Cartesian Growth Corporation II(RENEU) - 2024 Q4 - Annual Report

Financial Risks and Concerns - The company may be unable to complete its initial business combination if funds outside the trust account are insufficient to operate until at least the Extended Date[86]. - Public shareholders may receive approximately $10.30 per share or less upon liquidation of the trust account if the initial business combination is not completed[87]. - If the company cannot locate a suitable target business, it may be forced to liquidate, resulting in shareholders receiving less than$ 10.30 per share[97]. - The company expects to incur significant costs in pursuit of acquisition plans, which may impact its financial condition[89]. - Loans from the sponsor or management team may be necessary to fund operations if external financing is not secured[88]. - The company may face write-downs or impairments post-acquisition, negatively affecting financial results and shareholder value[90]. - The potential for shareholder redemption increases if the target business does not meet the company's general criteria and guidelines[95]. - The company may face challenges in obtaining additional financing for its initial business combination, which could lead to restructuring or abandonment of the transaction[147]. - If the initial business combination is not completed, public shareholders may receive approximately $10.30 per share upon liquidation of the trust account[147]. - The independent registered public accounting firm's report expresses substantial doubt about the company's ability to continue as a going concern, raising concerns about liquidity and potential mandatory liquidation[214]. Acquisition and Business Combination Challenges - The requirement for the target business to have a fair market value of at least 80% of the trust account balance may limit potential acquisition opportunities[97]. - The company is not obligated to obtain an independent valuation for the business it acquires, relying instead on the judgment of its board of directors[98]. - The company may only complete one business combination with the net proceeds from the initial public offering, which could lead to a lack of diversification and increased risks[110]. - If the company completes its initial business combination with a complex business, it may face numerous operational risks that could delay or prevent achieving desired results[114]. - The company may seek to complete its initial business combination with a private company, which may result in limited information and potential profitability issues[112]. - The company may attempt to simultaneously complete business combinations with multiple targets, which could increase costs and risks[111]. - The company may face significant challenges and costs in managing cross-border business operations, which could negatively impact financial and operational performance[122]. - The company may face additional risks if it completes a business combination with a company located outside of the United States, including difficulties in enforcing legal rights[120]. - Changes in laws or regulations could adversely affect the company's ability to negotiate and complete its initial business combination, impacting its results of operations[208]. Shareholder and Governance Issues - Founder shares will equal 20% of the total number of ordinary shares issued upon completion of the initial public offering, differing from typical blank check company structures[99]. - The independent directors have a financial interest in the founder shares, which may create a conflict of interest in selecting target businesses[105]. - Initial shareholders collectively own 20% of the total founder shares and Class A ordinary shares, influencing votes on amendments and business combinations[143]. - The company has a provision allowing amendments to its memorandum and articles of association with a two-thirds majority vote, which is lower than the 90%-100% required by many blank check companies[142]. - The absence of a specified maximum redemption threshold may allow the company to complete an initial business combination without substantial shareholder agreement[137]. - Provisions in the company's amended and restated memorandum may inhibit takeovers, potentially limiting share price appreciation[138]. - Amendments to the company's constitutional documents may be sought to facilitate initial business combinations, which some shareholders may not support[139]. - Shareholders holding more than 15% of Class A ordinary shares may lose the ability to redeem excess shares if the company seeks shareholder approval for its initial business combination[179]. Regulatory and Compliance Issues - The company must comply with Sarbanes-Oxley Act requirements, which may increase the time and costs associated with completing an acquisition[159]. - The company is incorporated in the Cayman Islands, which may limit investors' ability to protect their rights through U.S. federal courts[160]. - Financial statement requirements may restrict the pool of potential target businesses for acquisition, as some may not provide necessary disclosures in time[158]. - The company is classified as an "emerging growth company," which allows it to take advantage of certain exemptions from disclosure requirements, potentially making its securities less attractive to investors[205]. - The company has not opted out of the extended transition period under the JOBS Act, which may complicate comparisons of its financial statements with those of other public companies[206]. - The company is a "smaller reporting company," allowing it to provide only two years of audited financial statements, which may hinder comparisons with other public companies[207]. - If deemed an investment company under the Investment Company Act, the company would face burdensome compliance requirements and may abandon efforts to complete a business combination[210]. Market and Operational Risks - Increased competition among special purpose acquisition companies (SPACs) for attractive targets may lead to higher costs and difficulties in finding suitable acquisition opportunities[129]. - Uncertainty in international economic and political relationships, including tariffs and regulatory changes, could materially affect the company's ability to identify and consummate potential targets[131]. - The company may not maintain control of a target business post-acquisition, which could impact operational effectiveness[132]. - Changes in the market for directors and officers liability insurance could complicate the negotiation and completion of initial business combinations[134]. - The market for the company's securities may not fully develop or be sustained, adversely affecting liquidity and price[170]. - The company may face increased scrutiny from state regulators if it is no longer listed on Nasdaq, affecting its ability to sell securities[169]. - Cyber incidents or attacks could lead to information theft, operational disruption, and financial loss, as the company may not have sufficient resources to protect against such occurrences[215]. Financial Instruments and Share Dilution - The company issued 7,666,666 warrants as part of its initial public offering and 8,900,000 private placement warrants, which could affect the market price of Class A ordinary shares[150]. - Changes in the value of warrants, classified as liabilities, may lead to fluctuations in financial results and impact the market price of Class A ordinary shares[151]. - The company may issue additional Class A ordinary shares to complete its initial business combination, which could substantially dilute existing shareholders' interests[182]. - The company is authorized to issue up to 200,000,000 Class A ordinary shares, with potential anti-dilution provisions affecting the conversion of founder shares[183]. - The company has the ability to amend the terms of the warrants with the approval of at least 65% of the outstanding public warrants, which could be adverse to holders[178]. - The grant of registration rights to sponsors may complicate the initial business combination and adversely affect the market price of Class A ordinary shares[184]. - Significant dilution of equity interest for investors in the initial public offering may occur due to the issuance of a substantial number of Class A ordinary shares[185]. Conflicts of Interest - Conflicts of interest may arise as executive officers and directors are not required to commit full time to the company's affairs[190]. - The personal and financial interests of directors and officers may influence their motivation in selecting a target business[194]. - The company has not adopted a policy to prohibit directors and officers from having financial interests in transactions, leading to potential conflicts[193]. - The trust account funds may be subject to third-party claims, potentially reducing the per-share redemption amount below$ 10.30[196]. - If claims against the trust account are successful, the funds available for initial business combination and redemptions could be reduced[198]. - The company may face challenges in completing the initial business combination if third-party claims reduce trust account funds[199]. - The company may face a reduction in the amount of funds in the trust account available for distribution to public shareholders if indemnification obligations are not enforced, potentially lowering the per-share amount below $10.30[200]. - Shareholders could be held liable for claims by third parties against the company to the extent of distributions received upon redemption of their shares, which could be viewed as unlawful payments if the company is unable to pay its debts[201]. - If the company files for bankruptcy after distributing proceeds from the trust account, a court may seek to recover such proceeds, exposing the board of directors to claims of punitive damages[202].