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Cartesian Growth II(RENE) - 2022 Q4 - Annual Report
RENECartesian Growth II(RENE)2023-03-30 20:06

Acquisition Plans and Financial Risks - The company expects to incur significant costs in pursuit of its acquisition plans and may not have sufficient funds available outside of the trust account to operate until at least November 10, 2023[81]. - The company may depend on loans from its sponsor or management team to fund its search for a business combination if net proceeds from the initial public offering are insufficient[83]. - The company may incur substantial debt to complete the initial business combination, which could negatively impact the value of shareholders' investments[104]. - The company may face significant risks if it combines with an early-stage or financially unstable business, including volatile revenues and difficulties in retaining key personnel[90]. - The company acknowledges that extensive due diligence may not uncover all material issues with a target business, potentially leading to write-downs or other charges post-combination[85]. - The company may face increased costs and risks if attempting to complete multiple business combinations simultaneously[108]. - The company may face additional risks if it completes its initial business combination with a business located outside of the United States, including currency fluctuations and longer payment cycles[113]. - The inability to enforce legal rights in the target's jurisdiction could result in significant losses in business opportunities or capital[116]. - Managing cross-border operations may lead to increased costs and challenges, negatively impacting financial performance[117]. - The company may face challenges in completing its initial business combination due to the grant of registration rights to its sponsors[173]. Shareholder Redemption and Liquidation - If the initial business combination is not completed by November 10, 2023, public shareholders may receive approximately 10.30pershareorlessuponliquidationofthetrustaccount[82].−Ifthecompanyisunabletolocateasuitabletargetbusiness,itmaybeforcedtoliquidate,resultinginshareholdersreceivinglessthan10.30 per share or less upon liquidation of the trust account[82]. - If the company is unable to locate a suitable target business, it may be forced to liquidate, resulting in shareholders receiving less than 10.30 per share[91]. - If the company is required to liquidate before distributing the trust account funds, investors may have to wait beyond the ten business days following the 18-month initial business combination period for redemption proceeds[86]. - The trust account funds may be subject to third-party claims, potentially reducing the per-share redemption amount below 10.30[186].−Theper−shareredemptionamountforpublicshareholderscouldbelessthan10.30[186]. - The per-share redemption amount for public shareholders could be less than 10.30 due to potential claims by creditors against the trust account[188]. - Shareholders holding more than 15% of Class A ordinary shares may lose the ability to redeem those excess shares without prior consent during the initial business combination[169]. - If the initial business combination is not completed by November 10, 2023, the company is obligated to redeem 100% of public shares at approximately 10.30pershare[140].CorporateGovernanceandConflictsofInterest−Thecompanyisnotrequiredtoobtainanindependentopiniononthefairnessofthepricepaidforthebusiness,relyinginsteadonthejudgmentofitsboardofdirectors[92].−Thefinancialinterestsofindependentdirectorsinfoundersharesmaycreatepotentialconflictsofinterestinselectingtargetbusinesses[101].−Thecompanyhasnotadoptedapolicytopreventconflictsofinterestamongitsdirectorsandexecutiveofficersregardingbusinessopportunities[183].−Initialshareholderscollectivelyown2010.30 per share[140]. Corporate Governance and Conflicts of Interest - The company is not required to obtain an independent opinion on the fairness of the price paid for the business, relying instead on the judgment of its board of directors[92]. - The financial interests of independent directors in founder shares may create potential conflicts of interest in selecting target businesses[101]. - The company has not adopted a policy to prevent conflicts of interest among its directors and executive officers regarding business opportunities[183]. - Initial shareholders collectively own 20% of the total founder shares and Class A ordinary shares, which may influence voting on amendments and business combinations[137]. - The absence of a specified maximum redemption threshold may allow the company to complete a business combination despite substantial shareholder disagreement[130]. - Provisions in the company's memorandum may inhibit takeovers, potentially limiting share price appreciation for investors[131]. - Amendments to the company's constitutional documents may be sought to facilitate business combinations, which could affect shareholder rights[133]. Regulatory and Compliance Risks - 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[195]. - The company may remain a smaller reporting company until market value of its ordinary shares held by non-affiliates exceeds 250 million or annual revenues exceed 100million[198].−Changesinlawsorregulationscouldadverselyaffectthecompany′sabilitytonegotiateandcompleteitsinitialbusinesscombination[199].−ProposedSECrulesmayincreasecostsandtimeneededtonegotiateandcompleteaninitialbusinesscombination[200].−IfdeemedaninvestmentcompanyundertheInvestmentCompanyAct,thecompanymayfaceburdensomecompliancerequirementsandrestrictionsonitsactivities[201].−TheSEChasindicatedthatSPACsnotcompletingtheirinitialbusinesscombinationwithintheproposedtimeframemaybedeemedsubjecttotheInvestmentCompanyAct[204].−ThecompanyintendstocomplywiththeproposedsafeharborruleundertheInvestmentCompanyActtoavoidbeingclassifiedasaninvestmentcompany[205].FinancialInstrumentsandShareStructure−Thecompanyhas5,750,000foundersharesoutstanding,representing20100 million[198]. - Changes in laws or regulations could adversely affect the company's ability to negotiate and complete its initial business combination[199]. - Proposed SEC rules may increase costs and time needed to negotiate and complete an initial business combination[200]. - If deemed an investment company under the Investment Company Act, the company may face burdensome compliance requirements and restrictions on its activities[201]. - The SEC has indicated that SPACs not completing their initial business combination within the proposed timeframe may be deemed subject to the Investment Company Act[204]. - The company intends to comply with the proposed safe harbor rule under the Investment Company Act to avoid being classified as an investment company[205]. Financial Instruments and Share Structure - The company has 5,750,000 founder shares outstanding, representing 20% of the total number of outstanding public shares and founder shares after the initial public offering[100]. - The private placement warrants total 8,900,000, each exercisable for one Class A ordinary share at 11.50 per share, with 6,600,000 warrants purchased by the sponsor[100]. - The company issued 7,666,666 warrants as part of its initial public offering and an additional 8,900,000 private placement warrants, which could affect the attractiveness of the company as an acquisition target[143]. - The accounting treatment of warrants as liabilities may lead to fluctuations in financial results and affect the market price of Class A ordinary shares[145]. - The company may face difficulties in completing an initial business combination if it needs to issue additional shares at a price below 9.20,whichcouldadjusttheexercisepriceofwarrants[147].−Thecompanymayissueupto200,000,000ClassAordinaryshares,with180,000,000currentlyauthorizedbutunissued[170].−TheissuanceofadditionalClassAordinarysharescouldsignificantlydilutetheequityinterestofexistinginvestors[176].−TheClassBordinaryshareswillautomaticallyconvertintoClassAordinarysharesatthetimeoftheinitialbusinesscombination[170].OperationalandManagementRisks−Thecompanyisdependentonasmallgroupofkeypersonnel,includingtheCEOandCFO,foritsoperationsandfuturebusinesscombinations[175].−Themanagementteam’spastperformancemaynotbeindicativeoffuturesuccessinidentifyingsuitablebusinesscombinations[174].−Thecompanydoesnothaveemploymentagreementsorkey−maninsuranceforitsexecutiveofficers,whichcouldimpactoperationsifkeypersonnelleave[175].−Cyberincidentscouldleadtoinformationtheft,operationaldisruption,andfinancialloss,posingarisktothecompany′sbusiness[209].TrustAccountandInvestmentRisks−Thetrustaccountisexpectedtoearnapproximately9.20, which could adjust the exercise price of warrants[147]. - The company may issue up to 200,000,000 Class A ordinary shares, with 180,000,000 currently authorized but unissued[170]. - The issuance of additional Class A ordinary shares could significantly dilute the equity interest of existing investors[176]. - The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial business combination[170]. Operational and Management Risks - The company is dependent on a small group of key personnel, including the CEO and CFO, for its operations and future business combinations[175]. - The management team’s past performance may not be indicative of future success in identifying suitable business combinations[174]. - The company does not have employment agreements or key-man insurance for its executive officers, which could impact operations if key personnel leave[175]. - Cyber incidents could lead to information theft, operational disruption, and financial loss, posing a risk to the company's business[209]. Trust Account and Investment Risks - The trust account is expected to earn approximately 309,000 annually at an interest rate of 0.15%[203]. - The company is restricted from investing trust account proceeds in securities other than U.S. government securities or certain money market funds[203]. - The company has not made adjustments to asset or liability carrying amounts in light of potential liquidation after November 10, 2023[208]. - As of December 31, 2022, the company was not subject to any market or interest rate risk due to investments in U.S. government obligations with a maturity of 185 days or less[252]. - The company may redeem public warrants at a price of 0.01perwarrantiftheclosingpriceofClassAordinarysharesexceeds0.01 per warrant if the closing price of Class A ordinary shares exceeds 18.00 for 20 trading days within a 30-day period[164]. - Holders of warrants may receive fewer Class A ordinary shares upon exercise if the company requires a cashless exercise[165]. - The company may amend the terms of the warrants with the approval of at least 65% of the outstanding public warrants, potentially affecting holders adversely[168].