Alchemy Investments Acquisition Corp 1 10-Q for FY2024 Q3
Alchemy Investments Acquisition Corp 1 (ALCYF)
About this 10-Q
Alchemy Investments Acquisition Corp 1 filed this 10-Q on November 14, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).
Headline figures
Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net income
- $1.46M
- up 6.9% from net income of $1.36M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
Commission File Number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of |
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Telephone: (
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).
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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer ☐ | Accelerated filer ☐ |
Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 13, 2024, there were
Part I – Financial Information
Item 1. Financial Statements
ALCHEMY INVESTMENTS ACQUISITION CORP 1
CONDENSED BALANCE SHEETS
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| September 30, 2024 |
| December 31, 2023 | ||
| | (Unaudited) | | | | |
Assets: |
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Current assets: |
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Cash and cash equivalents | | $ | | | $ | |
Prepaid expenses - current | | | | | | |
Total current assets | |
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Investments held in Trust Account | | | | | | |
Prepaid expenses - non-current | | | — | | | |
Total Assets | | $ | | | $ | |
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Liabilities, Redeemable Class A Ordinary Shares and Shareholders’ Deficit: | |
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Current liabilities: | |
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Accounts payable | | $ | | | $ | |
Accrued expenses | | | — | | | |
Accrued expenses - related party | | | | | | |
Promissory note - related party | |
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| — |
Total current liabilities | | | | | | |
Deferred underwriting fee payable | | | | | | |
Total Liabilities | |
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Commitments and Contingencies (Note 6) | |
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Class A ordinary shares subject to possible redemption, $ | | | | | | |
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Shareholders’ Deficit: | |
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Preference shares, $ | |
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Class A ordinary shares, $ | |
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Class B ordinary shares, $ | |
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Accumulated deficit | |
| ( | |
| ( |
Total Shareholders’ Deficit | |
| ( | |
| ( |
Total Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit | | $ | | | $ | |
| (1) |
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
ALCHEMY INVESTMENTS ACQUISITION CORP 1
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
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| Three Months |
| Three Months | | Nine Months | | Nine Months | ||||
| | Ended September 30, | | Ended September 30, | | Ended September 30, | | Ended September 30, | ||||
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| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||
Operating costs | | $ | | | $ | | | $ | | | $ | |
Loss from operations | |
| ( | | | ( | | | ( | | | ( |
| | | | | | | | | | | | |
Other income: | | | | | | | | | | | | |
Gain on investments held in Trust Account | | | | | | | | | | | | |
Dividend income | | | | | | | | | | | | |
Total other income | | | | | | | | | | | | |
Net income | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Basic and diluted weighted average shares outstanding, Class A ordinary shares-redeemable | | | | | | | | | | | | |
Basic and diluted net income per share, Class A ordinary shares-redeemable | | $ | | | $ | | | $ | | | $ | |
Basic and diluted weighted average shares outstanding, Class A ordinary shares-non-redeemable | | | | | | | | | | | | |
Basic and diluted net income per share, Class A ordinary shares-non-redeemable | | $ | | | $ | | | $ | | | $ | |
Basic and diluted weighted average shares outstanding, Class B ordinary shares-non-redeemable(1) | | | | | | | | | | | | |
Basic and diluted net income per share, Class B ordinary shares-non-redeemable | | $ | | | $ | | | $ | | | $ | |
| (1) | On December 6, 2021, the Company issued |
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
ALCHEMY INVESTMENTS ACQUISITION CORP 1
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(UNAUDITED)
Three and Nine Months Ended September 30, 2024 | |||||||||||||||||||
| | | | | | | | | | | | Additional | | | | | Total | ||
| | Class A Ordinary Shares | | Class B Ordinary Shares | | Paid-in | | Accumulated | | Shareholders’ | |||||||||
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| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||
Balance at January 1, 2024 |
| | | $ | | | | | $ | | | $ | — | | $ | ( | | $ | ( |
Remeasurement of Class A ordinary shares to redemption amount | | — | | | — | | — | | | — | | | — | | | ( | | | ( |
Net income | | — | | | — | | — | | | — | | | — | | | | | | |
Balance at March 31, 2024 | | | | $ | | | | | $ | | | $ | — | | $ | ( | | $ | ( |
Remeasurement of Class A ordinary shares to redemption amount | | — | | | — | | — | | | — | | | — | | | ( | | | ( |
Net income | | — | | | — | | — | | | — | | | — | | | | | | |
Balance at June 30, 2024 | | | | $ | | | | | $ | | | $ | — | | $ | ( | | $ | ( |
