IPO日期）和每個報告日按公允價值計量，公允價值的變化在變化發生的期間計入運營報表。
金融工具的公允價值
公司的資產和負債的公允價值符合FASB ASC 820「公允價值計量與披露」的金融工具標準，近似於資產負債表中所列的賬面價值，主要是由於其短期性質。
公允價值被定義爲在計量日，市場參與者之間有序交易中，銷售資產或轉移負債所收取的價格。GAAP建立了一個三層次的公允價值層級體系，優先考慮用於計量公允價值的輸入。該層級將活躍市場中相同資產或負債的未調整報價（第1層次計量）給予最高優先級，而將不可觀察輸入（第3層次計量）給予最低優先級。公司的金融工具被分類爲第1層次、第2層次或第3層次。這些層次包括：
| ● | 第一級，定義爲可觀察的輸入，例如在活躍市場中相同工具的報價（未經調整）; |
| ● | 第二級，定義爲除活躍市場中報價價格以外的輸入，這些輸入是直接或間接可觀察的，例如活躍市場中類似工具的報價價格或在非活躍市場中相同或類似工具的報價價格；以及 |
| ● | 第三級，定義爲幾乎沒有市場數據的不可觀察輸入，因此需要實體自行制定假設，例如源自評估技術的評估，其中一個或多個重要輸入或重要價值驅動因素是不可觀察的。 |
在某些情況下，用於測量公允價值的輸入可能屬於公允價值等級的不同層次。在這種情況下，根據對投資而言重要的最低層次輸入來判斷整個投資被歸類於公允價值等級的哪一層次。評估特定輸入對整體投資估值的重要性要求判斷，並考慮與投資相關的特定因素。投資在等級中的分類基於投資的定價透明度，並不一定與該投資的感知風險相對應。
有關公允價值計量的資產和負債的更多信息，請參見注釋8。
衍生金融工具和Warrants及超額配售負債
本公司不使用衍生工具來對沖現金流、市場或外匯風險。本公司評估其所有金融工具，包括已發行的股票購買Warrants，以判斷這些工具是否爲衍生工具，或是否包含根據ASC 815-15資格的嵌入式衍生特徵。衍生工具的分類，包括這些工具是否應記錄爲負債或股權以及公允價值的計量，在每個報告期結束時進行重新評估。根據ASC 825-10 "金融工具"，與衍生Warrants負債和超額配售選擇權的發行相關的費用已基於其相對公允價值對總收益進行分配，並在損益表中作爲發生時確認。衍生Warrants負債被歸類爲非流動負債，因爲其清算不合理預期需要使用當前資產或創造當前負債。
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The Company accounts for warrants and over-allotment as either equity-classified or liability-classified instruments based on an assessment of the warrant and over-allotment option’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board Accounting Standards Codification 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. The assessment considers whether the warrants and over-allotment option are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants and over-allotment option meet all of the requirements for equity classification under ASC 815, including whether the warrants and over-allotment option are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment is conducted at the time of warrant and over-allotment option issuance and as of each subsequent quarterly period end date while the warrants and over-allotment option are outstanding.
For warrants and over-allotment option that meet all of the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance. For warrants and over-allotment that do not meet all the criteria for equity classification, they are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants and over-allotment option are recognized as a non-cash gain or loss on the statements of operations.
The Company accounted for the Public Warrants (see Note 3), Private Placement Warrants (see Note 4) and over-allotment option (Note 6) in accordance with the guidance contained in ASC 815-40. The Warrants and over-allotment are not considered indexed to the Company’s own ordinary shares, and as such, they do not meet the criteria for equity treatment and are recorded as liabilities.
Income Taxes
The Company accounts for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements.
Net Income (Loss) Per Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of ordinary shares, which are referred to as Class A and Class B. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average number of ordinary shares outstanding for the respective period. The Company did not consider the effect of the warrants issued in connection with the IPO and the private placement in the calculation of diluted income (loss) per ordinary share because their exercise is contingent upon future events. As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share. Remeasurement associated with the redeemable Class A ordinary shares is excluded from income (loss) per ordinary share as the redemption value approximates fair value.
At September 30, 2024 and 2023, we did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in our earnings. As a result, diluted income per share is the same as basic income per share for the period presented.
