Cartesian Growth Corp II 10-Q for FY2023 Q2
Cartesian Growth Corp II (RENEF)
About this 10-Q
Cartesian Growth Corp II filed this 10-Q on August 10, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).
Headline figures
Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net income
- $3.72M
- compared with a net loss of $385.39K a year earlier
- Diluted EPS
- $0.13
- compared with -$0.02 a year earlier
Table of Contents
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
(Address of principal executive offices) |
(Zip Code) | |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-third of one Warrant |
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| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
| Emerging growth company | ||||||
Table of Contents
CARTESIAN GROWTH CORPORATION II
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023
TABLE OF CONTENTS
| Page | ||||
| Part I. Financial Information |
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| Item 1. Financial Statements |
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| Condensed Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022 |
1 | |||
| 2 | ||||
| 3 | ||||
| Condensed Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (Unaudited) |
4 | |||
| 5 | ||||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
16 | |||
| Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk |
19 | |||
| 19 | ||||
| Part II. Other Information |
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| 20 | ||||
| 20 | ||||
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
20 | |||
| 20 | ||||
| 20 | ||||
| 20 | ||||
| 21 | ||||
| 22 | ||||
Table of Contents
June 30, 2023 (Unaudited) |
December 31, 2022 |
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ASSETS |
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Current assets |
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Cash |
$ | $ | ||||||
Prepaid expenses |
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Total Current assets |
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Cash and marketable securities held in Trust Account |
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TOTAL ASSETS |
$ |
$ |
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LIABILITIES AND SHAREHOLDERS’ DEFICIT |
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Current liabilities |
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Accrued expenses |
$ | $ | ||||||
Accrued offering costs |
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Total Current liabilities |
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Warrant liabilities |
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Convertible promissory note – related party, at fair value |
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Deferred underwriting fee |
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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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Additional paid-in capital |
— | |||||||
Accumulated deficit |
( |
) | ( |
) | ||||
TOTAL SHAREHOLDERS’ DEFICIT |
( |
) |
( |
) | ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT |
$ |
$ |
||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Operating and formation costs |
$ | $ | $ | $ | ||||||||||||
Loss from operations |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Other income (expense): |
||||||||||||||||
Change in fair value of warrant liabilities |
( |
) | ( |
) | ||||||||||||
Change in fair value of convertible promissory note – related party |
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Transaction costs allocated to warrant liabilities |
( |
) | ( |
) | ||||||||||||
Interest earned on cash and marketable securities held in Trust Account |
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Total other income (expense), net |
( |
) | ( |
) | ||||||||||||
Net income (loss) |
$ |
$ |
( |
) |
$ |
$ |
( |
) | ||||||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption |
||||||||||||||||
Basic and diluted net income (loss) per share, shares subject to possible redemption |
$ |
$ |
( |
) |
$ |
$ |
( |
) | ||||||||
Basic and diluted weighted average shares outstanding, non-redeemable Class B ordinary shares |
||||||||||||||||
Basic and diluted net income (loss) per share, non-redeemable Class B ordinary shares |
$ |
$ |
( |
) |
$ |
$ |
( |
) | ||||||||
Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-in |
Accumulated |
Total Shareholders’ |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Deficit |
||||||||||||||||||||||
Balance — January 1, 2023 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Remeasurement for Class A ordinary shares subject to possible redemption amount |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
Net income |
— | — | ||||||||||||||||||||||||||
Balance – March 31, 2023 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Remeasurement for Class A ordinary shares subject to possible redemption amount |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
Net income |
— | — | ||||||||||||||||||||||||||
Balance – June 30, 2023 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-in |
Accumulated |
Total Shareholders’ |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Equity (Deficit) |
||||||||||||||||||||||
Balance — January 1, 2022 |
$ |
$ |
$ |
$ |
( |
) |
$ |
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Net loss |
— | — | — | — | — | — | — | |||||||||||||||||||||