Remeasurement of Class A ordinary shares to redemption amount | | — | | | — | | — | | | — | | | — | | | ( | | | ( |
Net income | | — | | | — | | — | | | — | | | — | | | | | | |
Balance at September 30, 2024 |
| | | $ | | | | | $ | | | $ | — | | $ | ( | | $ | ( |
Three and Nine Months Ended September 30, 2023 | |||||||||||||||||||
| | | | | | | | | | | | Additional | | | | | Total | ||
| | Class A Ordinary Shares | | Class B Ordinary Shares | | Paid-in | | Accumulated | | Shareholder’s | |||||||||
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| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Equity (Deficit) | |||||
Balance at January 1, 2023 |
| — | | $ | — | | | | $ | | | $ | | | $ | ( | | $ | |
Net loss | | — | | | — | | — | | | — | | | — | | | ( | | | ( |
Balance at March 31, 2023 | | — | | $ | — | | | | $ | | | $ | | | $ | ( | | $ | |
Proceeds from Initial Public Offering allocated to Public Warrants, net of offering costs | | — | | | — | | — | | | — | | | | | | — | | | |
Proceeds from Private Placement Shares, net of offering costs | | | | | | | — | | | — | | | | | | — | | | |
Initial remeasurement for Class A ordinary shares to redemption amount | | — | | | — | | — | | | — | | | ( | | | ( | | | ( |
Remeasurement of Class A ordinary shares to redemption amount | | — | | | — | | — | | | — | | | — | | | ( | | | ( |
Net income | | — | | | — | | — | | | — | | | — | | | | | | |
Balance at June 30, 2023 | | | | $ | | | | | $ | | | $ | — | | $ | ( | | $ | ( |
Remeasurement of Class A ordinary shares to redemption amount | | — | | | — | | — | | | — | | | — | | | ( | | | ( |
Net income | | — | | | — | | — | | | — | | | — | | | | | | |
Balance at September 30, 2023 |
| | | $ | | | | | $ | | | $ | — | | $ | ( | | $ | ( |
The accompanying notes are an integral part of these unaudited condensed financial statements.
3
ALCHEMY INVESTMENTS ACQUISITION CORP 1
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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| Nine Months |
| Nine Months | ||
| | Ended September 30, | | Ended September 30, | ||
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| 2024 |
| 2023 | ||
Cash Flows from Operating Activities: |
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Net income | | $ | | | $ | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | |
Gain on investments held in trust account | | | ( | | | ( |
Changes in operating assets and liabilities: | |
| | |
| |
Prepaid expenses | | | | | | ( |
Prepaid expenses - non-current | | | | | | ( |
Accounts payable | | | ( | | | ( |
Accrued expenses | | | ( | | | |
Accrued expenses - related party | | | | | | |
Net cash used in operating activities | |
| ( | | | ( |
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Cash Flows from Investing Activities: | | | | | | |
Investment of cash in Trust Account | | | — | | | ( |
Net cash used in investing activities | | | — | | | ( |
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Cash Flows from Financing Activities: | | | | | | |
Proceeds from sale of Private Placement Shares | | | — | | | |
Proceeds from sale of Placement Units, net of underwriting discount paid | | | — | | | |
Proceeds from promissory note, related party | | | | | | |
Repayment of promissory note, related party | | | — | | | ( |
Payment of offering costs | | | — | | | ( |
Net cash provided by financing activities | | | | | | |
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Net Change in Cash and Cash Equivalents | |
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Cash and cash equivalents - Beginning of period | |
| | | | — |
Cash and Cash Equivalents - End of period | | $ | | | $ | |
| | | | | | |
Supplemental disclosure of noncash financing activities: | |
| | | | |
Deferred underwriting fee payable | | $ | | | $ | |
Initial remeasurement of Class A ordinary shares subject to redemption to redemption amount | | $ | — | | $ | |
Subsequent remeasurement of Class A common stock subject to redemption to redemption amount | | $ | | | $ | |
Deferred offering costs included in accounts payable | | $ | — | | $ | |
Deferred offering costs paid through notes payable to related party | | $ | — | | $ | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN
Alchemy Investments Acquisition Corp 1 (the “Company”) is a blank check company incorporated in Cayman Islands on October 27, 2021. The Company was formed for the purpose of entering into a merger, capital share exchange, asset acquisition, share purchase, reorganization or similar business combination with
As of September 30, 2024, the Company had not commenced any operations. All activity from October 27, 2021 (inception) through September 30, 2024 relates to the Company’s formation and initial public offering (“Initial Public Offering”), and subsequent pursuit of a target company to affect a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of investment income on cash and cash equivalents from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s Initial Public Offering was declared effective on May 4, 2023. On May 9, 2023, the Company consummated the Initial Public Offering of
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of and issued
The Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to any Private Placement Shares held by them in connection with the completion of our initial Business Combination, (ii) waive their redemption rights with respect to any Private Placement Shares held by them in connection with a shareholder vote to approve an amendment to our Second Amended and Restated Memorandum and Articles of Association (the “Amended and Restated Memorandum and Articles of Association”) (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or certain amendments to our Amended and Restated Memorandum and Articles of Association prior thereto or to redeem 100% of our Public Shares if we do not complete our initial Business Combination within
Following the closing of the Initial Public Offering on May 9, 2023, an amount of $
Transaction costs related to the issuances described above amounted to $
5
ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Shares, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least
The Company provides the holders (the “Public Shareholders”) of the Company’s Public Shares with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholders meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders are entitled to redeem their Public Shares for a pro rata portion of the amount held in the Trust Account, plus any investment income earned thereon (less taxes payable). The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the Underwriter (as discussed in Note 6). These Public Shares are recorded at a redemption value and classified as temporary equity in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity. If the Company seeks shareholder approval, the Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem the Public Shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or whether they were a public shareholder on the record date for the general meeting held to approve the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined below in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Sponsor has agreed to waive its redemption rights with respect to its Founder Shares and Public Shares in connection with the completion of a Business Combination.
On May 4, 2023, and in connection with the IPO, the Company adopted an Amended and Restated Memorandum and Articles of Association. The Amended and Restated Memorandum and Articles of Association provides that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), is restricted from redeeming its shares with respect to more than an aggregate of
6
ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
if the Company does not complete a Business Combination within the Combination Period or during any Extension Period (as defined below) or (B) with respect to any other material provision relating to shareholders’ rights or pre-initial Business Combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
If the Company is unable to complete a Business Combination within 18 months from the closing of the Initial Public Offering (the “Combination Period”) and the Company’s shareholders have not further amended the Amended and Restated Memorandum and Articles of Association to extend such Combination Period (the “Extension Period”), the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but no more than business days thereafter subject to lawfully available funds therefor, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including investment income earned on the funds held in the Trust Account (less taxes payable and up to $
The Sponsor, officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares and Private Placement Shares if the Company fails to complete an initial Business Combination within the Combination Period or during any Extension Period. However, the Sponsor is entitled to liquidating distributions from the Trust Account with respect to its Public Shares if the Company fails to complete a Business Combination within the Combination Period or during any Extension Period. The Underwriter has agreed to waive their rights to the deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period or during any Extension Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than $
Going Concern and Liquidity
As of September 30, 2024, the Company had $
7
ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
The Company has incurred and expects to continue to incur significant costs in pursuit of the Company’s financing and acquisition plans. The Company anticipates that the cash held outside of the Trust Account as of September 30, 2024 will not be sufficient to allow the Company to operate for at least one year from the date these unaudited condensed financial statements are issued, and therefore substantial doubt about the Company’s ability to continue as a going concern exists. Management plans to address this uncertainty with the successful closing of a Business Combination. The Company has until November 9, 2024 to consummate a Business Combination. If a Business Combination is not consummated by November 9, 2024, there will be a mandatory liquidation and subsequent dissolution of the Company. The Company is in the process of identifying a potential company for an initial Business Combination but requires additional time. An Annual Meeting was held on October 31, 2024 and the shareholders of the Company approved amending the Company’s Articles of Association as a special resolution, giving the Company the right to extend from November 9, 2024 (the “Current Termination Date”) for an additional three months until February 9, 2025, and thereafter on a month-to-month basis, as determined by the Directors in their sole discretion, until September 9, 2025 (the “Extended Date”) – the date by which, if the Company has not consummated its initial Business Combination, the Company must liquidate and dissolve. However, there can be no assurance that the Company will be able to consummate any Business Combination by the Extended Date. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Risks and Uncertainties