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The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for each class of ordinary shares:
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||
Non-Redeemable | Non-Redeemable | Non-Redeemable | Non-Redeemable | |||||||||||||||||||||
Redeemable | Class A | Redeemable | Class A | Redeemable | Class A | Redeemable | Class A | |||||||||||||||||
| Class A |
| And Class B |
| Class A |
| And Class B |
| Class A |
| And Class B |
| Class A |
| And Class B | |||||||||
Basic and diluted net income (loss) per share: | ||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Allocation of net income (loss) | $ | | $ | | $ | | $ | | $ | ( | $ | ( | $ | | $ | | ||||||||
Denominator: | ||||||||||||||||||||||||
Weighted average shares outstanding | | | | | | | | | ||||||||||||||||
Basic and diluted net income (loss) per share | $ | | $ | | $ | | $ | |
| $ | ( | $ | ( | $ | | $ | | |||||||
Offering Costs associated with the IPO
The Company complies with the requirements of ASC 340-10-S99-1, SEC Staff Accounting bulletin Topic 5A – “Expenses of Offering”, and SEC Staff Accounting bulletin Topic 5T – “Accounting for Expenses or Liabilities Paid by Principal Stockholder(s)”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Offering costs directly attributable to the issuance of an equity contract to be classified in temporary equity are recorded as a reduction of equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $
Class A Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ deficit. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption is presented as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheets.
At September 30, 2024 and December 31, 2023, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheets. On April 13, 2023, in connection with First Extension Amendment Proposal, holders of
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As of September 30, 2024 and December 31, 2023, the amount of Class A ordinary shares reflected on the balance sheets are reconciled in the following table:
Class A ordinary shares subject to possible redemption as of December 31, 2022 |
| | |
Less: | |||
Partial Redemption |
| ( | |
Plus: |
| ||
Remeasurement of Class A ordinary shares subject to possible redemption |
| | |
Class A ordinary shares subject to possible redemption as of December 31, 2023 | $ | | |
Plus: |
|
| |
Remeasurement of Class A ordinary shares subject to possible redemption |
| | |
Class A ordinary shares subject to possible redemption as of September 30, 2024 | $ | |
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023 - 09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023 - 09 will have a material impact on its condensed financial statements and disclosures.
The Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying unaudited condensed financial statements.
NOTE 3—INITIAL PUBLIC OFFERING
On January 27, 2022, the Company consummated its IPO of
NOTE 4—PRIVATE PLACEMENT
Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of
The Private Placement Warrants are identical to the warrants sold in the IPO except that the Private Placement Warrants, so long as they are held by the Sponsor or its permitted transferees, (i) will not be redeemable by the Company, (ii) may not (including the Class A ordinary shares issuable upon exercise of these Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until
If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in the IPO.
NOTE 5—RELATED PARTY TRANSACTIONS
Founder Shares
On June 2, 2021, the Old Sponsor paid $
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the Sponsor Sale as described above, the New Sponsor acquired
The holders of the Company’s founder shares have agreed not to transfer, assign or sell any of their founder shares and any Class A ordinary shares issuable upon conversion thereof until the earlier to occur of: (i)
The sale or allocation of the founders shares to the Company’s director nominees and affiliates of its Sponsor group, as described above, is within the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the
Promissory Note—Related Party
On April 13, 2023, the Company issued a non-interest bearing non-convertible unsecured promissory note to the Old Sponsor for a principal amount of up to $
On October 25, 2023, the Company issued the October 2023 Note to the New Sponsor for a principal amount of up to $
On July 11, 2024, the Company issued a non-interest bearing non-convertible unsecured promissory note (the “July 2024 Note”) to the New Sponsor, for a principal amount of up to $
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Working Capital Loans
In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes its initial Business Combination, the Company would repay the Working Capital Loans. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $
NOTE 6—COMMITMENTS & CONTINGENCIES
Registration and Shareholder Rights
The holders of the (i) founder shares, (ii) Private Placement Warrants, which were issued in a private placement simultaneously with the closing of the IPO and the Class A ordinary shares underlying such Private Placement Warrants and (iii) warrants that may be issued upon conversion of Working Capital Loans have registration rights to require the Company to use its best efforts to register a sale of any of its securities held by them pursuant to a registration rights agreement dated January 24, 2022. The holders of these securities are entitled to make up to
Legal Fee Arrangement
Pursuant to the SPA, in respect of the legal expenses of Shearman & Sterling LLP (“Shearman”), the Company’s legal counsel prior to the Sponsor Sale, owed by the Company, the Company will pay Shearman in connection with the closing of the initial Business Combination of the Company together with the payment of other transaction expenses and fees pursuant to the funds flow for such Business Combination, an amount equal to $
Underwriting Agreement
The Company granted the underwriters of the IPO a
The underwriters received a cash underwriting discount of two percent (
On September 8, 2023, BofA delivered a letter to the Company to waive its entitlement to the payment of $
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Forward Purchase Agreement
An affiliate of the Old Sponsor (the “Sponsor Affiliate”) entered into a forward purchase agreement with the Company in connection with the IPO that provides for the purchase by the Sponsor Affiliate of an aggregate of up to
The forward purchase shares are identical to the Class A ordinary shares included in the Units sold in the IPO, except that pursuant to the forward purchase agreement, they are not transferable, assignable or salable until 30 days after the completion of our initial Business Combination, subject to limited exceptions. The forward purchase warrants have the same terms as the private placement warrants.