Balance – March 31, 2022 |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||
Remeasurement for Class A ordinary shares to redemption amount |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Sale of |
— | — | — | — | — | |||||||||||||||||||||||
Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
Balance – June 30, 2022 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Six months Ended June 30, |
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2023 |
2022 |
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Cash Flows from Operating Activities: |
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Net income (loss) |
$ | $ | ( |
) | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
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Interest earned on cash and marketable securities held in Trust Account |
( |
) | ( |
) | ||||
Transaction costs |
||||||||
Change in fair value of convertible promissory note – related party |
( |
) | ( |
) | ||||
Change in fair value of warrant liabilities |
( |
) | ||||||
Changes in operating assets and liabilities: |
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Prepaid expenses and other current assets |
( |
) | ||||||
Accrued expenses |
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Net cash used in operating activities |
( |
) |
( |
) | ||||
Cash Flows from Investing Activities: |
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Investment of cash in Trust Account |
( |
) | ||||||
Net cash used in investing activities |
( |
) | ||||||
Cash Flows from Financing Activities: |
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Proceeds from sale of Units, net of underwriting commissions paid |
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Proceeds from sale of Private Placement warrants |
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Proceeds from promissory note – related party |
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Repayment of promissory note – related party |
( |
) | ||||||
Proceeds from convertible promissory note – related party |
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Payment of offering costs |
( |
) | ( |
) | ||||
Net cash (used in) provided by financing activities |
( |
) |
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Net Change in Cash |
( |
) |
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Cash – Beginning of period |
||||||||
Cash – End of period |
$ |
$ |
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Non-Cash investing and financing activities: |
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Offering costs included in accrued offering costs |
$ | $ | ||||||
Remeasurement of Class A ordinary shares subject to possible redemption |
$ | $ | ||||||
Deferred offering costs included in accrued offering costs |
$ | $ | ||||||
Gross proceeds |
$ | |||
Less: |
||||
Proceeds allocated to public warrants |
( |
) | ||
Class A Ordinary Shares issuance costs |
( |
) | ||
Plus: |
||||
Remeasurement of carrying value to redemption |
||||
Class A Ordinary Shares subject to possible redemption, December 31, 2022 |
$ |
|||
Plus: |
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Remeasurement of carrying value to redemption |
||||
Class A Ordinary Shares subject to possible redemption, June 30, 2023 |
$ |
|||
Three Months Ended June 30, |
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2023 |
2022 |
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Class A |
Class B |
Class A |
Class B |
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Basic and diluted net income (loss) per ordinary share Numerator: |
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Allocation of net income (loss) |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
Denominator: |
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Basic and diluted weighted average shares outstanding |
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Basic and diluted net income (loss) per ordinary share |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
Six Months Ended June 30, |
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2023 |
2022 |
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Class A |
Class B |
Class A |
Class B |
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Basic and diluted net income (loss) per ordinary share Numerator: |
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Allocation of net income (loss) |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
Denominator: |
||||||||||||||||
Basic and diluted weighted average shares outstanding |
||||||||||||||||
Basic and diluted net income (loss) per ordinary share |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
| • | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| • | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| • | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
| • | in whole and not in part; |
| • | at a price of $ |
| • | upon not less than |
| • | if, and only if, the last reported sale price of the Class A Ordinary Shares equals or exceeds $ |
Description |
Level |
June 30, 2023 |
December 31, 2022 |
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Liabilities: |
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Warrant liability – Public warrants |
1 | $ | $ | |||||||||
Warrant liability – Private Placement Warrants |
3 | $ | $ | |||||||||
Convertible Promissory Note |
3 | $ | $ | |||||||||