As a result of the military action by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the armed conflict in Israel and the Gaza Strip, and to some degree, the COVID-19 pandemic, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected. Further, the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations and/or ability to consummate a Business Combination are not yet determinable. These unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The interim results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future periods.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the
8
ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses and disclosure of contingent assets and liabilities during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of September 30, 2024 and December 31, 2023, cash equivalents included $
Investments Held in Trust Account
As of September 30, 2024, the assets held in the Trust Account were held in money market funds, which were invested in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Such trading securities are presented on the unaudited condensed balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in Gain on investments held in Trust Account in the accompanying unaudited condensed statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. The Company had $
Prepaid expenses
Prepaid expenses - current of $
Class A Ordinary Shares Subject to Possible Redemption
The Company’s Class A Ordinary Shares that were sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, or if there is a shareholder vote
9
ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
or tender offer in connection with the Company’s initial Business Combination. In accordance with ASC 480-10-S99, the Company classifies ordinary shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Class A Ordinary Shares sold as part of the Units in the Initial Public Offering were issued with other freestanding instruments (i.e., Public Warrants) and as such, the initial carrying value of Class A Ordinary Shares classified as temporary equity will be the allocated proceeds determined in accordance with ASC 470-20. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable shares are affected by charges against additional paid-in capital, if any, and accumulated deficit.
As of September 30, 2024, the Class A ordinary shares subject to possible redemption reflected in the condensed balance sheet is reconciled in the following table:
Gross proceeds |
| $ | |
Less: | |
|
|
Proceeds allocated to Public Warrants | |
| ( |
Issuance costs allocated to Class A ordinary shares | |
| ( |
Plus: | |
|
|
Remeasurement of carrying value to redemption value | |
| |
Class A ordinary shares subject to possible redemption | | $ | |
Offering Costs associated with the Initial Public Offering and Sale of Private Placement Shares
The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $
Income Taxes
The Company accounts for income taxes under ASC Topic 740, Income Taxes, which 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. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2024 and December 31, 2023, there were
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands, Italy or the United States. As such, the Company’s tax provision was
Net Income Per Ordinary Share
The Company complies with accounting and disclosure requirements of ASC Topic 260, Earnings Per Share. Net income per share is computed by dividing net income by the weighted-average number of shares outstanding during the period. Remeasurement associated
10
ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
with the redeemable Class A ordinary shares is excluded from net income per share as the redemption value approximates fair value. Therefore, the income per share calculation allocates income shared pro rata between Class A and Class B ordinary shares. As a result, the calculated net income per share is the same for redeemable Class A ordinary shares, non-redeemable Class A ordinary shares and Class B ordinary shares. The Company has not considered the effect of the Public Warrants to purchase an aggregate of
The following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):
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| Three Months Ended |
| Three Months Ended |
| Nine Months Ended |
| Nine Months Ended | ||||||||||||||||||||||||||||
| | September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 | ||||||||||||||||||||||||||||
| | | | | Class A- | | Class B- | | | | | Class A- | | Class B- | | | | | Class A- | | Class B- | | | | | Class A- | | Class B- | ||||||||
| | Class A- | | non- | | non- | | Class A- | | non- | | non- | | Class A- | | non- | | non- | | Class A- | | non- | | non- | ||||||||||||
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| redeemable |
| redeemable |
| redeemable |
| redeemable |
| redeemable |
| redeemable(1) |
| redeemable |
| redeemable |
| redeemable |
| redeemable |
| redeemable |
| redeemable(1) | ||||||||||||
Basic and diluted net income per ordinary share: |
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Basic and diluted net income per share | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
| (1) | Excludes |
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, Fair Value Measurement (“ASC 820”), approximates the carrying amounts represented in the condensed balance sheet.