Business Combination Marketing Agreement
On February 9, 2023, the Company entered into a business combination marketing agreement (the “EBC BCMA”) with EarlyBirdCapital, Inc. (“EBC”) for EBC’s assistance in connection with a potential Business Combination with a cash fee equal to $
On October 2, 2023, the Old Sponsor entered into a letter agreement with EBC (the “EBC Letter Agreement”), under which, the Old Sponsor agreed to (i) transfer, at no consideration, to EBC
The
On October 2, 2023, in connection with the Sponsor Sale (see Note 1), EBC issued a waiver letter (“EBC Waiver Letter”) to the Company, pursuant to which, the EBC BCMA is terminated. Under the EBC Waiver Letter, the Company agreed that such Class B ordinary shares to be transferred by the Old Sponsor to EBC under the EBC Letter Agreement will have the same registration rights as the other Class B ordinary shares held by the Old Sponsor.
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NOTE 7—SHAREHOLDERS’ DEFICIT
Preference shares—The Company is authorized to issue
Class A ordinary shares—The Company is authorized to issue
Class B ordinary shares—The Company is authorized to issue
Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the shareholders except as required by law or the MAA. Unless specified in the Company’s MAA, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by its shareholders.
The Class B ordinary shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of the initial Business Combination on a
On April 13, 2023, at the First Extraordinary General Meeting, the shareholders approved, among others, the proposal to amend the Company’s MAA to provide for the right of a holder of the Company’s Class B ordinary shares to convert into Class A ordinary shares on a one-for-one basis prior to the closing of a Business Combination at the election of the holder.
On November 8, 2023, the New Sponsor notified the Company that it elected to convert
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NOTE 8—FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s liabilities that are measured at fair value on September 30, 2024 and December 31, 2023 and indicates the Level 3 fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
|
| Quoted |
| Significant |
| Significant | ||||||
Prices in | Other | Other | ||||||||||
Active | Observable | Unobservable | ||||||||||
September 30, | Markets | Inputs | Inputs | |||||||||
2024 | (Level 1) | (Level 2) | (Level 3) | |||||||||
Liabilities: |
|
|
|
|
|
|
|
| ||||
Warrant liabilities – Public Warrants | $ | | $ | | $ | — | $ | — | ||||
Warrant liabilities – Private Placement Warrants |
| |
| — |
| — |
| | ||||
$ | | $ | | $ | — | $ | | |||||
|
| Quoted |
| Significant |
| Significant | ||||||
Prices in | Other | Other | ||||||||||
Active | Observable | Unobservable | ||||||||||
December 31, | Markets | Inputs | Inputs | |||||||||
2023 | (Level 1) | (Level 2) | (Level 3) | |||||||||
Liabilities: |
|
|
|
|
|
|
|
| ||||
Warrant liabilities – Public Warrants | $ | | $ | | $ | — | $ | — | ||||
Warrant liabilities – Private Placement Warrants |
| |
| — |
| — |
| | ||||
$ | | $ | | $ | — | $ | | |||||
The Public Warrants and the Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within liabilities on the balance sheets. The warrant liabilities were measured at fair value at inception and remeasured on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the statements of operations.