June 30, 2023 |
December 31, 2022 |
May 10, 2022 (Initial Measurement) |
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Trading stock price |
$ | $ | $ | |||||||||
Exercise price |
$ | $ | $ | |||||||||
Expected term (in years) |
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Volatility |
% | % | % | |||||||||
Risk-free rate |
% | % | % | |||||||||
Dividend yield |
% | % | % | |||||||||
Public Warrant Liabilities |
Private Warrant Liabilities |
Total Warrant Liabilities |
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Fair value as of October 13, 2021 (inception) |
$ | — | $ | — | $ | — | ||||||
Initial measurement on May 10, 2022 |
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| ( |
) | ( |
) | |||||||||
Transfer to Level 1 |
( |
) | — | ( |
) | |||||||
Fair value as of December 31, 2022 |
$ |
— |
$ |
$ |
||||||||
— |
( |
) | ( |
) | ||||||||
| Fair value as of March 31, 2023 |
$ |
— |
$ |
$ |
||||||||
— |
( |
) | ( |
) | ||||||||
Fair value as of June 30, 2023 |
$ |
— |
$ |
$ |
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Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Cartesian Growth Corporation II. References to our “management” or our “management team” refer to our officers and directors, and references to the “sponsor” refer to CGC II Sponsor LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of an initial Business Combination (as defined below), the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”), on March 30, 2023. 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 13, 2021 formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or engaging in any other similar business combination with one or more businesses or entities (the “business combination”).
We may pursue our initial business combination in any business industry or sector, however, we have focused on seeking high-growth businesses with proven or potential transnational operations or outlooks in order to capitalize on the experience, reputation, and network of our management team. Furthermore, we seek target businesses where we believe we will have an opportunity to drive ongoing value creation after our initial business combination is completed.
We intend to effectuate our initial business combination using cash from the net proceeds of our initial public offering, the sale of the private placement warrants, the sponsor loan (as defined below), our share capital or a combination of cash, share capital and debt.
We expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete an initial business combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception through June 30, 2023 were organizational activities and those necessary to prepare for our initial public offering, and since our initial public offering, our activity has been limited to identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We generate non-operating income in the form of interest income on cash and marketable securities held in the trust account (the “trust account”) with Continental Stock Transfer & Trust Company acting as trustee, located in the United States, established for the benefit of our public shareholders. 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 in connection with searching for, and completing, our initial business combination.
For the three months ended June 30, 2023, we had net income of $3,719,216 which consists of a change in the fair value of warrant liabilities of $102,116, a change in the fair value of the convertible promissory note – related party of $1,102,927, and interest earned on cash and marketable securities held in the trust account of $2,825,634, offset by operating and formation costs of $311,461.
For the six months ended June 30, 2023, we had net income of $7,429,973 which consists of a change in the fair value of warrant liabilities of $1,166,032, a change in the fair value of the convertible promissory note – related party of $1,086,965, and interest earned on cash and marketable securities held in the trust account of $5,727,752, offset by operating and formation costs of $550,776.
For the three and six months ended June 30, 2022, we had a net loss of $385,392 which consists of a change in the fair value of the convertible promissory note – related party of $434,451, and interest earned on cash and marketable securities held in the Trust Account of $14,324, offset by operating costs of $225,391, a change in the fair value of warrant liabilities of $412,792, and transaction costs allocated to warrant liabilities of $195,984.
16
Table of Contents
Liquidity and Capital Resources
Until the consummation of our initial public offering, our only source of liquidity was an initial purchase of Class B ordinary shares, par value $0.0001 per share by the sponsor and loans from the sponsor.
On May 10, 2022, we consummated the initial public offering of 23,000,000 units, including the full exercise by underwriters of their over-allotment option, at a purchase price of $10.00 per unit, generating total gross proceeds of $230,000,000. Simultaneously with the closing of the initial public offering, we consummated the sale of 8,900,000 private placement warrants, each exercisable to purchase one Class A ordinary share at a price of $11.50 per share, at a price of $1.00 per private placement warrant in a private placement to the sponsor, Cantor Fitzgerald & Co. and Piper Sandler & Co., generating gross proceeds of $8,900,000.