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 |
11
ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
| ● | 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. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. |
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”). Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities 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 are recognized as a non-cash gain or loss on the statements of operations.
The Public and Private Warrants are not precluded from equity classification and have been accounted for as such since the date of issuance, and each balance sheet date thereafter as long as they continue to meet the requirements for equity classification.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The amendments are effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.
In December 2023, the FASB issued Accounting Standards Update 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid. ASU 2023-09 requires entities to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible
12
ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
items, among others. Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction. ASU 2023-09 also requires entities to disclose net income taxes paid or received to federal, state and foreign jurisdictions, as well as by individual jurisdiction, subject to a five percent quantitative threshold. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is evaluating the impact of ASU 2023-09 on disclosures in our Financial Statements.
Our 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
The registration statement for the Company’s Initial Public Offering was declared effective on May 4, 2023. On May 9, 2023, the Company consummated the Initial Public Offering of
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of
Private Placement Shares are identical to the Class A Ordinary Shares included in the units sold in the Initial Public Offering, except that the Private Placement Shares: (i) are not transferable, assignable or salable until 30 days after the completion of our initial business combination and (ii) are entitled to registration rights.
The Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to any Private Placement Shares held by them in connection with the completion of our initial Business Combination, (ii) waive their redemption rights with respect to any Private Placement Shares held by them in connection with a shareholder vote to approve an amendment to our Amended and Restated Memorandum and Articles of Association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or certain amendments to our charter prior thereto or to redeem
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ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On December 6, 2021, the Sponsor acquired
On October 26, 2022,
The Founder Shares will automatically convert into shares of the Company’s Class A Ordinary Shares at any time at the option of the holders thereof or on the first business day following the completion of the initial Business Combination at a ratio such that the number of shares of the Class A Ordinary Shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis,
Promissory Note - Related Party
On June 24, 2024, the Sponsor agreed to loan the Company an aggregate of up to $
Administrative Support Agreement
The Company entered into an agreement commencing on May 4, 2023 through the earlier of the consummation of a Business Combination or the Company’s liquidation, to pay Alchemy Investment Management LLC, an affiliate of the Sponsor, a monthly fee of
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ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
$
Working Capital Loans
In addition, in order to finance transaction costs in connection with a 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 a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $
NOTE 6. COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of Founder Shares, Private Placement Shares and shares issued upon conversion of Working Capital Loans, if any, are entitled to registration rights pursuant to a registration rights agreement executed upon May 4, 2023. These holders are entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
Simultaneously with the Initial Public Offering, the Underwriter fully exercised the over-allotment option to purchase an additional
The Underwriter was paid a cash underwriting discount of $
Underwriter Shares
Upon closing of the Initial Public Offering, the underwriters purchased
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ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
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
NOTE 8. WARRANTS
Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a)
16
ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
The Public Warrants have an exercise price of $
Redemption of warrants when the price per share of Class A Ordinary Shares equals or exceeds $
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | upon a minimum of |
| ● | if, and only if the last reported sale price of Class A Ordinary Shares on each day of the Measurement Period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders equals or exceeds $ |
17
ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
The Company will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering the Class A Ordinary Shares issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class A Ordinary Shares is available throughout the Measurement Period. Any such exercise would not be on a cashless basis and would require the exercising warrant holder to pay the exercise price for each warrant being exercised.
