Business context and reporting period
The supplied filing is Cartesian Growth Corporation’s unaudited Form 10-Q for the quarter and six months ended June 30, 2021—not a filing identified as Alti Global, Inc. Cartesian was a newly formed SPAC seeking a business combination; it had not begun operations or generated operating revenue. It completed its IPO on February 26, 2021 and had until February 26, 2023 to complete a business combination.
Financial results and liquidity
- Revenue and operating costs: No operating revenue. Operating costs were $211,271 for the second quarter and $298,491 for the six months; operating losses were the same amounts.
- Net income: $9.25 million for the second quarter and $4.34 million for the six months. Results were driven principally by noncash gains from changes in warrant fair value: $9.44 million and $8.57 million, respectively. Six-month results also included $3.10 million of expense for the excess of private warrant fair value over its purchase price and $0.85 million of offering costs allocated to warrants.
- Cash flow: Six-month operating cash use was $628,552; investing cash use was $345.0 million, primarily the Trust Account deposit; financing cash provided was $346.46 million. Ending cash was $831,388.
- Assets and liquidity: Total assets were $346.19 million, including $345.02 million in the Trust Account and $831,388 of cash outside it. Trust assets were generally unavailable before a business combination, apart from permitted tax withdrawals.
- Liabilities and capital: Total liabilities were $30.53 million, including $18.43 million of warrant liabilities and $12.08 million of deferred underwriting fees payable only if a business combination is completed. The company reported no long-term debt and no working-capital loan borrowings. Class A shares subject to possible redemption were presented separately as $310.66 million of temporary equity.
- Margins: Not meaningful because the company had no operating revenue.
Material changes and unusual items
Compared with December 31, 2020, the company had completed its IPO and private placement, funded the Trust Account, and recorded redeemable Class A shares and warrant liabilities. The filing provides no comparable prior-year operating period for assessing year-over-year performance.
The company restated its February 26, 2021 balance sheet after determining that its public and private warrants should be classified as liabilities and remeasured at fair value, rather than treated as equity. The restatement added $27.00 million of warrant liabilities and reduced temporary equity by the same amount; total shareholders’ equity was unchanged. Warrant remeasurement gains or losses can materially affect reported earnings without corresponding cash flows.
Outlook, risks, and contingencies
- Management expected continued costs to identify and evaluate a target and stated that additional financing might be needed to complete a business combination or meet operating needs if estimates prove insufficient.
- The company had no long-term operating, lease, or purchase obligations disclosed apart from a $10,000 monthly administrative-services fee to its Sponsor, which continues until a business combination or liquidation.
- If no business combination is completed by February 26, 2023, the company must cease operations and redeem public shares, subject to applicable requirements. The Sponsor’s trust-account indemnity may not be sufficient to cover qualifying claims, and the company had not verified the Sponsor’s ability to meet it.
- Management said COVID-19 could adversely affect the company’s financial position, operations, or target search, but the specific impact was not determinable.
- Disclosure controls and procedures were deemed ineffective because of a material weakness in warrant accounting. Management planned to enhance accounting review processes but gave no assurance remediation would be effective. The filing also notes possible litigation or disputes related to the weakness; none were known at filing.
- No legal proceedings or subsequent events requiring adjustment or disclosure were reported.
Important facts for investors to verify
- Confirm the intended issuer: the supplied filing is for Cartesian Growth Corporation, despite the request metadata naming Alti Global, Inc.
- Review the warrant-liability restatement, valuation assumptions, and resulting noncash earnings volatility.
- Assess the material weakness, remediation progress, and whether subsequent filings report effective controls.
- Verify the amount and availability of Trust Account funds, redemption terms, deferred underwriting fee, and business-combination deadline.
- Note that reported net income is not evidence of operating performance: the company had no operating revenue, and results were substantially affected by warrant fair-value changes.