Simultaneously with the consummation of the initial public offering, the sponsor loaned us $4,600,000 at no interest (the “sponsor loan”). The sponsor loan will be repaid or converted into sponsor loan warrants (the “sponsor loan warrants”) at a conversion price of $1.00 per sponsor loan warrant, at the sponsor’s discretion. The sponsor loan warrants will be identical to the private placement warrants. If we do not complete a business combination, we will not repay the sponsor loan from amounts held in the trust account, and the proceeds held in the trust account will be distributed to the holders of the Class A ordinary shares.
A total of $236,900,000 ($10.30 per unit) of the net proceeds from the initial public offering, including the full exercise of the over-allotment option, the sale of the private placement warrants and the sponsor loan, was placed in the trust account. Transaction costs of the initial public offering amounted to $16,804,728, consisting of $4,600,000 of underwriting commissions, $11,500,000 of deferred underwriting commissions and $704,728 of other offering costs.
For the six months ended June 30, 2023, cash used in operating activities was $256,034. Net income of $7,429,973 was affected by interest earned on cash and marketable securities held in the trust account of $5,727,752, a change in the fair value of a convertible promissory note of $1,086,965 and a change in the fair value of warrant liabilities of $1,166,032. Changes in operating assets and liabilities was affected by $294,742 of cash provided for operating activities.
As of June 30, 2023, we had cash and marketable securities held in the trust account of $245,473,659 (including approximately $8,573,659 of interest income consisting of U.S. treasury bills with a maturity of 185 days or less). We may withdraw interest from the trust account to pay taxes, if any. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less any taxes payable), to complete our initial business combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of June 30, 2023, we had cash held outside of the trust account of $217,633 available for working capital needs. We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay for directors and officers liability insurance premiums.
In order to fund working capital deficiencies or finance transaction costs in connection with a business combination, the sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required (the “working capital loans”). If we complete a business combination, we would repay such loaned amounts. In the event that a business combination does not close, we may use a portion of the funds held outside the trust account to repay such loaned amounts but no proceeds from the trust account would be used for such repayment. Up to $1,500,000 of the working capital loans may be converted into warrants at a price of $1.00 per warrant at the option of the lender. The warrants will be identical to the private placement warrants, including, as to exercise price, exercisability and exercise period. As of June 30, 2023 and December 31, 2022, we had no borrowings under any working capital loans.
Going Concern
In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 205-40, “Presentation of Financial Statements – Going Concern,” management has determined that our liquidity condition and liquidation date raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after November 10, 2023.
17
Table of Contents
As of June 30, 2023, we had $217,633 in our operating bank accounts, $245,473,659 in marketable securities held in the trust account to be used for the completion of a business combination and/or for the redemption of the public shares if we are unable to complete a business combination by November 10, 2023 (subject to applicable law), and working capital of $80,713.
Until the consummation of a business combination or our liquidation, we will use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay for directors and officers liability insurance premiums. 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 our officers and directors may, but are not obligated to, loan us working capital loans.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2023 and December 31, 2022.
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations, operating lease obligations or other long-term liabilities, other than an agreement to pay the sponsor a sum of $10,000 per month for office space, utilities, secretarial support and administrative services. We began incurring these fees on May 5, 2022 and will continue to incur these fees on a monthly basis until the earlier of the completion of an initial business combination and our liquidation.
The underwriters of our initial public offering are entitled to a deferred underwriting commission of $0.50 per unit, or $11,500,000 in the aggregate. Subject to the terms of the underwriting agreement for our initial public offering, (i) the deferred underwriting commission was placed in the trust account and will be released to the underwriters only upon the consummation of our initial business combination and (ii) the deferred underwriting commission will be waived by the underwriters in the event that we do not complete a business combination.