In no event will the Company be required to net cash settle any warrant. If the Company is unable to complete a Business Combination within the Combination Period or during any Extension Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
The Company accounts for the
NOTE 9. FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
| | Amount at Fair | | | | | | | | | | |
Description |
| Value |
| Level 1 |
| Level 2 |
| Level 3 | ||||
September 30, 2024 (Unaudited) | | | | | | | | | | | | |
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Investments held in Trust Account: | | | | | | | | | | | | |
U.S. Treasury Securities | | $ | | | $ | | | $ | — | | $ | — |
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Description | | Value | | Level 1 | | Level 2 | | Level 3 | ||||
December 31, 2023 |
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ALCHEMY INVESTMENTS ACQUISITION CORP 1
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(UNAUDITED)
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the unaudited condensed balance sheet date up to the date that the unaudited condensed financial statements were issued.
On October 22, 2024, the Company issued an aggregate of
At the October 31, 2024 Annual Meeting, the shareholders of the Company approved the proposal to amend the Company’s Articles of Association as a special resolution, giving the Company the right to extend the date by which it has to complete a business for a three month extension or until February 9, 2025, then on a month-to-month basis thereafter, as determined by the Directors in their sole discretion, until September 9, 2025.
Immediately after the Annual Meeting, the Company extended the time to complete the business combination by
19
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Alchemy Investments Acquisition Corp 1. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Alchemy DeepTech Capital LLC. The following discussion and analysis of the Company’s 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 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 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 Report including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Report, words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions, as they relate to us or the Company’s management, 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 the Company’s management. 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. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated in the Cayman Islands on October 27, 2021 formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering (the “Initial Public Offering”) and the sale of the private placement shares, 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 or other sources.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities for the three months ended September 30, 2024 were financing activities,organizational activities, those necessary to prepare for our Initial Public Offering, described below, and those related to the search for a potential business combination target. We do not expect to generate any operating revenues until after the completion of our initial business combination. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended September 30, 2024, we had net income of $1,456,069, which resulted from operating costs of $158,154, offset by a gain on investments held in the Trust Account of $1,609,935, and dividend income of $4,288.
For the three months ended September 30, 2023, we had net income of $1,362,467, which resulted from operating costs of $174,629, offset by a gain on investments held in the Trust Account of $1,531,302, and dividend income of $5,794.
For the nine months ended September 30, 2024, we had net income of $4,183,639, which resulted from operating costs of $601,170, offset by a gain on investments held in the Trust Account of $4,775,370, and dividend income of $9,439.
For the nine months ended September 30, 2023, we had net income of $1,933,283, which resulted from operating costs of $435,549, offset by a gain on investments held in the Trust Account of $2,355,489, and dividend income of $13,343.
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Liquidity, Capital Resources and Going Concern
For the nine months ended September 30, 2024, net cash used in operating activities was $500,104, which was due to our net income of $4,183,639, offset by a gain on investments held in the Trust Account of $4,775,370 and changes in working capital of $91,627.
For the nine months ended September 30, 2023, net cash used in operating activities was $748,752, which was due to our net income of $1,933,283, offset by a gain on investments held in the Trust Account of $2,355,489 and changes in working capital of $326,546.
There were no cash flows from investing activities for the three months ended September 30, 2024.
For the nine months ended September 30, 2023, net cash used in investment activities was $116,725,000, which was due to the investment of cash into the Trust Account.
For the nine months ended September 30, 2024, net cash provided by financing activities was $530,000, which was due to the proceeds from the promissory note, related party.
For the nine months ended September 30, 2023, net cash provided by financing activities was $117,897,925, which was due to proceeds from the sale of Private Placement Shares of $5,955,000, proceeds from sale of Placement Units, net of underwriting discount paid of $112,700,000, and proceeds from the promissory note, related party of $59,025 offset by the repayment of the promissory note, related party of $435,522 and the payment of offering costs of $380,578.
On May 9, 2023, the Company consummated the Initial Public Offering of 11,500,000 units, (the “Units” and, with respect to the Class A ordinary shares included in the Units sold, the “Public Shares”), including 1,500,000 Units issued pursuant to the exercise of the underwriter’s over-allotment option in full, generating gross proceeds of $115,000,000, which is discussed in Note 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of and issued 538,000 and 57,500 private placement shares to Alchemy DeepTech Capital LLC (the “Sponsor”) and Cantor Fitzgerald & Co. (the “Underwriter”), respectively (together, the “Private Placement Shares”) at a price of $10.00 per share, generating gross proceeds of $5,955,000.