The overallotment option was accounted for as a liability in accordance with ASC 815-40 and was presented within liabilities on the balance sheets from January 27, 2022 up to its expiration on March 10, 2022. The overallotment liability was measured at fair value at inception. The expiration of the overallotment resulted in a gain of $
The Company used a Binomial Option Pricing Model to value the Private Placement Warrants and a Black-Scholes model to value the overallotment option at the initial measurement date. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of
At September 30, 2024 and December 31, 2023, the Company used the quoted price on Over-the-Counter Market (the “OTC”) to establish the fair value of the Public Warrants.
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The Private Placement Warrants were transferred to a Level 2 from a Level 3 during the year ended December 31, 2022, due to the use of an observable market quote for a similar asset in an active market. The Private Placement Warrants changed from Level 2 at September 30, 2023 to Level 3 at December 31, 2023 as a result of the lack of an observable market quote of the Public Warrants on that day. At September 30, 2024 and December 31, 2023 a Monte Carlo simulation methodology was used in estimating the fair value of the Private Placement Warrants. The key inputs for Monte Carlo simulation for the Private Placement Warrants as of September 30, 2024 and December 31, 2023 were as follows:
Input |
| September 30, 2024 |
| December 31, 2023 |
| ||
Public Warrant Price | $ | | $ | |
| ||
Risk-free interest rate |
| | % | | % | ||
Expected term (years) |
| |
| | |||
Expected volatility |
| de minimis |
| de minimis | |||
Stock price | $ | | $ | | |||
Exercise price | $ | | $ | | |||
NOTE 9—SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date up to the date that the unaudited condensed financial statements were issued. Based on this review, other than described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
Subsequent to the September 30, 2024, the Company withdrew $
On October 25, 2024, the Company held the Third Extraordinary General Meeting as disclosed in Note 1. In connection with the vote to approve the Third Extension Amendment Proposal, the holders of
On November 4, 2024, $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References in this quarterly report to “we,” “us,” “Company” or “our company” are to Chenghe Acquisition I Co. (formerly LatAmGrowth SPAC), a Cayman Islands exempted company. References to “management” or our “management team” are to our officers and directors. Capitalized but not otherwise defined terms have the meaning as ascribed to such terms in the notes to the accompanying financial statements.
Cautionary Note Regarding Forward-Looking Statements
This quarterly report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of 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 under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this quarterly report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “seek” and similar expressions, are intended to, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward- looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
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.
Overview
We, Chenghe Acquisition I Co. (f/k/a LatAmGrowth SPAC) are a blank check company incorporated on May 20, 2021 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. On October 25, 2023, our shareholders approved to change our name to Chenghe Acquisition I Co., as a result of the Sponsor Sale. We intend to effectuate our initial business combination using cash from the proceeds of our IPO and the private placement of the private placement warrants and forward purchase units, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
The issuance of additional shares in connection with a business combination to the owners of the target or other investors:
| ● | may significantly dilute the equity interest of investors in our IPO, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares; |
| ● | may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares; |
| ● | could cause a change in control if a substantial number of our Class A ordinary shares are issued, which could result in the resignation or removal of our present officers and directors; |
| ● | may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and |
| ● | may adversely affect prevailing market prices for our Class A ordinary shares. |
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Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:
| ● | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
| ● | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
| ● | our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
| ● | our inability to pay dividends on our Class A ordinary shares; |
| ● | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares, expenses, capital expenditures, acquisitions and other general corporate purposes; |
| ● | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
| ● | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
| ● | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
As indicated in the accompanying unaudited condensed financial statements, at September 30, 2024, we had no cash and had working capital deficit of $4,471,356. Transaction costs related to our IPO amounted to $7,647,620 consisting of $2,600,000 of underwriting discount, $4,550,000 of deferred underwriting discount, and $497,620 of other offering costs. In addition, $2,494,203 of cash was held outside of the trust account and was available for working capital purposes at the consummation of the IPO. Further, we expect to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Proposed Business Combination with Femco Steel Technology Co., Ltd.