We have engaged a legal advisor to provide services related to the consummation of an initial business combination. In connection with this agreement, we may be required to pay the legal advisor’s fees in connection with its services contingent upon a successful initial business combination. If a business combination does not occur, we would not be required to pay these contingent fees. There can be no assurance that we will complete a business combination.
Critical Accounting Policies
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 financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Warrant Liabilities
We account for the warrants issued in connection with the Initial Public Offering, which are discussed in Note 3, Note 4 and Note 9 to the unaudited condensed financial statements included elsewhere in this Quarterly Report, in accordance with FASB ASC Topic 815-40, “Derivatives and Hedging, Contracts in Entity’s Own Equity.” Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, we classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement of operations.
Ordinary Shares Subject to Possible Redemption
In accordance with FASB ASC 480-10-S99, redemption provisions not solely within our control require ordinary shares subject to redemption to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of FASB ASC 480-10-S99. All of the 23,000,000 Class A ordinary shares contain a redemption feature which allows for the redemption of such public shares in connection with our liquidation, if there is a shareholder vote or tender offer in connection with an initial Business Combination and in connection with certain amendments to our amended and restated memorandum and articles of association. Accordingly, at June 30, 2023, all Class A Ordinary Shares subject to possible redemption are presented at redemption value as temporary equity, outside of shareholders’ deficit on the balance sheets.
18
Table of Contents
We recognize changes in redemption value immediately as they occur and adjust the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
Net Income (Loss) Per Ordinary Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share,” pursuant to which net income (loss) per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period. We have two classes of shares, Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. Accretion associated with the redeemable Class A ordinary shares is excluded from income (loss) per ordinary share as the redemption value approximates fair value.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.
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 and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2023, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter of 2023 covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our 2022 Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our 2022 Annual Report, except we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On May 10, 2022, we consummated the initial public offering of 23,000,000 units, including the full exercise by underwriters of their over-allotment option, at a purchase price of $10.00 per unit, generating total gross proceeds of $230,000,000. The securities sold in our initial public offering were registered under the Securities Act on registration statement on Form S-1 (File No. 333-261866). The registration statement became effective on March 5, 2022.
A total of $236,900,000 of the net proceeds from the initial public offering, the sale of the private placement warrants and the sponsor loan was deposited in a trust account established for the benefit of our public shareholders, with Continental Stock Transfer & Trust Company acting as trustee. For a description of the use of the proceeds generated in the initial public offering, see Part I, Item 2 of this Quarterly Report.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CARTESIAN GROWTH CORPORATION II | ||||||
| Date: August 10, 2023 | By: | /s/ Peter Yu | ||||
| Name: | Peter Yu | |||||
| Title: | Chief Executive Officer | |||||
| (Principal Executive Officer) | ||||||
| Date: August 10, 2023 | By: | /s/ Beth Michelson | ||||
| Name: | Beth Michelson | |||||
| Title: | Chief Financial Officer | |||||
| (Principal Financial and Accounting Officer) | ||||||
22
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
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, Peter Yu, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Cartesian Growth Corporation II; |
| 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(s) 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)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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(s) 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: August 10, 2023
| /s/ Peter Yu |
| Peter Yu |
| Chief Executive Officer |
| (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
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, Beth Michelson, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Cartesian Growth Corporation II; |
| 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(s) 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)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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(s) 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: August 10, 2023
| /s/ Beth Michelson |
| Beth Michelson |
| Chief Financial Officer |
| (Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
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 Cartesian Growth Corporation II (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), I, Peter Yu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of 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. |
Dated: August 10, 2023
| /s/ Peter Yu |
| Peter Yu |
| Chief Executive Officer |
| (Principal Executive Officer) |
EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
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 Cartesian Growth Corporation II (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), I, Beth Michelson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of 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. |
Dated: August 10, 2023
| /s/ Beth Michelson |
| Beth Michelson |
| Chief Financial Officer |
| (Principal Financial and Accounting Officer) |