Following the closing of the Initial Public Offering on May 9, 2023, an amount of $116,725,000 from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Shares was placed in a trust account (the “Trust Account”)
As of September 30, 2024, the Company had $339,638 in cash and cash equivalents held outside of the Trust Account and a working capital deficit of $877,569.
The Company has incurred and expects to continue to incur significant costs in pursuit of the Company’s financing and acquisition plans. The Company anticipates that the cash held outside of the Trust Account as of September 30, 2024 will not be sufficient to allow the Company to operate for at least one year from the date these unaudited condensed financial statements are issued, and therefore substantial doubt about the Company’s ability to continue as a going concern exists. Management plans to address this uncertainty with the successful closing of a Business Combination. The Company has until November 9, 2024 to consummate a Business Combination. If a Business Combination is not consummated by November 9, 2024, there will be a mandatory liquidation and subsequent dissolution of the Company. The Company is in the process of identifying a potential company for an initial Business Combination but requires additional time. An Annual Meeting was held on October 31, 2024 and the shareholders of the Company approved amending the Company’s Articles of Association as a special resolution, giving the Company the right to extend from November 9, 2024 (the “Current Termination Date”) for an additional three months until February 9, 2025, and thereafter on a month-to-month basis, as determined by the Directors in their sole discretion, until September 9, 2025 (the “Extended Date”) – the date by which, if the Company has not consummated its initial Business Combination, the Company must liquidate and dissolve. However, there can be no assurance that the Company will be able to consummate any Business Combination by the Extended Date. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Contractual Obligations
On September 30, 2024, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.
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There are both $5,175,000 of deferred underwriting fees, as well as an aggregate of up to $530,000 in a promissory note due upon the completion of the Company’s business combination.
Critical Accounting Policies and Estimates
The preparation of unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America 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 unaudited condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates.
We have not identified critical accounting estimates.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The amendments are effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.
In December 2023, the FASB issued Accounting Standards Update 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid. ASU 2023-09 requires entities to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible items, among others. Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction. ASU 2023-09 also requires entities to disclose net income taxes paid or received to federal, state and foreign jurisdictions, as well as by individual jurisdiction, subject to a five percent quantitative threshold. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is evaluating the impact of ASU 2023-09 on disclosures in our Financial Statements.
Our 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.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (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, the unaudited condensed 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 auditor’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
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that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the consolidated 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 Initial Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our current chief executive officer and chief financial officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of September 30, 2024 pursuant to Rule 15d-15(e) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of September 30, 2024, our disclosure controls and procedures were effective.
Management’s Report on Internal Controls Over Financial Reporting
This Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Except as set forth below, as of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Prospectus in connection with the Initial Public Offering filed with the SEC on May 5, 2023. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
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We depend on a variety of U.S. and multi-national financial institutions to provide us with banking services. The default or failure of one or more of the financial institutions that we rely on may adversely affect our business and financial condition.
We maintain the majority of our cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions exceed insured limits. Market conditions can impact the viability of these institutions. In the event of the failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our liquidity, business and financial condition.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
On December 6, 2021, the sponsor acquired 4,312,500 founder shares for an aggregate purchase price of $50,000 (or approximately $0.01 per share) which was settled by paying for certain expenses on behalf of the Company. On October 26, 2022, 287,500 founder shares were surrendered by our sponsor for no consideration. These shares were then cancelled by the Company resulting in a decrease in the total number of founder shares outstanding from 4,312,500 shares to 4,025,000 shares. On February 7, 2023, 1,150,000 founder shares were surrendered and thereupon cancelled by the company resulting in a decrease in the total number of founder shares outstanding from 4,025,000 shares to 2,875,000 shares. Upon cancellation, 375,000 founder shares were subjected to forfeiture if the over-allotment option was not exercised in full or in part by our underwriter. All share amounts and related information have been retroactively restated to reflect the surrenders and cancellations. On May 5, 2023, the full over-allotment option was exercised, and therefore, the 375,000 founder shares were no longer subject to forfeiture.