As discussed in more details in “Note 1 – Organization and Business Operation” to the unaudited condensed financial statements contained elsewhere in this report, on December 22, 2023, the Company entered into the Business Combination Agreement with the FST Parties, pursuant to which, among other transactions, on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company with the Company being the surviving company and as a direct, wholly owned subsidiary of CayCo, and the Company will change its name to “FST Ltd.”. Under the Business Combination Agreement, FST agreed to bear all of the fees and costs relating to the extension of the Company’s Termination Date not exceeding $80,000 per month. The Extension Contributions loaned to the Company will be forgiven if the Company is unable to consummate a business combination except to the extent of any funds held outside of the trust account. If the Business Combination Agreement is terminated by FST due to the Company’s shareholders’ failure to approve the FST Business Combination or the Company’s material breach of its obligations as described in the Business Combination Agreement, the Company shall pay and reimburse FST the Extension Contribution(s) FST has deposited in the trust account with funds held outside of the trust account.
Under the Business Combination Agreement, the obligations of the parties (or, in some cases, some of the parties) to consummate the FST Business Combination are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, among others, (i) the accuracy of representations and warranties to various standards, from no material qualifier to a material adverse effect qualifier, (ii) material compliance with pre-closing covenants, (iii) no material adverse effect for FST, (iv) FST’s Company
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Acquisition Percentage (as defined in the Business Combination Agreement) reaching at least 90%, (v) the consummation of the FST Restructuring (as defined in the Business Combination Agreement), (vi) the delivery of customary closing certificates, (vii) the receipt of Taiwan DIR Approval and such approval being effective, (viii) the absence of a legal prohibition on consummating the transactions, (ix) approval by the shareholders of the Company and FST, (x) approval of a listing application on the applicable stock exchange for newly issued shares, and (xi) the Company having at least US$5,000,001 of net tangible assets remaining after redemption.
The Business Combination Agreement contemplates the execution of various additional agreements and instruments, on or before the closing of the FST Business Combination, including, among others, Sponsor Support Agreement, Company Shareholder Support Agreement, Lock-up Agreement and Investor Rights Agreement.
On September 10, 2024, the Company and FST Parties entered into the First Amendment to Business Combination Agreement (the “First BCA Amendment”), pursuant to which, the date, by which if the closing of the Business Combination has not occurred the Business Combination Agreement will be terminated, is extended from 5:00 p.m. (Hong Kong time) on October 26, 2024 to 5:00 p.m. (Hong Kong time) on January 26, 2025 (or such later time mutually agreed upon by the Company and Chenghe) (the “Agreement End Date”). All other terms of the Business Combination Agreement, which was previously filed by Chenghe as Exhibit 2.1 to Chenghe’s Current Report on Form 8-K on December 22, 2023, remain unchanged.
Results of Operations
As of September 30, 2024, we have not commenced any operations. All activity for the period from May 20, 2021 (inception) through September 30, 2024, relates to our formation and IPO, and, since the completion of our IPO, the Sponsor Sale, searching for a target to consummate an initial business combination and activities in connection with the proposed FST Business Combination. We will not generate any operating revenues until after the completion of our initial business combination, at the earliest. We generate non-operating income in the form of interest income from the proceeds derived from our IPO and placed in the trust account.
For the three months ended September 30, 2024, we had a net income of $224,112, which consisted of trust interest income of $486,747 and an unrealized gain on change in fair value of warrants of $288,000, offset by formation and operating costs of $550,635.
For the nine months ended September 30, 2024, we had a net loss of $408,688, which consisted of formation and operating costs of $1,565,985 and an unrealized loss on change in fair value of warrants of $288,000, offset by trust interest income of $1,445,297.
For the three months ended September 30, 2023, we had a net income of $1,014,277, which consisted of other income attributable to the reduction of deferred underwriting fee allocated to offering costs of $186,550, unrealized gain on change in fair value of warrants of $416,950 and trust interest income of $778,829, partially offset by formation and operating costs of $368,052.
For the nine months ended September 30, 2023, we had a net income of $3,961,115, which consisted of other income attributable to the reduction of deferred underwriting fee allocated to offering costs of $186,550, unrealized gain on change in fair value of warrants of $1,726,560 and trust interest income of $3,069,235, partially offset by formation and operating costs of $1,021,230.
For the nine months ended September 30, 2024, cash used in operating activities was $1,094,434. Net loss of $408,688 was affected by interest earned on marketable investments held in the Trust Account of $1,445,297 and an unrealized loss on change in fair value of warrants of $288,000. Changes in operating assets and liabilities provided $471,551 of cash for operating activities.
For the nine months ended September 30, 2023, cash used in operating activities was $438,469. Net income of $3,961,115 was affected by unrealized gain on change in fair value of warrant liabilities of $1,726,560, other income attributable to the reduction of deferred underwriting fee allocated to offering costs of $186,550, and interest earned on marketable investments held in the Trust Account of $3,069,235. Changes in operating assets and liabilities provided $582,761 of cash for operating activities.
For the nine months ended September 30, 2024, cash used in investing activities was $788,375 which includes principal deposited into the Trust Account.
For the nine months ended September 30, 2023, cash provided by investing activities was $77,021,024. This included principal deposited into the Trust Account from extension payments totaling $450,000 and cash withdrawn from the Trust Account in connection with a partial redemption of $77,471,024.
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For the nine months ended September 30, 2024, cash provided by financing activities was $1,882,809 which includes proceeds from the issuance of promissory note to related party of $1,094,434 and extension deposits paid by target of $788,375.
For the nine months ended September 30, 2023, cash used in financing activities was $77,171,024. This included proceeds from the Sponsor promissory note of $300,000 and cash withdrawn from the Trust Account for the partial redemption of ordinary shares of $77,471,024.
Liquidity, Capital Resources and Going Concern
As of September 30, 2024, we had no cash on hand and working capital deficit of $4,471,356. On October 6, 2023, we transferred cash balance of $428,000 from our bank account controlled by the Old Sponsor to an account controlled by the New Sponsor, due to our new bank account under the control of the New Sponsor has not been set up yet. We and the New Sponsor agreed to offset the balance of $428,000 due from the New Sponsor with the outstanding promissory note balance due to the New Sponsor of $1,925,479 as of September 30, 2024, as a result of which, the total outstanding balance of the promissory note was $1,497,479 as of September 30, 2024 (see Note 5 to the unaudited condensed financial statements contained elsewhere in this report).
On January 27, 2022, we consummated our IPO of 13,000,000 units, at $10.00 per unit, generating gross proceeds of $130.0 million. Simultaneously with the closing of our IPO, we consummated the sale of 7,900,000 private placement warrants at a price of $1.00 per private placement warrant in a private placement to our sponsor, generating gross proceeds of $7.9 million. Prior to the completion of the IPO, we lacked the liquidity we needed to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. At the IPO date, cash of $2,494,203 in excess of the funds deposited in the trust account and/or used to fund offering expenses was released to us for general working capital purposes.
We did not have any cash on hand as of September 30, 2024. Until consummation of our initial business combination, we will use the funds raised from the New Sponsor, as mentioned below, for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the business combination.
We can raise additional capital through working capital loans from the sponsor, an affiliate of the sponsor, certain of our officers and directors, or through loans from third parties. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and reducing overhead expenses. We cannot provide assurance that new financing will be available to us on commercially acceptable terms, if at all.
On April 13, 2023, at the First Extraordinary General Meeting, in connection with the approval of the First Extension Amendment Proposal, we have agreed to contribute into the trust account the lesser of an aggregate of $150,000 and $0.0375 per share for each public share that was not redeemed at the First Extraordinary General Meeting for each monthly period commencing April 27, 2023, until the earlier of the completion of the initial business combination and November 27, 2023. We issued the April 2023 Note, a non-interest bearing non-convertible unsecured promissory note, to the Old Sponsor for a principal amount of up to $1,050,000 to fund the contributions to the trust account in connection with the First Extension Amendment and First Trust Amendment. The April 2023 Note was terminated on October 4, 2023 and the withdrawal of $300,000 under the April 2023 Note was forgiven without any further liability of us or the Old Sponsor. The amounts forgiven were booked as a capital transaction at October 4, 2023.
On October 25, 2023, at the Second Extraordinary General Meeting, in connection with the approval of the Second Extension Amendment Proposal, we have agreed to contribute into the trust account the lesser of 80,000 and $0.02 for each public share that was not redeemed at the Second Extraordinary General Meeting for each monthly period commencing October 27, 2023 until the earlier of the completion of the initial business combination and October 27, 2024. On October 25, 2023, we issued the October 2023 Note, a non-interest bearing non-convertible unsecured promissory note, to the New Sponsor for a principal amount of up to $1,960,000. As of September 30, 2024, the total outstanding under the October 2023 Note was $1,497,479. Including the $428,000 cash transferred from our bank account controlled by the Old Sponsor to the account controlled by the New Sponsor (as mentioned above), the New Sponsor paid $1,925,479 in total under the October 2023 Note, on behalf of us, for extension and working capital purposes, of which $610,000 was used for extension deposits and $1,315,479 was used for working capital purposes.
On July 11, 2024, the Company issued the July 2024 Note, a non-interest bearing non-convertible unsecured promissory note, to the New Sponsor, for a principal amount of up to $500,000. The Company may apply the amount advanced by the New Sponsor under the
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July 2024 Note to fund the Extension Contribution or, as the Company deems appropriate, towards general corporate purposes. The unpaid principal amount under the July 2024 Note will be repayable by the Company to the New Sponsor on the effective date of an initial merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving the Company and one or more businesses. The maturity date of the July 2024 Note may be accelerated upon the occurrence of an Event of Default (as defined in the July 2024 Note). As of September 30, 2024, the total outstanding under the July 2024 Note was $nil.
On January 3, 2024, $76,512.38 was deposited as Extension Contribution into the trust account by FST pursuant to the Business Combination Agreement, extending the Termination Date to January 27, 2024. From February 2024 to September 2024, nine tranches of $78,837, for an aggregated of $709,537, were deposited as Extension Contribution into the Trust Account by FST pursuant to the Business Combination Agreement, extending the Termination Date to October 27, 2024.
On October 25, 2024, at the Third Extraordinary General Meeting, in connection with the approval of the Third Extension Amendment Proposal, in addition to the Extension Contributions, the Company commits to deposit extra incentive in the Trust Account for the Third Extension. As a result, in the aggregate, the Company commits to pay (a) $0.03 for each of the Company’s Class A ordinary shares not elected to be redeemed immediately after the Third Extraordinary General Meeting for each one-month extension period from October 27, 2024 (exclusive) to January 27, 2025; and (b) $0.05 for each of the Company’s Class A ordinary shares not elected to be redeemed immediately after the Third Extraordinary General Meeting for each one-month extension period from January 25, 2025 to April 27, 2025. On November 4, 2024, $80,000 was deposited as Extension Contribution into the Trust Amount by FST pursuant to the Business Combination Agreement, and on November 5, 2024, $26,032.93 was deposited as Extension Contribution into the Trust Account by the Company, extending the Termination Date to November 27, 2024. If a business combination is not consummated by the required date and we are unable to obtain the funding to further extend the Termination Date, there will be a mandatory liquidation and subsequent dissolution.
In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we have until November 27, 2024 (or April 27, 2025 subject to additional extension deposits as approved in the Third Extraordinary General Meeting) to consummate the initial Business Combination. We intend to complete the initial Business Combination before the mandatory liquidation date. However, there can be no assurance that we will be able to consummate any business combination by November 27, 2024 (or April 27, 2025 subject to additional extension deposits as approved in the Third Extraordinary General Meeting). Management has determined that the mandatory liquidation, should a business combination not occur, and potential subsequent dissolution, raises substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern.
Risks and Uncertainties
Management is currently evaluating the impact of the Israel-Hamas conflict and the Russia-Ukraine war and has concluded that while it is reasonably possible that the war could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2024 and December 31, 2023. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
As of September 30, 2024 and December 31, 2023, we did not have any long-term debt, capital or operating lease obligations.
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Critical Accounting Estimates
The preparation of condensed financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. A critical accounting estimate to our condensed financial statements is the estimated fair value of our warrant liabilities and over-allotment liability, and Class B ordinary shares. Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Warrant Liabilities and Over-allotment Liability
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity and measurement of fair value is re-assessed at the end of each reporting period. In accordance with ASC 825-10 “Financial Instruments”, offering costs attributable to the issuance of the derivative warrant liabilities and overallotment option have been allocated based on their relative fair value of total proceeds and are recognized in the statements of operations as incurred. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or the creation of current liabilities.
We account for warrants and over-allotment as either equity-classified or liability-classified instruments based on an assessment of the warrant and over-allotment option’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants and over-allotment option are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants and over-allotment option meet all of the requirements for equity classification under ASC 815, including whether the warrants and over-allotment option are indexed to our own ordinary shares, among other conditions for equity classification. This assessment is conducted at the time of warrant and over-allotment option issuance and as of each subsequent quarterly period end date while the warrants and over-allotment option are outstanding.
For issued or modified warrants and over-allotment option that meet all of the criteria for equity classification, the warrants and over-allotment option are recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants and over-allotment option that do not meet all the criteria for equity classification, the warrants and over-allotment option are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants and over-allotment option are recognized as a non-cash gain or loss on the statements of operations.
We accounted for the warrants and over-allotment option in accordance with the guidance contained in ASC 815-40. The warrants and over-allotment are not considered indexed to our own ordinary shares, and as such, they do not meet the criteria for equity treatment and are recorded as liabilities.
At September 30, 2024 and December 31, 2023, the Company used the quoted price on Over - the - Counter Market (the “OTC”) to establish the fair value of the Public Warrants.
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The Private Placement Warrants changed from Level 2 at September 30, 2023 to Level 3 at December 31, 2023 as a result of the lack of an observable market quote of the Public Warrants on that day. At September 30, 2024 and December 31, 2023 a Monte Carlo simulation methodology was used in estimating the fair value of the Private Placement Warrants.
Class B Ordinary Shares (or “Founder Shares”)
The Company analyzed the SPA entered into during September 2023 under SAB Topic 5, Miscellaneous Accounting, section T, Accounting for Expenses or Liabilities Paid by Principal Stockholder(s) and concluded that the SPA provides the Company with a benefit in the form of the right to receive additional extension contributions from the New Sponsor. The right to receive the additional extension contributions required the New Sponsor, who is a principal shareholder, to provide or cause to provide consideration in the form of a transfer of Class B ordinary shares of the Company. The estimated fair value of the earnout provision at the closing of the Sponsor Sale on October 6, 2023 is nominal to zero. As a result, the Company determined that an expense in the full amount of the fair value of the Class B ordinary shares transferred should be recorded. During October 2023, the Company recorded an expense under SAB Topic 5T of $2,851,750 with a corresponding increase to additional paid-in capital, based on a Monte Carlo Model simulation valuation of the Class B ordinary shares.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its unaudited condensed financial statements and disclosures.
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the report of the independent registered public accounting firm providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an “emerging growth company,” whichever is earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Following the consummation of our IPO, the net proceeds of our IPO, including amounts in the trust account, have been invested in U.S. government treasury bills, notes or bonds with a maturity of 185 days or less or in certain money market funds that invest solely in US treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our chief executive officer and chief financial officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of September 30, 2024, due to material weaknesses in our internal control over financial reporting, as defined in the SEC guidelines for public companies. The material weaknesses identified relate to ineffective controls over recording of accounting transactions in the proper period, controls over accounting for and disclosure of complex financial instruments in the proper period, including those requiring them to apply complex accounting principles as a means of differentiating between liability, temporary equity and permanent equity classification, controls over fair value estimation of complex financial instruments such as Class B ordinary shares, earnout provision, and forfeiture provision, and controls over timely reconciliation of accrued legal expenses and NASDAQ filing fees.
In light of these material weaknesses, we have enhanced our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements including making greater use of third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. We believe our efforts will enhance our controls relating to accounting for and disclosure of complex financial instruments in the proper period, but we can offer no assurance that our controls will not require additional review and modification in the future as industry accounting practice may evolve over time.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Management’s Report on Internal Control Over Financial Reporting
This quarterly report does not include a management’s assessment regarding internal control over financial reporting or an attestation report of our registered public accounting firm due to a transition period established by rules of the SEC for newly public companies and for an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the JOBS Act.
Changes in Internal Control Over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on April 12, 2024 (the “Annual Report”). Any of these factors could result in a significant or material adverse effect on our business, financial condition and results of operations. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business, financial condition or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the Annual Report. We may disclose future changes to the risk factors or disclose additional factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
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Item 6. Exhibits.
Exhibit |
| Description |
31.1 |
| |
31.2 |
| |
32.1* |
| |
32.2* |
| |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definitions Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Chenghe Acquisition I Co. | |
|
| |
Date: November 12, 2024 | By: | /s/ Yixuan Yuan |
|
| Name: Yixuan Yuan |
|
| Title: Chief Executive Officer (Principal Executive Officer) |
| Chenghe Acquisition I Co. | |
|
| |
Date: November 12, 2024 | By: | /s/ Zhaohai Wang |
|
| Name: Zhaohai Wang |
|
| Title: Chief Financial Officer (Principal Financial and Accounting Officer) |
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