Sponsor funds Cartesian Growth III (NASDAQ: CGCT) with $150K convertible note
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Cartesian Growth Corporation III disclosed that it has created a new financing commitment with its sponsor through an unsecured promissory note. On May 18, 2026, the company issued a $150,000 note to CGC III Sponsor LLC that bears no interest and becomes due upon either completion of its initial business combination or the effective date of its winding up, whichever comes first.
If a business combination is completed, the sponsor may choose to convert some or all of the principal into working capital warrants at a rate of one warrant for each $1.00 of principal, rounded up to the nearest whole warrant. These warrants would have the same terms as the private placement warrants sold in the IPO, including transfer restrictions. The note includes customary default provisions and was issued under a private offering exemption.
Positive
- None.
Negative
- None.
8-K Event Classification
3 items: 1.01, 2.03, 9.01
3 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Promissory note principal: $150,000
Warrant conversion price: $1.00 per warrant
Warrant exercise price (existing): $11.50 per share
+2 more
5 metrics
Promissory note principal
$150,000
Unsecured note issued to CGC III Sponsor LLC on May 18, 2026
Warrant conversion price
$1.00 per warrant
Portion of principal divided by $1.00 to determine working capital warrants
Warrant exercise price (existing)
$11.50 per share
Exercise price of each whole redeemable warrant listed on Nasdaq
Note maturity trigger
Business combination or winding up
Earlier of initial business combination completion or effective winding up date
Securities Act exemption
Section 4(a)(2)
Exemption used for issuance of the promissory note
Key Terms
unsecured promissory note, initial business combination, Working Capital Warrants, private placement warrants, +2 more
6 terms
unsecured promissory note financial
"the Company issued an unsecured promissory note (the “Note”) in the principal amount of $150,000"
An unsecured promissory note is a written IOU in which a borrower promises to repay a loan plus any interest but does not pledge any asset as collateral. Investors care because it relies solely on the borrower’s ability to pay—like lending money to someone without holding their watch as security—so it usually carries higher interest and higher risk and ranks below secured debt if the borrower defaults, affecting expected recovery and company credit profile.
initial business combination financial
"the date on which the Company consummates its initial business combination"
An initial business combination is the deal in which a special-purpose acquisition company (SPAC) merges with or acquires an operating business to bring that business onto public markets. Think of the SPAC as an empty shell that raises money from investors, then uses that cash to buy a private company—this transaction turns the private company into a public one and often changes its ownership, valuation, and access to capital, so investors should watch for shifts in risk, future growth prospects, and shareholder rights.
Working Capital Warrants financial
"convert all or any portion of the principal outstanding under the Note into that number of warrants (“Working Capital Warrants”)"
private placement warrants financial
"identical to the terms of the private placement warrants issued by the Company at the time of its initial public offering"
Private placement warrants are tradable coupons given directly to a limited group of investors that let the holder buy a company's shares at a fixed price before a set expiration date. They matter to investors because they can provide extra upside if the stock rises and give companies a way to raise money outside a public offering, but they also can increase the number of shares outstanding (dilution) and therefore affect share value and investor returns.
Section 4(a)(2) of the Securities Act of 1933 regulatory
"issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended"
events of default financial
"The Note is subject to customary events of default, the occurrence of certain of which automatically triggers"
Events of default are specific breaches or failures listed in a loan, bond, or credit agreement that give lenders the right to act, such as demanding immediate repayment, raising interest rates, or taking secured assets. They matter to investors because triggering one is like setting off a financial alarm: it raises the chance of foreclosure, restructuring, or bankruptcy and can sharply reduce the value of a company’s stock or bonds and increase borrowing costs.
FAQ
What financing did Cartesian Growth Corporation III (CGCT) arrange with its sponsor?
Cartesian Growth Corporation III issued a $150,000 unsecured promissory note to CGC III Sponsor LLC. The note provides short-term working capital and is repayable upon the SPAC’s initial business combination or winding up, giving additional flexibility to fund transaction-related costs.
When is the new CGCT sponsor promissory note due?
The note becomes payable on the earlier of the initial business combination date or the date the company’s winding up is effective. This aligns repayment with key milestones in the SPAC’s lifecycle, rather than using a fixed calendar maturity date.
Can CGC III Sponsor LLC convert the CGCT note into warrants?
If Cartesian Growth Corporation III completes its initial business combination, the sponsor may convert all or part of the $150,000 principal into working capital warrants at $1.00 per warrant. This gives the sponsor potential upside instead of simple cash repayment.
What are the terms of the CGCT working capital warrants issuable on conversion?
Any working capital warrants issued on conversion would have terms identical to the private placement warrants from the IPO. This includes matching economic features and the same transfer restrictions described in the May 5, 2025 IPO prospectus.
Does the Cartesian Growth Corporation III sponsor note bear interest?
No. The promissory note is described as unsecured and non-interest bearing. The sponsor’s potential return comes from either repayment at face value or the ability to convert principal into working capital warrants if a business combination is successfully completed.
Under what legal exemption was the CGCT sponsor note issued?
The issuance of the promissory note was made under the Section 4(a)(2) exemption of the Securities Act of 1933. This provision allows certain transactions not involving a public offering to proceed without registering the securities with the SEC.