Filing summary
Identity note: The supplied filing is for Cartesian Growth Corporation, not Alti Global, Inc. It is a SPAC 10-K for the fiscal year ended December 31, 2021, signed March 17, 2022.
Business context and reporting period
Cartesian Growth was formed to pursue a business combination and had no operating business or operating revenue in 2021. In September 2021, it agreed to combine with Tiedemann Wealth Management Holdings, TIG entities and Alvarium Investments, with the resulting company to be named Alvarium Tiedemann Holdings. The transaction remained pending at year-end.
Financial results and position
- Revenue and margins: No operating revenue; gross profit and operating margins are not applicable.
- Profit: Net loss was $1.04 million for 2021, versus $7,948 from inception through December 31, 2020. The prior period is a short inception-period comparison, not a full-year comparable.
- Unusual earnings items: 2021 results included a $3.91 million noncash gain from changes in warrant fair value, $3.10 million expense for the initial fair value of private warrants above proceeds received, and $0.87 million of offering costs allocated to warrants.
- Cash flow: Operating cash outflow was $0.91 million. Year-end cash outside the trust was $551,258; cash and securities held in the trust were $345.03 million and generally unavailable before a business combination.
- Debt and liquidity: No long-term debt was reported and no working-capital loans were outstanding. Liabilities included $12.08 million of deferred underwriting fees and approximately $23.09 million of warrant liabilities. The trust balance represented redeemable public-share proceeds, not unrestricted operating liquidity.
- Other: Trust investments earned $31,308 in interest. The company reported no off-balance-sheet arrangements and no material litigation pending.
Material changes and transaction outlook
- The company completed its February 2021 IPO of 34.5 million units at $10 each, placing $345 million in the trust, and sold 8.9 million private warrants for $8.9 million.
- The proposed combination included a $164.999807 million PIPE for 16,836,715 shares at $9.80 per share. Closing was subject to shareholder approval, an effective Form S-4, regulatory approvals and other customary conditions; management expected closing in the second or third quarter of 2022.
- The company had until February 26, 2023 to complete a business combination. If it failed, it would be required to redeem public shares and liquidate; warrants could expire worthless.
- The auditor issued an unqualified opinion on the financial statements but included a going-concern explanatory paragraph, citing insufficient cash and working capital for planned activities over the year following issuance. Management relied on expected completion of the proposed combination to address the concern.
Risks, controls and unusual items
- Management identified a material weakness in internal control over financial reporting involving accounting for complex financial instruments and redeemable Class A shares. Disclosure controls were deemed ineffective at December 31, 2021; remediation was underway, with no assurance it would succeed.
- The weakness had caused misstatements in earlier interim financial statements and the initial audited balance sheet. Management said additional analysis supported the 2021 statements; the auditor did not express an opinion on internal controls.
- Key risks include failure or delay of the proposed combination, redemptions reducing available transaction cash, limited working capital, potential third-party claims against the trust, sponsor and management conflicts, warrant-related dilution and fair-value volatility, and market disruption from COVID-19 and Russia’s invasion of Ukraine.
- No financial guidance for the combined operating business is provided in this filing. The SPAC reported no operating history from which to assess future business performance.
Important facts for investors to verify
- Confirm the issuer and filing: this is Cartesian Growth Corporation’s 10-K, not an Alti Global, Inc. filing.
- Review the latest transaction documents for closing status, shareholder and regulatory approvals, PIPE funding, redemption levels, and final capitalization and dilution.
- Assess the going-concern disclosure against the company’s limited unrestricted cash and the pending transaction timetable.
- Check whether the material weakness has been remediated and whether any further restatements or control deficiencies have been disclosed.
- Review warrant valuation, terms and potential dilution, and distinguish trust assets from cash available for operating expenses.