Simultaneously with the closing of the initial public offering, on May 9, 2023, we consummated the sale of and issued 538,000 and 57,500 placement shares to the sponsor and the representative, respectively, at a price of $10.00 per share, generating gross proceeds of $5,955,000.
These issuances were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
No underwriting discounts or commissions were paid with respect to such sales.
On October 22, 2024, the Company issued an aggregate of 2,874,999 shares of its Class A ordinary shares, par value $0.0001 per share to Alchemy Deeptech Capital LLC, (the “Sponsor”), and the holder of the Company’s Class B ordinary shares, par value $0.0001 per share, upon the conversion of an equal number of Class B Shares. The Class A Shares issued in connection with the Conversion are subject to the same restrictions as applied to the Class B Shares before the Conversion, including, among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial business combination as described in the prospectus for our initial public offering. Following the Conversion, there are 14,970,499 Class A Shares and one Class B Share issued and outstanding.
Use of Proceeds
In connection with the initial public offering, we incurred offering costs of $9,088,588 (including deferred underwriting commissions of $5,175,000). Other incurred offering costs consisted principally of preparation fees related to the initial public offering. After deducting the underwriting discounts and commissions (excluding the deferred portion, which amount will be payable upon consummation of the initial business combination, if consummated) and the initial public offering expenses, $116,725,000 of the net proceeds from our initial public offering and the sale of the placement shares were placed in the trust account.
There has been no material change in the planned use of the proceeds from the initial public offering and the sale of the placement shares as is described in the company’s final prospectus related to the initial public offering.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During the nine months ended September 30, 2024,
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ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
Exhibit No. |
| Description |
3.1 | | Amended and Restated Memorandum and Articles of Association (1) |
4.1 | | |
4.2 | | |
4.3 | | |
4.4 | | Warrant Agreement between Continental Stock Transfer & Trust Company and the Company (1) |
10.1 | | |
10.2 | | |
10.3 | | Private Placement Shares Purchase Agreement between the Company, and the Sponsor (1) |
10.4 | | Private Placement Shares Purchase Agreement between the Company, and the Underwriter (1) |
10.5 | | Administrative Services Agreement between the Company and Alchemy Investment Management LLC (1) |
10.6 | | Letter Agreement among the Company, the Sponsor and the Company’s officers and directors (1) |
31.1 | | |
31.2 | | |
32.1* | | |
32.2* | | |
101.INS | | Inline XBRL Instance Document. |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document. |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* 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.
(1) Incorporated by reference to our Current Report on Form 8-K, filed with the SEC on May 9, 2023
(2) Incorporated by reference to our Registration Statement on Form S-1, as amended, initially filed with the SEC on December 2, 2022.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ALCHEMY INVESTMENTS ACQUISITION CORP 1 | ||
| |
|
November 14, 2024 | By: | /s/ Mattia Tomba |
| | Name: Mattia Tomba |
| | Title: Co-Chief Executive Officer |
| |
|
November 14, 2024 | By: | /s/ Harshana Sidath Jayaweera |
| | Name: Harshana Sidath Jayaweera |
| | Title: Chief Financial Officer |
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Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Mattia Tomba, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 of Alchemy Investments Acquisition Corp 1; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and |
b. | (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/334-49313); and |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 14, 2024 | | |
| By: | /s/ Mattia Tomba |
| Mattia Tomba | |
| Co-Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Harshana Sidath Jayaweera, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 of Alchemy Investments Acquisition Corp 1; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and |
b. | (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/334-49313); and |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 14, 2024 | | |
| By: | /s/ Harshana Sidath Jayaweera |
| Harshana Sidath Jayaweera | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Alchemy Investments Acquisition Corp 1 (the “Company”) on Form 10-Q for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mattia Tomba, Co-Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 14, 2024 | | |
| By: | /s/ Mattia Tomba |
| Mattia Tomba | |
| Co-Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Alchemy Investments Acquisition Corp 1 (the “Company”) on Form 10-Q for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Harshana Sidath Jayaweera, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 14, 2024 | | |
| By: | /s/ Harshana Sidath Jayaweera |
| Harshana Sidath Jayaweera | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |