Factorial Energy (NASDAQ: FAC) closes business combination; 107M pro forma shares
Factorial Energy Inc. filed Post-Effective Amendment No. 1 to Registration Statement No. 333-294663 to reflect the Domestication from Cartesian Growth Corporation III to a Delaware corporation and the closing of the Business Combination with Factorial. The filing describes the reverse recapitalization accounting, a $1.1 billion Equity Value, the PIPE Financing (including issuance of 5,500,000 shares to the Institutional Investor for $55.0 million), pro forma combined financial statements, and updated pro forma shares outstanding of 107,023,245. The amendment discloses unaudited pro forma condensed combined balance sheets and statements of operations, transaction expenses, sponsor and PIPE allocations, changes to CUSIPs and Nasdaq tickers FAC and FACWW, and an identified material weakness in internal control over financial reporting with remediation planned through 2027.
Positive
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Key Figures
Key Terms
reverse recapitalization financial
PIPE Financing financial
unaudited pro forma condensed combined financial information financial
Domestication regulatory
shares subject to redemption financial
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As filed with the Securities and Exchange Commission on June 10, 2026
Registration No. 333-294663
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 1
to
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
(Exact name of registrant as specified in its charter)
| | | | |
Delaware | | 6770 | | 42-2967285 |
(State or other jurisdiction of |
| (Primary Standard Industrial |
| (I.R.S employer |
805 Middlesex Turnpike
Billerica, MA 01821
Telephone: (617) 315-9733
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Copies to:
Jocelyn M. Arel, Esq.
Jeffrey A. Letalien, Esq.
Goodwin Procter LLP
620 Eighth Avenue
New York, New York 10018
Tel: (212) 813-8800
Approximate date of commencement of proposed sale to the public: From time to time after the Registration Statement became effective.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
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 7(a)(2)(B) of the Securities Act.
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
| |
☐ Exchange Act Rule 13e-4(i) | ☐ Exchange Act Rule 14d-1(d) |
This post-effective amendment No. 1 to registration statement shall hereinafter become effective in accordance with Section 8(c) of the Securities Act of 1933, as amended, or on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(c), may determine.
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EXPLANATORY NOTE
This Post-Effective Amendment No. 1 (this “Amendment”) to Registration Statement No. 333-294663, declared effective as of May 6, 2026 (as amended, the “Registration Statement”), is being filed pursuant to Rule 414(d) under the Securities Act of 1933, as amended (the “Securities Act”), by Factorial Energy Inc., a Delaware corporation (“New Factorial” or the “PubCo”), as the successor to Cartesian Growth Corporation III, a Cayman Islands exempted company limited by shares (“CGC”) to, among other things, (i) set forth additional information to reflect the Domestication (as defined below) and other material changes made in connection with or resulting from the succession, the closing of the Business Combination (as defined below) and as necessary to keep the Registration Statement from being misleading in any material respect, and (ii) provide financial statements and related notes of CGC and Factorial Inc., a Delaware corporation (“Factorial”).
On June 5, 2026, as contemplated by the Business Combination Agreement (as defined below) and described in the section titled “Proposal No. 1 - The Business Combination Proposal” of the final prospectus and definitive proxy statement of CGC, dated May 6, 2026 (the “Final Prospectus”) and filed with the U.S. Securities and Exchange Commission (the “Commission”), CGC changed its jurisdiction of incorporation from the Cayman Islands to the State of Delaware, as described further below (the “Domestication”), and changed its name to “Factorial Energy Inc.” New Factorial expressly adopts the Registration Statement, as modified by this Amendment, as its own registration statement for all purposes of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For the purposes of this Amendment and the Registration Statement, references to the “Company,” the “Registrant,” “we,” “our,” “us” and similar terms mean, as of any time prior to the Domestication, CGC, and, as of any time after the Domestication, New Factorial. The information contained in this Amendment sets forth additional information to reflect the Domestication. All documents filed by the Company under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act before the effective date of the Domestication will not reflect the change in our jurisdiction of incorporation or capital structure.
The Domestication was effected in the manner described in the section of the Registration Statement titled “Proposal No. 2 - The Domestication Proposal.” In the Domestication, CGC effected a deregistration under Part XII of the Cayman Islands Companies Act (As Revised) and, pursuant to Section 388 of the Delaware General Corporation Law (the “DGCL”), domesticated as a corporation incorporated under the laws of the State of Delaware.
In connection with the Domestication, immediately prior to the Domestication, (1) CGC effected the redemption of Class A ordinary shares of CGC, par value $0.0001 per share (the “CGC Class A Shares”), initially issued in CGC’s initial public offering (the “Public Shares” and the holders of Public Shares, the “Public Shareholders”) that were validly submitted for redemption and not withdrawn; and (2) each holder of each issued and outstanding CGC Class B ordinary shares of CGC, par value $0.0001 per share (the “CGC Class B Shares” or the “Founder Shares,” and together with the CGC Class A Shares, the “CGC Ordinary Shares”) irrevocably and unconditionally elected to convert, on a one-for-one basis, each CGC Class B Share held by it into one CGC Class A Share (the “Class B Share Conversion”). At the effective time of the Domestication, each outstanding CGC Class A Share (excluding Public Shares validly submitted for redemption, but including CGC Class A Shares issued upon the Class B Share Conversion) was reclassified as one share of Series A common stock, par value $0.00001 per share, of PubCo (the “PubCo Series A Common Stock”).
Trading of PubCo Series A Common Stock and the Pubco Public Warrants (as defined in the Final Prospectus) began on the Nasdaq Capital Market (“Nasdaq”) on June 8, 2026, under the new ticker symbols “FAC” and “FACWW,” respectively. Prior to the Domestication, the CGC Class A Shares and CGC Public Warrants (as defined in the Final Prospectus) traded under the ticker symbols “CGCT” and “CGCTW”, respectively, on the Nasdaq Stock Market LLC. Upon effectiveness of the Domestication, the CUSIP numbers relating to the PubCo Series A Common Stock and PubCo Public Warrants changed to 30347G103 and 30347G111, respectively.
The rights of holders of PubCo Series A Common Stock are now governed by New Factorial’s Delaware certificate of incorporation, its Delaware bylaws and the DGCL, each of which is described in the Final Prospectus. The Final Prospectus formed part of the Registration Statement.
This Amendment sets forth additional information to reflect the Domestication and other material changes made in connection with or resulting from the succession, the closing of the business combination (the “Business Combination”) contemplated by that certain business combination agreement, dated as of December 17, 2025 (as amended by the Amendment No. 1 to Business Combination Agreement, dated as of March 26, 2026 and Amendment No. 2 to Business Combination Agreement, dated as of May 18, 2026, the “Business Combination Agreement”), by and among CGC, Fenway MS, Inc., a Delaware corporation and wholly-owned subsidiary of CGC (“Merger Sub”), and Factorial, and to keep the Registration Statement from being misleading in any material respect. All documents filed by the Company under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act before the effective date of the Domestication will not reflect the change in the Company’s name, jurisdiction of incorporation or capital
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structure. On June 10, 2026, New Factorial filed a Current Report on Form 8-K disclosing the closing of the Business Combination and certain related transactions. Set forth below is the following additional information:
| 1. | the unaudited pro forma condensed combined financial information of PubCo as of and for the three months ended March 31, 2026 and for the year ended December 31, 2025; |
| 2. | the Management’s Discussion and Analysis of Financial Condition and Results of Operations of Factorial for the three months ended March 31, 2026 and 2025; |
| 3. | the Management’s Discussion and Analysis of Financial Condition and Results of Operations of CGC for the three months ended March 31, 2026 and 2025; |
| 4. | the unaudited condensed consolidated financial statements of Factorial as of March 31, 2026 and for the three months ended March 31, 2026 and 2025; and |
| 5. | the unaudited consolidated condensed financial statements of CGC as of March 31, 2026 and for the three months ended March 31, 2026 and 2025. |
The registration fees were paid at the time of filing of the Registration Statement. Because no additional securities are being registered, no further registration fee is required.
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| | Page |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION OF PUBCO AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND FOR THE YEAR ENDED DECEMBER 31, 2025 | | 2 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF FACTORIAL FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 | | 17 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF CGC FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 | | 25 |
INDEX TO FINANCIAL STATEMENTS | | F-1 |
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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
(in thousands, except share and per share data, unless otherwise stated)
Capitalized terms used but not defined in this section shall have the meanings ascribed to them in the Current Report on Form 8-K (“Form 8-K”) filed with the Securities and Exchange Commission (the “Commission”) on June 10, 2026 and, if not defined in the Form 8-K, capitalized terms used but not defined in this section shall have the meanings ascribed to them in the definitive proxy statement/prospectus filed by Cartesian Growth Corporation III with the Commission on May 6, 2026, prior to the consummation of the business combination (the “Proxy Statement/Prospectus”).
Introduction
The following is selected unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Business Combination and related transactions.
The unaudited pro forma condensed combined balance sheet as of March 31, 2026 gives pro forma effect to the Business Combination as if it was consummated on March 31, 2026. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2026 and the year ended December 31, 2025 give pro forma effect to the Business Combination as if it was consummated on January 1, 2025, the beginning of the earliest period presented.
The unaudited pro forma condensed combined financial information was derived from and should be read in conjunction with the following:
| ● | Factorial’s unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2026, included as Exhibit 99.1 to the Form 8-K; |
| ● | Factorial’s audited consolidated financial statements for the year ended December 31, 2025, included in the Proxy Statement/Prospectus; |
| ● | CGC’s unaudited condensed financial statements as of and for the three months ended March 31, 2026, included in the Quarterly Report on Form 10-Q filed with the Commission on May 15, 2026; and |
| ● | CGC’s audited financial statements for the year ended December 31, 2025, included in the Annual Report on Form 10-K filed with the Commission on March 23, 2026 and incorporated herein by reference; and |
| ● | Factorial Common Stock is calculated based on shares outstanding as of the Merger Effective Time, and shares underlying vested and outstanding Factorial Options as of the Merger Effective Time for purposes of determining the Consideration Ratio. |
The unaudited pro forma condensed combined financial information should also be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Factorial” included in Exhibit 99.3 to the Form 8-K and incorporated by reference.
The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and does not necessarily reflect what the actual results of operations of the combined company would have been had the Business Combination occurred on March 31, 2026 or January 1, 2025, respectively. The unaudited pro forma condensed combined financial information has been prepared, in accordance with Article 11 of Regulation S-X and is for informational purposes only. It is subject to several uncertainties and assumptions as described in the accompanying notes.
Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed.
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Description of the Transaction
On December 17, 2025, CGC entered into the Business Combination Agreement with Factorial and Merger Sub, pursuant to which on June 5, 2026 (the “Merger Effective Time”) Merger Sub merged with and into Factorial, with Factorial surviving the merger as a wholly-owned subsidiary of CGC.
The board of directors of CGC has approved the Business Combination and the Domestication. In connection with, and as part of, the Domestication, CGC became a Delaware corporation and changed its corporate name to Factorial Energy, Inc. (“PubCo”) and all outstanding securities of CGC converted into securities of PubCo, as described in more detail in the Proxy Statement/Prospectus.
By virtue of the Merger and without any action on the part of any Party or any other person, the Aggregate Merger Consideration, equal to the Equity Value of $1.1 billion, consisting of a number of shares of PubCo Common Stock equal to the Equity Value divided by the Redemption Price, was issued as set forth in (i)-(iv) or reserved for issuance as set forth in (v)-(vi) below:
| i. | At the Merger Effective Time, each share of Factorial Common Stock that was issued and outstanding as of immediately prior to the Merger Effective Time (excluding treasury shares, dissenting shares and shares held by the Factorial Founders) was automatically canceled and converted into the right to receive a corresponding number of shares of PubCo Series A Common Stock equal to the Consideration Ratio and each share of Factorial’s capital stock that was issued and outstanding as of immediately prior to the Merger Effective Time held by the Factorial Founders was automatically canceled and converted into the right to receive a corresponding number of shares of PubCo Series B Common Stock equal to the Consideration Ratio; |
| ii. | The number of shares of Factorial Common Stock set forth in (i) above gave effect to: |
| a. | The conversion of each outstanding convertible debt instrument including accrued interest (including the Factorial Convertible Notes) into Factorial Common Stock pursuant to its terms; |
| b. | The conversion of each issued and outstanding share of Factorial Preferred Stock into a number of shares of Factorial Common Stock in accordance with the terms of Section 5.1 of the Factorial Certificate of Incorporation in effect immediately prior to the Merger Effective Time; and |
| c. | The conversion of each issued and outstanding Factorial Warrant into a number of shares of Factorial Common Stock in accordance with the terms of the corresponding warrant agreements; |
| iii. | each share of Factorial Common Stock held immediately prior to the Merger Effective Time by Factorial as treasury stock was automatically cancelled and extinguished, and no consideration was paid with respect thereto; |
| iv. | each share of capital stock of Merger Sub issued and outstanding immediately prior to the Merger Effective Time was automatically cancelled and extinguished and converted into one share of Factorial Common Stock; |
| v. | each outstanding and unexercised vested Factorial Option to purchase shares of Factorial Common Stock became a PubCo Option containing the same terms, conditions, vesting and other provisions as were historically applicable to such Factorial Options and each resulting PubCo Option became exercisable for the number of shares of PubCo Series A Common Stock equal to the Consideration Ratio multiplied by the number of shares of Factorial common stock subject to the Factorial Option as of immediately prior to the Merger Effective Time, rounded down to the nearest whole share, at an exercise price equal to the per share exercise price of the Factorial Option divided by the Consideration Ratio, rounded up to the nearest whole cent; and |
| vi. | each Factorial RSU that was outstanding with respect to shares of Factorial Common Stock was cancelled in exchange for a PubCo RSU under the PubCo Incentive Plan containing the same terms, conditions, vesting and other provisions as were historically applicable to such Factorial RSU, and each resulting PubCo RSU will settle into a number of shares of PubCo Series A Common Stock equal to a number of shares of PubCo Series A Common Stock as set forth on an allocation schedule, rounded down to the nearest whole share. |
In addition, PubCo consummated the PIPE Financing pursuant to the PIPE Purchase Agreements. Under the Institutional Investor Stock Purchase Agreement, the Institutional Investor committed to purchase 7,500,000 shares of PubCo Series A Common Stock for an aggregate purchase price of $75.0 million at $10.00 per share. Prior to Closing, the Institutional Investor purchased 2,000,000 Class A ordinary shares of CGC in open market or privately negotiated transactions, which reduced its remaining PIPE Financing
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purchase commitment on a share-for-share basis. Accordingly, through the PIPE Financing, PubCo issued 5,500,000 shares of PubCo Series A Common Stock to the Institutional Investor for an aggregate purchase price of $55.0 million. Under the Sponsor Investor Stock Purchase Agreement, the Sponsor Investor committed to purchase 2,400,168 shares of PubCo Series A Common Stock (based on the Merger Effective Time Redemption Price) for an aggregate purchase price of $25.0 million. Prior to Closing, the Sponsor Investor purchased 1,470,764 Class A ordinary shares of CGC in the open market, which reduced its remaining PIPE Financing purchase commitment on a share-for-share basis. Accordingly, through the PIPE Financing, PubCo issued 929,404 shares of PubCo Series A Common Stock to the Sponsor Investor at the closing Redemption Price of $10.41593671 per share, for an aggregate purchase price of approximately $9.7 million.
In connection with the Institutional Investor’s open market purchases, and pursuant to the Letter Agreement among the Institutional Investor, Factorial and the Sponsor executed on May 18, 2026, the Sponsor transferred at Closing 90,000 shares of PubCo Series A Common Stock to the Institutional Investor, representing the $900,000 Differential Amount divided by $10.00, and Factorial reimbursed the Sponsor in cash for such Differential Amount. In addition, pursuant to the Investor Stock Purchase Agreements, the Sponsor transferred, directly or indirectly through forfeiture and reissuance, an aggregate of 750,000 shares of PubCo Series A Common Stock to the Institutional Investor and 250,000 shares of PubCo Series A Common Stock to the Sponsor Investor. After giving effect to these Sponsor share transfers, the Institutional Investor received 6,340,000 shares for $55.0 million, or an effective purchase price of approximately $8.68 per share, and the Sponsor Investor effectively received 1,179,404 shares for $9.7 million, or an effective purchase price of approximately $8.21 per share. Note that based on the nature of such Sponsor to investor transfers, no expense is recorded by PubCo as a result of the transfers.
The diagram below depicts a simplified version of the combined company’s organizational structure immediately following the consummation of the Business Combination and the PIPE Financing:
Set forth below is a calculation, on a per CGC Class A Ordinary Share basis, of the approximate net cash received by PubCo from the Trust Account and PIPE Financing. Such calculations are based upon (i) cash held in the Trust Account as of March 31, 2026 assuming the Merger Effective Time redemption price of $10.41593671 (“Redemption Price”) per Public Share and (ii) $64,681 of gross cash proceeds received from the PIPE Financing, and (iii) approximate transaction expenses of $22,057 including the estimated PIPE Financing transaction expenses of $3,750, Factorial’s approximate transaction expenses of $10,259, and CGC’s approximate transaction expenses of $8,048. Pursuant to the Investor Stock Purchase Agreements, the PIPE Investors were entitled to satisfy a portion of their respective purchase obligations through the acquisition of Public Shares and the non-redemption of such shares. In connection with the Closing, the Institutional Investor acquired 2,000,000 Public Shares and the Sponsor Investor acquired 1,470,764 Public Shares, each of which reduced such investor’s obligation to purchase shares of PubCo Common Stock at Closing on a share-for-share basis. The calculations set forth below give effect to those Public Share purchases in determining the number of shares of PubCo Common Stock issued to the PIPE Investors at Closing.
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Below is a calculation, on a per CGC Class A Share basis, of the cash received by PubCo from the Trust Account and PIPE Financing, net of transaction expenses. The total number of shares outstanding in the table below gives effect to the issuance of shares of PubCo Common Stock upon consummation of the Business Combination.
| | | |
(in thousands, except share and per share amounts) | | Actual | |
CGC Class A Ordinary Shares Not Redeemed | | | 4,548,687 |
Gross Cash Proceeds of Trust Account | | $ | 47,379 |
Gross Cash Proceeds from the PIPE Financing | | $ | 64,681 |
Transaction Expenses(2) | | $ | 21,410 |
Total Shares Outstanding | | | 107,023,245 |
Net Cash per share of CGC Class A Shares | | $ | 0.85 |
| (1) | Reflects redemption of 23,051,313 of CGC Class A Shares out of the 27,600,000 of CGC Class A Ordinary Shares available for redemption by CGC Public Shareholders prior to the Closing. Note that the 4,548,687 shares presented herein include an aggregate of 3,470,764 CGC Class A Shares (the “NRA Shares”) that the Institutional Investor and the Sponsor Investor purchased prior to the Closing to partially satisfy their PIPE Financing obligations. |
| (2) | Includes cash transaction expenses relating to both the Business Combination and the PIPE Financing. This amount includes $1,346 of cash transaction expenses paid prior to the Closing and $20,064. However, this amount excludes $647 that was payable in Pubco Series A Common Stock for the merger underwriter fee as it’s a non-cash transaction expense. Refer to Note (c) of the unaudited condensed combined pro forma balance sheets as of March 31, 2026 for more information. |
Accounting for the Business Combination
The Business Combination will be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under a reverse recapitalization, CGC will be treated as the “acquired” company for financial reporting purposes. Factorial has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:
| ● | Factorial’s shareholders will have the largest voting interest in PubCo; |
| ● | As a result of such voting interest, Factorial’s shareholders will have the ability to nominate a majority of the members of the PubCo Board of Directors; |
| ● | Factorial’s senior management will be the senior management of PubCo; and |
| ● | Factorial is the larger entity, in terms of substantive operations and employee base. |
Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of Factorial issuing shares for the net assets of CGC, accompanied by a recapitalization. The net assets of CGC will be stated at fair value, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Factorial.
Basis of Pro Forma Presentation
The historical financial information has been adjusted to give pro forma effect to Factorial’s issuance of Factorial Convertible Notes in May 2026, that converted into Pubco Series A Common Stock in connection with the Business Combination. Although the Factorial Convertible Notes converted into Pubco Series A Common Stock in connection with the Business Combination, such Factorial Convertible Notes were not issued in connection with, or contingent upon, the Business Combination, as the August 2025 Factorial Convertible Notes were issued to existing investors in Factorial prior to the negotiation of the Business Combination Agreement and the January and May 2026 Factorial Convertible Notes were issued to strategic partners with whom Factorial is party to commercial arrangements and all of the shares issuable upon conversion of the Factorial Convertible Notes have been included in the Aggregate Fully Diluted Factorial Shares. For the Factorial Convertible Notes issued in May 2026, the Company estimated the pro forma effect for proceeds received under such convertible notes through the Merger Effective Time. The pro forma effect of the May 2026 Factorial Convertible Notes issuance has been assumed to have occurred as of March 31, 2026 for balance sheet purposes. The adjustments presented on the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for a more accurate understanding of the combined company upon consummation of the Business Combination.
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The pro forma adjustments included in the unaudited pro forma condensed combined balance sheet as of March 31, 2026 and in the unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2026 and for the year ended December 31, 2025 are based on preliminary estimates. The final amounts recorded may differ from the information presented.
Factorial and CGC did not have any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.
The pro forma shares of the combined common stock issued and outstanding immediately after the Business Combination are presented below:
| | |
| | Pro Forma Combined |
CGC’s Public Shareholders(1) | | 4,548,687 |
Sponsor and DirectorCo(2) | | 5,810,000 |
PIPE Institutional Investor(3) | | 6,340,000 |
PIPE Sponsor Investor(4) | | 1,179,404 |
Factorial Shareholders(5) | | 89,083,036 |
Cantor Advisory Fee(6) | | 62,118 |
Total shares outstanding | | 107,023,245 |
| (1) | Reflects redemption of 23,051,313 CGC Class A Shares out of the 27,600,000 CGC Class A Ordinary Shares available for redemption by CGC Public Shareholders prior to the Closing. Note that the 4,548,687 shares presented herein include an aggregate of 3,470,764 CGC Class A Shares (the “NRA Shares”) that the Institutional Investor and the Sponsor Investor purchased prior to the Closing to partially satisfy their PIPE Financing obligations. |
| (2) | Amount includes 5,710,000 Founder Shares held by the Sponsor and 100,000 Founder Shares held by DirectorCo (in which, each of CGC’s independent directors hold an interest in 30,000 Founder Shares). |
| (3) | Amount includes (i) the Institutional Investor’s subscription for 5,500,000 shares of PubCo Series A Common Stock at a subscription price of $10.00 per share; plus (ii) the constructive transfer at the Closing of an aggregate of 750,000 shares of PubCo Series A Common Stock from the Sponsor to the Institutional Investor; and plus (iii) an aggregate of 90,000 shares of Pubco Series A Common Stock constructively transferred to the Institutional Investor by the Sponsor as part of the Letter Agreement. The effective subscription price of the Institutional Investor is $8.68 per share, taking into account the foregoing transfers from the Sponsor. |
| (4) | Amount includes (i) the Sponsor Investor’s subscription for 929,404 shares of PubCo Series A Common Stock at a subscription price equal to the Redemption Price; plus (ii) the constructive transfer at the Closing of an aggregate of 250,000 shares of PubCo Series A Common Stock from the Sponsor to the Sponsor Investor. The effective subscription price of the Sponsor Investor is $8.21 per share, taking into account the foregoing transfer from the Sponsor. |
| (5) | Includes (i) an aggregate of 3,081,263 shares of PubCo Series A Common Stock issued to holder of Factorial Common Stock from conversion of Factorial Common Stock based upon the Consideration Ratio; (ii) an aggregate of 15,512,744 shares of PubCo Series B Common Stock issued to the Factorial Founders from the exchange of shares of Factorial Common Stock based upon the Consideration Ratio; (iii) an aggregate of 67,314,957 shares of PubCo Series A Common Stock issued to holders of Factorial Preferred Stock from the exchange of shares of Factorial Preferred Stock; (iv) an aggregate of 2,811,447 shares of PubCo Series A Common Stock issued to holders of the Factorial Convertible Notes from conversion of the Factorial Convertible Notes along with accrued interest into shares of Factorial Common Stock immediately before the Business Combination and the subsequent exchange into shares of PubCo Series A Common Stock; and (v) an aggregate of 362,625 shares of PubCo Series A Common Stock issued to holders of the Factorial Warrants from their cashless exercise of the warrants for shares of Factorial Preferred Stock and converted into shares of Factorial Common Stock immediately before the Business Combination and subsequent exchange for PubCo Series A Common Stock. |
| (6) | Amount includes 62,118 shares of PubCo Series A Common Stock issued to Cantor pursuant to the financial advisor engagement letter as outlined in the section entitled “Certain Engagements in Connection with the Business Combination” of the Proxy Statement/Prospectus. |
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Unaudited Condensed Combined Pro Forma Balance Sheets as of March 31, 2026
(in thousands, except share and per share data)
| | | | | | | | | | | | | | | | | | | | |
| | Historical | | | | | | Pro Forma Combined | | |||||||||||
| | CGCT | | Factorial | | Pro Forma | | Notes | | Transaction | | Notes | | Pro Forma Balance | | |||||
Assets | | | | | | | | | | | | | | | | | | | |
|
Current assets: | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 396 | | $ | 25,449 | | $ | 1,040 | | (a) | | $ | 287,480 | | (b) | | $ | 118,808 | |
| | | | | | | | | | | | | | (240,101) | | (f) | | | | |
| | | | | | | | | | | | | | (16,386) | | (c) | | | | |
| | | | | | | | | | | | | | 60,931 | | (d) | | | | |
Deferred offering costs | | | — | | | 3,468 | | | — | | | | | (3,468) | | (c) | | | — | |
Prepaid expenses and other current assets | | | 113 | | | 5,078 | | | — | | | | | — | | | | | 5,191 | |
Total current assets | | | 509 | | | 33,995 | | | 1,040 | | | | | 88,455 | | | | | 123,999 | |
Restricted cash | | | — | | | 884 | | | — | | | | | — | | | | | 884 | |
Property and equipment, net | | | — | | | 20,206 | | | — | | | | | — | | | | | 20,206 | |
Operating lease right-of-use assets, net | | | — | | | 7,266 | | | — | | | | | — | | | | | 7,266 | |
Other assets | | | 10 | | | 40 | | | — | | | | | — | | | | | 50 | |
CGC Investments held in Trust Account | | | 285,869 | | | — | | | — | | | | | (285,869) | | (b) | | | — | |
Total assets | | $ | 286,388 | | $ | 62,391 | | $ | 1,040 | | | | $ | (197,414) | | | | $ | 152,405 | |
Liabilities, convertible preferred stock and stockholders’ equity (deficit) | | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | |
Accounts payable | | $ | — | | $ | 656 | | $ | — | | | | $ | — | | | | $ | 656 | |
Accrued expenses | | | 1,312 | | | 4,128 | | | — | | | | | (3,352) | | (c) | | | 2,088 | |
Accrued offering costs | | | 75 | | | — | | | — | | | | | — | | | | | 75 | |
Operating lease liabilities, current portion | | | — | | | 1,401 | | | — | | | | | — | | | | | 1,401 | |
Total current liabilities | | | 1,387 | | | 6,185 | | | — | | | | | (3,352) | | | | | 4,220 | |
Operating lease liabilities, net of current portion | | | — | | | 6,817 | | | — | | | | | — | | | | | 6,817 | |
Convertible notes liability | | | — | | | 24,896 | | | 1,040 | | (a) | | | (25,936) | | (e) | | | — | |
Deferred UW fee payable | | | 13,140 | | | — | | | — | | | | | (13,140) | | (c) | | | — | |
Warrant liability | | | — | | | 3,484 | | | — | | | | | (3,484) | | (e) | | | — | |
Total liabilities | | | 14,527 | | | 41,382 | | | 1,040 | | | | | (45,912) | | | | | 11,037 | |
Redeemable convertible preferred stock | | | | | | | | | | | | | | | | | | | | |
Factorial Series A-1 redeemable convertible preferred stock | | | — | | | 327 | | | — | | | | | (327) | | (e) | | | — | |
Factorial Series A-2 redeemable convertible preferred stock | | | — | | | 655 | | | — | | | | | (655) | | (e) | | | — | |
Factorial Series B-1 redeemable convertible preferred stock | | | — | | | 2,169 | | | — | | | | | (2,169) | | (e) | | | — | |
Factorial Series C-1 redeemable convertible preferred stock | | | — | | | 28,303 | | | — | | | | | (28,303) | | (e) | | | — | |
Factorial Series C-2 redeemable convertible preferred stock | | | — | | | 26,013 | | | — | | | | | (26,013) | | (e) | | | — | |
Factorial Series D redeemable convertible preferred stock | | | — | | | 192,185 | | | — | | | | | (192,185) | | (e) | | | — | |
CGC Class A common stock subject to redemption | | | 285,869 | | | — | | | — | | | | | (285,869) | | (f) | | | — | |
Total redeemable convertible preferred stock | | | 285,869 | | | 249,652 | | | — | | | | | (535,521) | | | | | — | |
Stockholders’ equity (deficit) | | | | | | | | | | | | | | | | | | | | |
PubCo Series A common stock | | | — | | | — | | | — | | | | | 8 | | (e) | | | 9 | |
| | | | | | | | | | | | | | 1 | | (f) | | | | |
Pubco Series B common stock | | | — | | | — | | | — | | | | | 2 | | (e) | | | 2 | |
CGC Class B Common Stock | | | 1 | | | — | | | — | | | | | (1) | | (f) | | | — | |
Additional paid-in capital | | | — | | | 36,285 | | | — | | | | | (3,362) | | (c) | | | 409,374 | |
| | | | | | | | | | | | | | 268,142 | | (e) | | | | |
| | | | | | | | | | | | | | 47,379 | | (f) | | | | |
| | | | | | | | | | | | | | 60,931 | | (d) | | | | |
Accumulated deficit | | | (14,009) | | | (264,151) | | | — | | | | | 10,886 | | (e) | | | (267,274) | |
Accumulated other comprehensive income | | | — | | | (743) | | | — | | | | | — | | | | | (743) | |
Factorial Treasury stock | | | — | | | (34) | | | — | | | | | 34 | | (e) | | | — | |
Total stockholders’ equity (deficit) | | | (14,008) | | | (228,643) | | | — | | | | | 384,020 | | | | | 141,368 | |
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) | | $ | 286,388 | | $ | 62,391 | | $ | 1,040 | | | | $ | (197,414) | | | | $ | 152,405 | |
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The pro forma adjustments to the unaudited condensed combined pro forma balance sheet as of March 31, 2026 consist of the following:
| (a) | Reflects Factorial’s issuance of additional Convertible Notes in May 2026 for an aggregate $1,040 face value, which were converted, along with accrued interest, into Factorial Common Stock immediately before the consummation of the Business Combination necessitating inclusion in these pro forma adjustments. Note that Factorial has elected the Fair Value Option for the Convertible Notes in accordance with ASC 825, Financial Instruments; however, these pro forma adjustments for the May 2026 transaction herein are not giving effect to any change in fair value of the notes on the date of issuance stemming from such election. Assumptions regarding changes in fair value, including accrued interest, of the Factorial Convertible Notes, are recorded as transaction accounting adjustments in (e). |
| (b) | Represents the interest earned, based on the Redemption Price of $10.41593671 per CGC Class A Ordinary Share, on investments held in the Trust Account held by CGC of $1,611, and the transfer of both CGC’s investments held in the Trust Account, and the interest earned to cash and cash equivalents prior to the consideration of Redemptions as outlined in (f). Refer to the below table for the pro forma entries. The interest earned is recorded as income for CGC through accumulated deficit and then reclassified into additional paid-in capital because of the Business Combination as described in (f)(i). Refer to the below table for the pro forma entries: |
| | | | | | |
| | Cash and cash | | CGC Investments | | Accumulated |
Transfer of CGC’s investments held in trust account | | 287,480 | | (287,480) | | |
Interest Earned on Investments Held in Trust Account | | | | 1,611 | | (1,611) |
Total | | 287,480 | | (285,869) | | (1,611) |
(c) | Reflects the following pro forma adjustments for transaction costs associated with the Business Combination (refer to below table for pro forma entries): |
CGC’s transaction expenses of approximately $8,048 related to the Business Combination, of which $11 had been paid as of March 31, 2026 and $8,037 was paid in cash at Closing. The transaction expenses of $8,048 includes a $4,311 underwriting fee, and other transaction costs of $3,737, including $1,147 incurred and expensed through March 31, 2026 (of which $11 had been paid as of March 31, 2026), and $2,590 incurred after March 31, 2026 through the Closing of the Business Combination. The expenses incurred after March 31, 2026, are recorded as expense for CGC through accumulated deficit and then reclassified into additional paid-in capital in consummation of the Business Combination.
The Business Combination will be accounted for as a reverse recapitalization in accordance with U.S. GAAP ASC 805. Under this method of accounting, Factorial is the accounting acquirer, and as a result, qualifying transaction costs incurred by Factorial are treated as deferred offering costs and any balance below the net proceeds from this reverse recapitalization will be charged directly to equity. This recording complies with the requirements of FASB ASC Topic 340-10-S99-1, “Other Assets and Deferred Costs — SEC Materials” (“ASC 340-10-S99”) and Commission Staff Accounting Bulletin Topic 5A, “Expenses of Offering”. Deferred offering costs consist of legal and other professional expenses incurred through the balance sheet date that are directly related to the Business Combination and are reflected in shareholders’ equity (deficit) in these pro formas of the Business Combination with any balance below the net proceeds from this Business Combination.
Factorial’s transaction expenses are approximately $10,259 for transaction expenses related to the Business Combination. The transaction expenses of $10,259 include a $5,000 merger underwriting fee paid in both cash and PubCo Series A Common Stock, $3,468 of other related transaction expenses incurred through March 31, 2026 (of which $1,263 had been paid as of March 31, 2026), and $1,791 of other related transaction expenses incurred after March 31, 2026 through the close of the Business Combination. These costs are reflected in additional paid-in capital in these pro formas.
The $5,000 merger underwriter fee was payable in $2,500 in cash and the remaining $2,500 in a combination of cash and publicly traded common equity securities of the post-combination company. The cash portion of this remaining amount equaled (a) a fraction, the numerator of which is the amount by which the total proceeds received by the combined company in connection with any equity financing consummated in connection with the Business Combination and the cash delivered from CGC’s trust account at the Closing exceed $75,000, and the denominator of which is $50,000, multiplied by (b) $2,500, with the remainder payable in shares of common equity of the post-combination company. Based on actual redemptions, $1,853 was payable in cash,
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and the remaining $647 was payable in Pubco Series A Common Stock. The adjustment of the $1,853 payment in PubCo Series A Common Stock is reflected in additional paid-in capital in these pro formas.
| | | | | | | | | | |
| | Deferred | | Accrued | | Deferred | | Cash and | | Additional |
CGC cash payments of transaction expenses and adjustments | | (13,140) | | (1,147) | | | | (8,037) | | 6,250 |
Factorial cash payments of transaction expenses | | | | (2,205) | | (3,468) | | (8,349) | | (9,612) |
Total | | (13,140) | | (3,352) | | (3,468) | | (16,386) | | (3,362) |
(d) | At the Merger Effective Time, the Institutional Investor purchased from PubCo an aggregate of 6,340,000 shares of PubCo Series A Common Stock for an aggregate purchase price of $55,000, pursuant to a stock purchase agreement and the Sponsor Investor purchased from PubCo an aggregate of 1,179,404 shares of PubCo Series A Common Stock, for an aggregate purchase price of $9,681 pursuant to a stock purchase agreement. The Institutional Investor and the Sponsor Investor satisfied in part their purchase obligations under the stock purchase agreements through purchases of 3,470,764 NRA Shares in the aggregate at market prices. Such shares were subject to Non-Redemption Agreements and the proceeds from CGC’s trust account released at Closing reflect non-redemption of such shares. CGC incurred PIPE Financing transactions costs of $3,750, leading to net PIPE Financing proceeds of $60,931. |
(e) | Reflects the following pro forma adjustments for conversion of historical Factorial instruments associated with the Business Combination and the elimination of CGC accumulated deficit: |
| i. | The assumption includes the conversion of the $15,340 face value of the Factorial Convertible Notes which converted, at fair value, in accordance with the respective agreements resulting in 766,397 shares of Factorial Common Stock. The resulting 766,397 shares of Factorial Common Stock were then exchanged into 2,811,447 shares of PubCo Series A Common Stock with a $0.0001 par value per share in accordance with the Business Combination. The Company elected the Fair Value Option for the Factorial Convertible Notes in accordance with ASC 825, Financial Instruments. The Factorial Convertible Notes issued from issuance respectively through the three months ended March 31, 2026, included an aggregate fair value adjustment of $10,596 as of March 31, 2026. The pro forma adjustments also give effect to the change in conversion value of the Factorial Convertible Notes issued in May 2026 as a result of the Business Combination representing its carrying value of May 2026 Notes plus assumed interest through June 5, 2026 for pro forma purposes. As such, the estimated carrying value of the Factorial Convertible Notes required an incremental adjustment to accumulated deficit of $3,123, which consists of incremental value inclusive of the conversion value of interest to adjust the Factorial Convertible Notes to $29,059 as of the Merger Effective Time. |
| ii. | The conversion of 18,349,937 shares of Factorial Preferred Stock into Factorial Common Stock on a one-to-one basis and then exchanged into 67,314,957 shares of PubCo Series A Common Stock with a $0.0001 par value per share. |
| iii. | The cashless exercise of 295,558 Factorial Warrants into 362,625 shares of Factorial Common Stock immediately before the consummation of the Business Combination and then exchanged into 372,907 PubCo Series A Common Stock. |
| iv. | The exchange of 839,951 shares of Factorial Common Stock into 3,081,263 shares of PubCo Series A Common Stock with a $0.0001 par value per share. |
| v. | The exchange of 4,228,739 shares of Factorial Common Stock into 15,512,744 shares of PubCo Series B Common Stock with a $0.0001 par value per share. This adjustment has no impact on additional paid-in capital. |
| vi. | The removal of Factorial Treasury Stock into additional paid-in capital immediately prior to the Merger Effective Time by the Company as treasury stock was be automatically cancelled and extinguished, and no consideration was paid with respect thereto. |
| vii. | The elimination of historical CGC accumulated deficit of $14,009, through additional paid-in capital, net of the accumulated deficit impact of the assumed $3,123 change in fair value on the Factorial Convertible Notes discussed in footnote (e)(i). The income impact of the CGC pro forma interest earned on investments held in Trust of $1,611 discussed in footnotes (b) and (f)(i) and the accumulated deficit impact of the CGC transaction costs estimated to be |
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| incurred after May 31, 2026 of $2,590 discussed in footnote (c) are reclassified into additional paid-in capital due to the effects of the Business Combination as they represent income and expenses of CGC that are eliminated. |
| (f) | Reflects the following pro forma adjustments for redemptions associated with the Business Combination (refer to below table for pro forma entries): |
| i. | 4,548,687 CGC Class A Ordinary shares previously subject to redemption for cash but not redeemed (accreted to the Redemption Price through an adjustment to accumulated deficit of $1,611 through the adjustment discussed in footnote (b)) and transferred to shareholders’ equity at $0.00001 par value. |
| ii. | The conversion of 6,900,000 CGC Class B Shares into 6,900,000 shares of PubCo Series A Common Stock, with a par value $0.00001 per share. Additionally, both the CGC Private Warrants and CGC Public Warrants survive the Business Combination and convert into PubCo Warrants and therefore result in no pro forma financial statement impact. |
| | | | | | | | | | | | | |
| | CGC | | CGC | | Accumulated | | PubCo | | Additional | | Cash |
|
Redemptions | | (285,869) | | — | | (1,611) | | — | | 47,379 | | (240,101) | |
CGC Class B Conversion | | | | (1) | | | | 1 | | | | | |
Total | | (285,869) | | (1) | | (1,611) | | 14 | | 47,379 | | (240,101) | |
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Unaudited Condensed Combined Pro Forma Statement of Operations
For the Three Months Ended March 31, 2026
(in thousands, except share and per share data)
| | | | | | | | | | | | | | | | |
| | Historical | | | | Pro Forma Combined | | | ||||||||
| | CGCT | | Factorial | | Transaction Accounting | | Notes | | Pro Forma Statement of | | | ||||
Operating expenses: | | | | | | | | | | | | | | | | |
Research and development, net | | $ | — | | $ | 1,942 | | $ | — | | | | $ | 1,942 | | |
Selling, general and administrative | | | 811 | | | 4,549 | | | 2,590 | | (a) | | | 7,950 | | |
Total operating expense | | | 811 | | | 6,491 | | | 2,590 | | | | | 9,892 | | |
Loss from operations | | | (811) | | | (6,491) | | | (2,590) | | | | | (9,892) | | |
Financing costs related to issuance of convertible promissory note | | | — | | | (37) | | | 37 | | (b) | | | — | | |
Change in fair value of warrant liability | | | — | | | (106) | | | 106 | | (b) | | | — | | |
Change in fair value of convertible promissory notes | | | — | | | (1,707) | | | 1,707 | | (b) | | | — | | |
Other income (expense), net | | | 2,492 | | | (234) | | | (2,492) | | (c) | | | (234) | | |
Income (loss) before provision for income taxes | | | 1,680 | | | (8,575) | | | (3,232) | | | | | (10,126) | | |
Income tax expense | | | — | | | — | | | — | | | | | — | | |
Net income/(loss) | | $ | 1,680 | | $ | (8,575) | | $ | (3,232) | | | | $ | (10,126) | | |
Basic and diluted weighted average shares outstanding, Class A Common Stock Subject to Redemption | | | 27,600,000 | | | — | | | | | | | | | | |
Basic and diluted net income per share, Class A Common Stock Subject to Redemption | | $ | 0.06 | | $ | — | | | | | | | | | | |
Basic and diluted weighted average common stock outstanding, CGC Class B Common Stock, non-redeemable | | | 6,900,000 | | | — | | | | | | | | | | |
Basic net loss per share, CGC Class B Common Stock, non-redeemable | | $ | 0.24 | | $ | — | | | | | | | | | | |
Basic and diluted weighted average common stock outstanding | | | | | | 5,056,994 | | | | | | | | | | |
Basic and diluted net loss per share, common stock | | | | | $ | (1.70) | | | | | | | | | | |
Basic and diluted pro forma weighted average shares outstanding | | | | | | | | | | | | | | 107,023,245 | | (d) |
Basic and diluted pro forma net loss per share | | | | | | | | | | | | | $ | (0.09) | | |
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The pro forma adjustments to the unaudited condensed combined pro forma statement of operations for the three months ended March 31, 2026 consist of the following:
| (a) | Reflects CGC’s transaction expenses of approximately $2,590 ($3,737 total less $1,147 expensed by CGC through March 31, 2026) related to the Business Combination, excluding the $4,311 underwriter fee. Note that this adjustment does not reflect $10,259 of transaction expenses incurred by Factorial. The $10,259 of Factorial transaction expenses are presented net within stockholders’ equity (deficit) on the unaudited combined pro forma balance sheet as of March 31, 2026 pursuant to applicable accounting principles related to reverse recapitalizations. |
| (b) | Represents an adjustment to eliminate the financing costs related to Factorial’s issuance of Factorial Convertible Notes during the three months ended March 31, 2026, the change in fair value of the Factorial Convertible Notes issued during the three months ended March 31, 2026, and change in the fair value of the Factorial Warrants during the three months ended March 31, 2026, as this pro forma financial information assumes the Business Combination occurred on January 1, 2025 and therefore, includes the exchange of the Factorial Convertible Notes and Factorial Warrants into shares of PubCo Series A Common Stock as of the earliest period presented (i.e., January 1, 2025). |
| (c) | Represents an adjustment to eliminate interest earned on marketable securities held in the Trust Account associated with the proceeds from CGC’s IPO held in Trust for the three months ended March 31, 2026. |
| (d) | The calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the Business Combination occurred as of the earliest period presented (January 1, 2025). In addition, as the Business Combination is being reflected as if it had occurred on this date, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares have been outstanding for the entire period presented. This calculation is retroactively adjusted to eliminate the number of shares redeemed in the Business Combination for the entire period. |
Net Loss per Share
Net loss per share was calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2025.
The following unaudited pro forma condensed combined financial information has been prepared to present the actual impact of redemptions of ordinary shares by Public Shareholders at the time of the Business Combination for the three months ended March 31, 2026. Calculation of pro forma net loss per share excludes the following securities: (a) 20,600,000 shares of PubCo Series A Common Stock issuable upon the exercise of 13,800,000 CGC Public Warrants and 6,800,000 CGC Private Warrants; (b) 24,755,591 shares of PubCo Series A Common Stock that will be issuable upon the exercise or settlement of 19,639,374 Factorial Options, with a weighted average exercise price of $1.09 and of which 16,524,075 shares are exercisable based on shares outstanding as of the Merger Effective Time, and 5,116,217 Factorial RSUs, of which none are vested as of the Merger Effective Time; and (c) any shares of PubCo Series A Common Stock that will initially be available for issuance under the PubCo Incentive Plan and ESPP.
Further, under the Business Combination Agreement, the converted Factorial Options and Factorial RSUs retained substantially the same terms, including vesting conditions and other substantive provisions, as were applicable immediately prior to the Business Combination, with only equitable adjustments to the number of underlying shares and, for options, the exercise price to reflect the consideration ratio. As a result, the Business Combination did not in itself cause these awards to vest nor is it expected to result in incremental stock-based compensation expense solely from the conversion of such awards. Therefore, the impact of Factorial Options
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and Factorial RSUs has been excluded from these unaudited condensed pro forma financial statements as such awards remained as outstanding equity awards and not PubCo Series A Common Stock immediately following the Business Combination.
| | | | |
| | Pro Forma Combined |
| |
For the three months ended March 31, 2026 | | | | |
Pro forma net loss | | $ | (10,126) | |
Pro forma basic and diluted net loss per share | | $ | (0.09) | |
Number of shares of PubCo Common Stock | | | | |
CGC’s Public Shareholders | | | 4,548,687 | |
Sponsor and DirectorCo | | | 5,810,000 | |
PIPE Institutional Investor | | | 6,340,000 | |
PIPE Sponsor Investor | | | 1,179,404 | |
Factorial Shareholders | | | 89,083,036 | |
Cantor Advisory Fee | | | 62,118 | |
Total shares outstanding | | | 107,023,245 | |
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Unaudited Condensed Combined Pro Forma Statement of Operations
For the Year Ended December 31, 2025
(in thousands, except share and per share data)
| | | | | | | | | | | | | | | |
| | Historical | | Pro Forma Combined | | ||||||||||
| | CGCT | | Factorial | | Transaction Accounting | | Notes | | Pro Forma Statement of | | ||||
Operating expenses: | | | | | | | | | | | | | | |
|
Research and development, net | | $ | — | | $ | 24,323 | | $ | — | | | | $ | 24,323 | |
Selling, general and administrative | | | 1,158 | | | 22,202 | | | 3,061 | | (a) | | | 26,421 | |
Loss and impairment on lease termination | | | — | | | 17,063 | | | — | | | | | 17,063 | |
Total operating expense | | | 1,158 | | | 63,588 | | | 3,061 | | | | | 67,807 | |
Loss from operations | | | (1,158) | | | (63,588) | | | (3,061) | | | | | (67,807) | |
Financing costs related to issuance of convertible promissory note | | | — | | | (4,608) | | | 4,608 | | (b) | | | — | |
Change in fair value of warrant liability | | | — | | | (2,230) | | | 2,230 | | (b) | | | — | |
Change in fair value of convertible promissory notes | | | — | | | (4,389) | | | 4,389 | | (b) | | | — | |
Other income (expense), net | | | 7,377 | | | 970 | | | (7,377) | | (c) | | | 970 | |
Income (loss) before provision for income taxes | | | 6,219 | | | (73,845) | | | 789 | | | | | (66,837) | |
Income tax expense | | | — | | | — | | | — | | | | | — | |
Net income/(loss) | | $ | 6,219 | | $ | (73,845) | | $ | 789 | | | | $ | (66,837) | |
Basic and diluted weighted average shares outstanding, Class A Common Stock Subject to Redemption | | | 18,197,802 | | | — | | | | | | | | | |
Basic and diluted net income per share, Class A Common Stock Subject to Redemption | | $ | 0.25 | | $ | — | | | | | | | | | |
Basic weighted average common stock outstanding, CGC Class B Common Stock, non-redeemable | | | 6,593,407 | | | — | | | | | | | | | |
Basic net loss per share, CGC Class B Common Stock, non-redeemable | | $ | 0.25 | | $ | — | | | | | | | | | |
Diluted weighted average common stock outstanding, CGC Class B Common Stock, non-redeemable | | | 6,900,000 | | | — | | | | | | | | | |
Diluted net loss per share, CGC Class B Common Stock, non-redeemable | | $ | 0.25 | | $ | — | | | | | | | | | |
Basic and diluted weighted average common stock outstanding | | | | | | 5,026,704 | | | | | | | | | |
Basic and diluted net loss per share, common stock | | | | | $ | (14.69) | | | | | | | | | |
Basic and diluted pro forma weighted average shares outstanding | | | | | | | | | | | | | | 107,023,245 | (d) |
Basic and diluted pro forma net loss per share | | | | | | | | | | | | | $ | (0.62) | |
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The pro forma adjustments to the unaudited condensed combined pro forma statement of operations for the year ended December 31, 2025 consist of the following:
| (a) | Reflects CGC’s transaction expenses of approximately $3,061 ($3,737 total less $676 expensed by CGC through December 31, 2025) related to the Business Combination, excluding the $4,311 underwriter fee. Note that this adjustment does not reflect $10,259 of transaction expenses incurred by Factorial. The $10,259 of Factorial transaction expenses are presented net within stockholders’ equity (deficit) on the unaudited combined pro forma balance sheet as of March 31, 2026 pursuant to applicable accounting principles related to reverse recapitalizations. |
| (b) | Represents an adjustment to eliminate the financing costs related to Factorial’s issuance of Factorial Convertible Notes during the year ended December 31, 2025, the change in fair value of the Factorial Convertible Notes issued during the year ended December 31, 2025, and change in the fair value of the Factorial Warrants during the year ended December 31, 2025, as this pro forma financial information assumes the Business Combination occurred on January 1, 2025 and therefore, includes the exchange of the Factorial Convertible Notes and Factorial Warrants into shares of PubCo Series A Common Stock as of the earliest period presented (i.e., January 1, 2025). |
| (c) | Represents an adjustment to eliminate interest earned on marketable securities held in the Trust Account associated with the proceeds from CGC’s IPO held in Trust for the year ended December 31, 2025. |
| (d) | The calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the Business Combination occurred as of the earliest period presented (January 1, 2025). In addition, as the Business Combination is being reflected as if it had occurred on this date, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares have been outstanding for the entire period presented. This calculation is retroactively adjusted to eliminate the number of shares redeemed in the Business Combination for the entire period. |
Net Loss per Share
Net loss per share was calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2025.
The following unaudited pro forma condensed combined financial information has been prepared to present the actual impact of redemptions of ordinary shares by Public Shareholders at the time of the Business Combination for the year ended December 31, 2025. Calculation of pro forma net loss per share excludes the following securities: (a) 20,600,000 shares of PubCo Series A Common Stock issuable upon the exercise of 13,800,000 CGC Public Warrants and 6,800,000 CGC Private Warrants; (b) 24,755,591 shares of PubCo Series A Common Stock that will be issuable upon the exercise or settlement of 19,639,374 Factorial Options, with a weighted average exercise price of $1.09 and of which 16,524,075 shares are exercisable based on shares outstanding as of the Merger Effective Time, and 5,116,217 Factorial RSUs, of which none are vested as of the Merger Effective Time; and (c) any shares of PubCo Series A Common Stock that will initially be available for issuance under the PubCo Incentive Plan and ESPP.
Further, under the Business Combination Agreement, the converted Factorial Options and Factorial RSUs retained substantially the same terms, including vesting conditions and other substantive provisions, as were applicable immediately prior to the Business Combination, with only equitable adjustments to the number of underlying shares and, for options, the exercise price to reflect the consideration ratio. As a result, the Business Combination did not in itself cause these awards to vest nor is it expected to result in incremental stock-based compensation expense solely from the conversion of such awards. Therefore, the impact of Factorial Options
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and Factorial RSUs has been excluded from these unaudited condensed pro forma financial statements as such awards remained as outstanding equity awards and not PubCo Series A Common Stock immediately following the Business Combination.
| | | |
| | Pro Forma Combined | |
For the three months ended March 31, 2026 | | | |
Pro forma net loss | | $ | (66,837) |
Pro forma basic and diluted net loss per share | | $ | (0.62) |
Number of shares of PubCo Common Stock | | | |
CGC’s Public Shareholders | | | 4,548,687 |
Sponsor and DirectorCo | | | 5,810,000 |
PIPE Institutional Investor | | | 6,340,000 |
PIPE Sponsor Investor | | | 1,179,404 |
Factorial Shareholders | | | 89,083,036 |
Cantor Advisory Fee | | | 62,118 |
Total shares outstanding | | | 107,023,245 |
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF FACTORIAL
The following discussion and analysis of financial condition and results of operations of Factorial Inc. (for purposes of this section, “Factorial,” “Company,” “we,” “our” or “us”) should be read together with Factorial’s audited financial statements for the years ended December 31, 2025 and 2024 included in the Proxy Statement/Prospectus beginning on Page F-25, Factorial’s unaudited condensed financial statements for the three months ended March 31, 2026 and 2025, and related notes included in this Amendment, as well as the unaudited pro forma condensed combined financial information included in this Amendment. This discussion contains forward-looking statements reflecting our current expectations, estimates, and assumptions concerning events and financial trends that may affect our future operating results or financial position. Our actual results and the timing of events could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included in the Proxy Statement/Prospectus.
Overview
Factorial, a US-based leader in solid-state battery technology, develops next generation battery technology for planned use by drone, mobile robots, roadgoing vehicles, energy storage, and other demanding applications. Our FEST® cells are designed to meet the demands of the high-power market and, relative to conventional Li-ion batteries, deliver lighter weight, smaller size, longer life, and faster charging, in each case meeting or exceeding conventional batteries in each of these key parameters we believe are valued by end users.
Factorial is a development stage company with no revenue to date that has incurred a net loss of approximately $8.6 million, with cash used in operations of $6.1 million, for the three months ended March 31, 2026 and an accumulated deficit of approximately $264.2 million as of March 31, 2026.
The Business Combination
Factorial entered into the Business Combination Agreement with CGC on December 17, 2025. Pursuant to the Business Combination Agreement, and after CGC’s shareholders voted to approve it, Merger Sub, a newly formed subsidiary of CGC, merged with and into Factorial. Upon the Closing, the separate corporate existence of Merger Sub ceased to exist, and Factorial survived and became a wholly-owned subsidiary of CGC. In connection with the consummation of the Business Combination, CGC changed its corporate name to Factorial Energy Inc. The Business Combination was accounted for as a reverse recapitalization. Factorial was deemed the accounting acquirer and the combined entity is the successor SEC registrant, meaning that Factorial’s financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC. Under this method of accounting, CGC was treated as the acquired company for financial statement reporting purposes. As a result of the closing of the Business Combination, the most significant change in Factorial’s financial position and results is a $92.0 million net increase in cash and cash equivalents (as compared to Factorial’s consolidated balance sheet at March 31, 2026), which includes $112.1 million in gross proceeds from the PIPE Financing (inclusive of the proceeds from the trust account resulting from NRA Shares acquired by PIPE Investors to satisfy their obligations under the applicable Investor Stock Purchase Agreement) that was received at the Closing offset by the transaction expenses, which occurred on June 5, 2026. Transaction expenses paid at closing for the Business Combination and PIPE Financing were approximately $21.1 million. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
As a result of the Business Combination, Factorial became the successor to an SEC-registered and Nasdaq-listed company, which will require Factorial to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. Factorial expects to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees, and additional internal and external accounting, legal, and administrative resources, including increased personnel costs, audit and other professional service fees.
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Key Trends, Opportunities and Uncertainties
Factorial is a pre-revenue company. We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those in the sections of the Proxy Statement/Prospectus titled “Business — Our Competitive Strengths”, “Business — Our Growth Strategy”, “Business — Manufacturing and Supply”, “Business — Research and Development”, “Business — Competitive Landscape”, Business — Government Regulation and Compliance” and “Risk Factors.”
We identified a material weakness in our internal control over financial reporting relating to inadequate resources to ensure proper system access and segregation of duties, timely and accurate preparation of reconciliations of accounts, and timely and accurate assessment, review and documentation of various transactions to ensure accurate recording of accounts in our financial statements in a timely manner. This material weakness led to a conclusion that our internal control over financial reporting and disclosure controls and procedures were not effective as of March 31, 2026.
Since December 2025, Factorial has added additional headcount to its finance team, including a chief financial officer, an accounting manager, and a staff accountant. The Company plans to increase staffing of its technical accounting and internal audit function during 2026 and will engage outside consultants to advise on improvements surrounding its controls over financial reporting. As of the date of this filing, management has taken remediation actions during 2026 and expects to complete the remediation actions related to Factorial’s material weakness over financial reporting during 2027 and expects to incur approximately $0.8 million in associated costs.
Basis of Presentation
Factorial currently conducts its business through one operating segment. As a pre-revenue company with no commercial operations, Factorial’s activities to date have been limited and were conducted primarily in the United States and Korea and its historical results are reported under U.S. GAAP and in U.S. dollars. Factorial’s Korean subsidiary’s functional currency is the Korean Won. Upon commencement of commercial operations, Factorial expects to expand its global operations substantially, including in the United States, Asia, and the European Union, and as a result Factorial expects its future results to be sensitive to foreign currency transaction and translation risks and other financial risks that are not reflected in its historical financial statements. As a result, Factorial expects that the financial results it reports for periods after it begins commercial operations will not be comparable to the financial results included in the Proxy Statement/Prospectus.
Components of Results of Operations
Factorial is a research and development stage company, and its historical results may not be indicative of its future results for reasons that may be difficult to anticipate. Accordingly, the drivers of Factorial’s future financial results, as well as the components of such results, may not be comparable to Factorial’s historical or projected results of operations.
Research and Development Expense
To date, Factorial’s research and development expenses have consisted primarily of personnel-related expenses for scientists, experienced engineers and technicians as well as costs associated with the expansion and ramp up of our engineering facility in the United States and Cheonan, South Korea, including the material and supplies to support the product development and process engineering efforts. As Factorial ramps up its engineering operations to complete the development of its solid-state, lithium-metal batteries and required process engineering to meet automotive cost targets, Factorial anticipates that research and development expenses will increase significantly for the foreseeable future as Factorial expands its hiring of scientists, engineers, and technicians and continues to invest in additional plant and equipment for product development (e.g. multi-layer cell stacking, packaging and engineering), building prototypes, and testing of battery cells as the team works to meet the full set of Original Equipment Manufacturers (“OEMs”) product requirements.
General and Administrative Expense
General and administrative expenses consist mainly of personnel-related expenses for Factorial’s executive, sales and marketing and other administrative functions and expenses for outside professional services, including legal, accounting and other advisory services. Factorial is expanding its headcount in anticipation of planning for and ramping up commercial manufacturing operations and to meet public company financial and compliance requirements. Accordingly, in addition to the non-recurring transaction costs
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discussed above, Factorial expects its general and administrative expenses to increase significantly in the near term and for the foreseeable future. Upon commencement of commercial operations, Factorial also expects general and administrative expenses to include sales, marketing and advertising costs.
Financing Costs Related to Issuance of Convertible Promissory Notes – Related Parties
Financing costs related to issuance of convertible promissory notes to related parties represents the excess of the fair value of the convertible promissory notes over the proceeds received, if any, as well as direct financing costs paid in cash at issuance.
Financing Costs Related to Issuance of Convertible Promissory Notes
Financing costs related to issuance of convertible promissory notes represents the excess of the fair value of the convertible promissory notes over the proceeds received, if any, as well as direct financing costs paid in cash at issuance.
Change in Fair Value of Convertible Promissory Notes – Related Parties
Change in fair value of convertible promissory notes to related parties represents the fair value adjustment to mark the convertible promissory note liability to fair value.
Change in Fair Value of Convertible Promissory Notes
Change in fair value of convertible promissory notes represents the fair value adjustment to mark the convertible promissory note liability to fair value.
Change in Fair Value of Warrant Liabilities
Change in fair value of warrant liabilities represents the fair value adjustment to mark the warrant liabilities to fair value based on changes in the underlying equity valuation.
Other (Expenses) Income, Net
Factorial’s other income (expense) consists of interest income from interest-bearing accounts, interest expense, and the effects of foreign currency.
Provision for Income Taxes
Factorial’s income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. Factorial maintains a valuation allowance against the full value of its U.S. and state net deferred tax assets because Factorial believes the recoverability of the tax assets is not more likely than not.
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Results of Operations
Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025
The following table sets forth Factorial’s historical operating results for the periods indicated:
| | | | | | | | | | | | |
| | Three Months Ended March 31, | | | | |
| |||||
| | 2026 | | 2025 | | $ | | % | | |||
| | (in thousands, except Share and per Share Amounts) | | | | | | |||||
Operating expenses: | | | | | | | | | | | | |
Research and development | | $ | (1,942) | | $ | (6,754) | | $ | (4,812) | | (71.2) | % |
General and administrative | | | (4,549) | | | (6,368) | | | (1,819) | | (28.6) | % |
Total operating expenses | | | (6,491) | | | (13,122) | | | (6,631) | | (50.5) | % |
Loss from operations | | | (6,491) | | | (13,122) | | | (6,631) | | (50.5) | % |
Other income (expense): | | | | | | | | | | | | |
Financing costs related to issuance of convertible promissory notes | | | (37) | | | — | | | 37 | | N/M | (1) |
Change in fair value of convertible promissory notes – related parties | | | (1,407) | | | — | | | 1,407 | | N/M | |
Change in fair value of convertible promissory notes | | | (300) | | | — | | | 300 | | N/M | |
Change in fair value of warrant liabilities | | | (106) | | | — | | | 106 | | N/M | |
Other income (expense), net | | | (234) | | | 252 | | | (486) | | N/M | |
Total other income (expense), net | | | (2,084) | | | 252 | | | (2,336) | | N/M | |
Net loss | | | (8,575) | | | (12,870) | | | (4,295) | | (33.4) | % |
Net loss attributable to common stockholders | | $ | (8,575) | | $ | (12,870) | | $ | (4,295) | | (33.4) | % |
Net loss | | $ | (8,575) | | $ | (12,870) | | $ | (4,295) | | (33.4) | % |
Other comprehensive income (loss): | | | | | | | | | | | | |
Foreign currency translation adjustments and other | | | (298) | | | 8 | | | 306 | | N/M | |
Total comprehensive loss | | | (8,873) | | | (12,862) | | | (3,989) | | (31.0) | % |
Comprehensive loss attributable to common stockholders | | $ | (8,873) | | $ | (12,862) | | $ | (3,989) | | (31.0) | % |
Basic and Diluted net loss per share | | $ | (1.70) | | $ | (2.57) | | $ | (0.87) | | (33.9) | % |
Basic and Diluted weighted-average common shares outstanding | | | 5,056,994 | | | 5,016,149 | | | 40,845 | | 0.1 | % |
| (1) | Not Meaningful (“N/M”) |
Research and Development
Research and development expenses decreased by $4.8 million, or 71.2%, from $6.7 million for the three months ended March 31, 2025 to $1.9 million for the three months ended March 31, 2026. The decline primarily resulted from receipts of $3.4 million from joint development partners for the three months ended March 31, 2026, compared to $0.03 million for the three months ended March 31, 2025, which are recorded net in research and development expenses. The decrease was further attributable to the absence of occupancy and depreciation costs that had previously been allocated to research and development, following the exit of the Methuen, Massachusetts facility in October 2025.
General and Administrative
General and administrative expenses decreased by $1.8 million, or 28.6%, from $6.3 million for the three months ended March 31, 2025 to $4.5 million for the three months ended March 31, 2026, primarily due to a decline in stock-based compensation
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expense. General and administrative stock-based compensation expense decreased by $2.2 million, or 63%, from $3.5 million for the three months ended March 31, 2025, to $1.3 million for the three months ended March 31, 2026. The decrease was further attributable to the absence of occupancy and depreciation costs that had previously been allocated to general and administrative expenses, following the exit of the Methuen, Massachusetts facility in October 2025. These decreases were partially offset by increases in professional services expenses including legal, audit, and advisory fees.
Financing Costs Related to Issuance of Convertible Promissory Notes
In January 2026, we issued convertible promissory notes under which we could receive aggregate proceeds of up to $5.4 million. During the three months ended March 31, 2026, we received proceeds of $4.3 million. We incurred issuance costs of $0.04 million, which was recorded as a financing cost.
Change in Fair Value of Convertible Promissory Notes – Related Parties
The fair value of our convertible promissory notes to related parties increased by $1.4 million for the three months ended March 31, 2026. These notes were issued in 2025. Changes in fair value of convertible promissory notes to related parties are non-cash and are included in net loss.
Change in Fair Value of Convertible Promissory Notes
The fair value of our convertible promissory notes increased by $0.3 million for the three months ended March 31, 2026. These notes were issued in January 2026. Changes in fair value of convertible promissory notes are non-cash and are included in net loss.
Change in Fair Value of Warrant Liabilities
The change in fair value of our warrant liabilities increased by $0.1 million for the three months ended March 31, 2026. There was no change in fair value of our warrant liabilities for the three months ended March 31, 2025. Changes in fair value of warrant liabilities are non-cash and are included in net loss.
Other Income (Expense), Net
Other income (expense), net reflected an expense of $0.2 million for the three months ended March 31, 2026, compared to income of $0.3 million for the three months ended March 31, 2025, a change of $0.5 million. The change is due to fluctuations in the effects of foreign exchange offset by a reduction interest income.
Provision for Income Taxes
The Company did not record an income tax provision for the three months ended March 31, 2026 or 2025 due to losses incurred and the establishment of a full valuation allowance against deferred tax assets.
Liquidity and Capital Resources
Since inception, we have financed our operations primarily from the sales of preferred and convertible preferred stock, and equity-linked securities. As of March 31, 2026, our principal sources of liquidity were our cash and cash equivalents in the amount of $25.5 million. Our cash equivalents are invested primarily in U.S. Treasury money market funds.
As of the date of this filing, Factorial has yet to generate any revenue from its business operations. To date, Factorial has funded its capital expenditure and working capital requirements through equity as further discussed below. Factorial’s ability to successfully develop its products, commence commercial operations and expand its business will depend on many factors, including its working capital needs, the availability of equity or debt financing and, over time, its ability to generate cash flows from operations.
As of March 31, 2026, Factorial’s cash and cash equivalents amounted to $25.5 million. As a result of the closing of the Business Combination, Factorial’s cash and cash equivalents have increased to approximately $116.6 million on June 10, 2026. In January 2026, Factorial entered into agreements with new investors to issue convertible notes where Factorial can receive proceeds up to $5.4 million. Upon the Closing the convertible notes were converted into shares issued by Factorial in conjunction with the
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Business Combination and exchanged for shares of PubCo Series A Common Stock in the Business Combination. As of June 10, 2026, Factorial has received proceeds of $5.4 million.
Factorial expects its capital expenditures and working capital requirements to increase materially in the near future, as it seeks to accelerate its research and development efforts and scale up the production operations with its OEM partners. As described in “Information about Factorial” section of the Proxy Statement/Prospectus, Factorial expects to satisfy early demand for its solid-state battery products by expanding its existing fabrication line operations in South Korea and the United States, to support initial commercial production. During the three months ended March 31, 2026, Factorial paid capital expenditures for such expansion of approximately $0.5 million and expects to incur capital expenditures of approximately $7.5 million during the remainder of 2026. The expansion is expected to be completed by the end of 2027. Beyond the initial investment to expand our existing fabrication line operations in South Korea and the United States, we do not plan to build or acquire additional manufacturing facilities or incur substantial capital expenditures for the expansion of our existing facilities. Instead, as demand grows, including incremental high spec applications and gigawatt-scale ramp-up in the automotive market, we expect to scale primarily through a partner manufacturing approach.
Factorial believes that its cash on hand, including the net proceeds from CGC’s cash in trust post redemption and the PIPE Financing, will be sufficient to meet its working capital and capital expenditure requirements for a period of at least twelve months from the date of this filing and sufficient to fund its operations until it commences commercial production of the Factorial solid-state battery, assuming Factorial is able to do so as currently contemplated. Factorial may, however, need additional cash resources due to changed business conditions or other developments, including unanticipated delays in negotiations with OEMs and tier-one automotive suppliers or other suppliers, supply chain challenges, competitive pressures, and regulatory developments, among other developments. To the extent that Factorial’s current resources are insufficient to satisfy its cash requirements, Factorial may need to seek additional equity or debt financing. If the financing is not available, or if the terms of financing are less desirable than Factorial expects, Factorial may be forced to decrease its level of investment in product development or scale back its operations, which could have an adverse impact on its business and financial prospects.
Based on its current operating plan, the Company estimates that its cash and cash equivalents as of the date of this filing will be sufficient to fund its operating expenses and capital expenditure requirements into the first quarter of 2028. The Company has based this estimate on assumptions that may prove to be wrong and could deplete its liquid resources sooner than it currently expects.
Cash Flows
The following table provides a summary of Factorial’s cash flow data for the periods indicated:
| | | | | | | | | | | | |
| | Three Months Ended March 31, | | | | |
| |||||
| | 2026 | | 2025 | | $ | | % | | |||
Amount in thousands | | | | | | | | | | | | |
Net cash provided (used in) operating activities | | $ | (6,120) | | $ | (6,103) | | $ | 17 | | 0.3 | % |
Net cash provided (used in) investing activities | | | (487) | | | (172) | | $ | 315 | | 183.1 | % |
Net cash provided (used in) financing activities | | | 3,302 | | | (205) | | $ | 3,507 | | N/M | |
Cash Flows from Operating Activities
Factorial’s cash flows used in operating activities to date have been primarily comprised of payroll, material and supplies, facilities expense, and professional services related to research and development and general and administrative activities. As Factorial continues to ramp up hiring for technical headcounts to accelerate its developmental efforts, Factorial expects its cash used in operating activities to increase significantly before it starts to generate any material cash flows from its business.
Net cash used in operating activities was $6.1 million for the three months ended March 31, 2026, and 2025 and primarily represents payments on employee compensation and benefits, R&D materials, facilities, and professional fees. The payments were offset by an increase in receivables under collaboration agreements of $2.2 million during the three months ended March 31, 2026. Receivables under collaboration agreements decreased by $0.5 million during the three months ended March 31, 2025.
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Cash Flows from Investing Activities
Factorial’s cash flows used in investing activities, to date, have been comprised of purchases of property and equipment and purchases and disposals of equipment. Factorial expects the costs to acquire property and equipment to increase in the near future as it builds pilot and sample production lines for its FEST Silicon and Solstice programs.
Net cash used from investing activities was $0.5 million and $0.2 million for the three months ended March 31, 2026, and 2025, respectively, which was used for property and equipment purchases. The 2026 purchases were entirely to support production in Korea.
Cash Flows from Financing Activities
Through March 31, 2026, Factorial has financed its operations primarily through the sale of equity and equity-linked securities. In addition, in January 2026, Factorial entered into agreements with new investors to issue convertible notes where Factorial can receive proceeds up to $5.4 million
Net cash from financing activities was $3.3 million for the three months ended March 31, 2026, and primarily represents proceeds from issuance of convertible notes, offset by the payment of deferred transaction costs. Net cash used in financing activities was $.2 million for the three months ended March 31, 2025, and primarily represents principal payments on the Company’s former finance lease for the Methuen, Massachusetts facility.
Contractual Obligations and Commitments
Factorial leases its headquarters space in Billerica, Massachusetts (the “Billerica Sublease”) under a single sublease classified as an operating lease expiring on October 30th, 2032. The Billerica Sublease does not contain any provision for an extension. Factorial also leased laboratory and office space in Tallahassee, Florida (the “Tallahassee Lease”) under a single lease classified as an operating lease that expired at the end of its term on February 28th, 2025. Additionally, Factorial leases laboratory and storage space, which includes offices, in Woburn, Massachusetts (the “Woburn Lease”) under a single lease classified as an operating lease expiring on April 30, 2028. The Woburn Lease does not contain any provision for extension. Finally, Factorial leased laboratory and manufacturing space, which included offices, in Methuen, Massachusetts (the “Methuen Lease”) under a single lease classified as a financing lease. The Methuen Lease was terminated on October 18, 2025. Factorial has not commenced negotiations with respect to extending the Billerica Sublease or the related lease between the applicable sublessor from whom the Company subleases such property and the ultimate lessor, but intends to do so prior to the expiration thereof.
In January 2026, Factorial entered into agreements with new investors to issue convertible notes where Factorial can receive proceeds up to $5.4 million. Upon the Closing the notes were converted into shares issued by Factorial in conjunction with the Business Combination and exchanged for shares of PubCo Series A Common Stock in the Business Combination. As of June 10, 2026, Factorial has received proceeds of $5.4 million.
Off-Balance Sheet Arrangements
Factorial is not a party to any off-balance sheet arrangements, as defined under SEC rules.
Critical Accounting Policies
Factorial’s financial statements have been prepared in accordance with GAAP. In the preparation of these financial statements, Factorial is required to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported expenses incurred during the reporting periods. There have been no significant changes to our critical accounting policies in the preparation of our condensed consolidated financial statements during the three months ended March 31, 2026 compared to those disclosed in our audited annual consolidated financial statements for the year ended December 31, 2025, included in the Proxy Statement/Prospectus.
Critical Accounting Estimates
There have been no significant changes to our critical accounting estimates in the preparation of our condensed consolidated financial statements during the three months ended March 31, 2026 compared to those disclosed in our audited annual consolidated financial statements for the year ended December 31, 2025, included in the Proxy Statement/Prospectus.
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Emerging Growth Company Status
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 are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.
Each of Factorial and CGC is an “emerging growth company” as defined in Section 2(a) of the Securities Act and has elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. This may make it difficult or impossible to compare Factorial’s financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used. PubCo may continue to qualify as an “emerging growth company” after the Business Combination until the earliest of (i) such time as of which it is a “large accelerated filer”, (ii) its annual gross revenues exceed $1.235 billion, (iii) it issues more than $1 billion of non-convertible debt securities during a three-year period or (iv) the end of the fifth fiscal year after CGC’s IPO, which occurred in 2025.
Recent Accounting Pronouncements
See Note 2 to the audited consolidated financial statements included in the Proxy Statement/Prospectus for more information about recent accounting pronouncements, the timing of their adoption, and Factorial’s assessment, to the extent it has made one, of their potential impact on Factorial’s financial condition and its results of operations and cash flows.
Quantitative and Qualitative Disclosures About Market Risk
Factorial is exposed to a variety of markets and other risks including the effects of change in interest rates, inflation and foreign currency translation and transaction risks as well as risks to the availability of funding sources, hazard events and specific asset risks.
Interest Rate Risk
The market interest risk in Factorial’s financial instruments and financial positions represents the potential loss arising from adverse changes in interest rates. As of March 31, 2026, we had cash and cash equivalents of $25.4 million and restricted cash of $0.9 million, substantially all of which was held in interest-bearing accounts for which the fair market value would be affected by change in the general level of U.S. interest rates. However, due to the short-term maturities and the low-risk profile of our investments, an immediate 10% change in the interest rate would not have a material effect on the fair market value of our cash and cash equivalents.
A significant change in interest rates may also have an impact on the valuation of our equity and equity-linked instruments, as discussed in “Equity Valuations.” This could cause a material change in the carrying value of our equity and equity-linked instruments.
Foreign Currency Risk
Factorial’s U.S. entities and certain foreign subsidiaries have the U.S. dollar as their functional currency, while Factorial’s South Korea entity has the Korean Won as their functional currency. Factorial’s current and potential future subsidiaries could be expected to have other functional currencies, reflecting their principal operating markets. Once Factorial starts commercialization, it expects to be exposed to both additional currency transaction and translation risk. To date, Factorial has not hedged such exposure, although it may do so in the future.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF CGC
References in this section to “we,” “us,” “our” or the “Company” refer to Cartesian Growth Corporation III. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to CGC III Sponsor 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 Amendment. 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 Quarterly Report including, without limitation, statements in this “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. 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 this Quarterly Report and the Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 23, 2026 (the “2025 Annual Report”). 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 on October 29, 2024 as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (“Business Combination”). We intend to effectuate our initial Business Combination using cash derived from the proceeds of the Initial Public Offering and the Private Placement (as defined and described below), our shares, debt or a combination of cash, shares and debt.
While we may pursue our initial Business Combination in any business industry or sector, we are 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 expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial Business Combination will be successful.
Business Combination Agreement
On December 17, 2025, the Company, Fenway MS, Inc., a Delaware corporation (“Merger Sub”), and Factorial Inc., a Delaware corporation (“Factorial”), entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”). The Business Combination Agreement and the transactions contemplated thereby (the “Proposed Business Combination”) were unanimously approved by the boards of directors and special committees comprised of independent and disinterested members of the boards of directors of each of the Company and Factorial. The Proposed Business Combination is expected to close in mid-2026, following the receipt of the requisite approvals of the Company’s shareholders and Factorial stockholders and the fulfillment of other customary closing conditions.
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Amendment to Business Combination Agreement
On March 26, 2026, the Company, Merger Sub and Factorial entered into an Amendment to the Business Combination Agreement (the “BCA Amendment”). The BCA Amendment, among other things, (A) amends the sixth paragraph of the Preamble and inserts a new clause (a) into Section 2.1 of the Business Combination Agreement to provide that the Shareholder Redemption shall occur at least one day prior to the Domestication, thereby clarifying the timing and sequencing of the “Shareholder Redemption relative to the Domestication; (B) amends certain definitions, including the definition of “Ancillary Documents” to remove references to the “CGC Private Warrant Exchange Agreement,” the definition of “Company Convertible Notes” to mean any convertible note or other equity-linked debt instrument convertible into Equity Securities of the Company or any of its subsidiaries outstanding as of the Merger Effective Time; (C) amends clause (b)(iii) of Section 5.8 of the Business Combination Agreement to bifurcate the previously singular “Nasdaq Proposal” into two distinct proposals to be submitted to the Company’s shareholders for approval: (i) the adoption and approval of the issuance of shares in connection with the transactions contemplated by the Business Combination Agreement and (ii) the adoption and approval of the issuance of CGC Shares in connection with the PIPE Financing, and consequently update the definition of “Nasdaq Proposal” to read “Nasdaq Proposals;” and (D) amend and restate Sections 5.21 and 5.22 of the Business Combination Agreement to remove the provisions related to the Warrant Exchange.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from October 29, 2024 (inception) through March 31, 2026 were organizational activities and those necessary to prepare for the Initial Public Offering, and subsequent to the Initial Public Offering, identifying a target company for our initial Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. Subsequent to the Initial Public Offering, we generate non-operating income in the form of interest income on marketable securities held in the trust account established for the benefit of our public shareholders (the “Trust Account”), with Continental Stock Transfer & Trust Company acting as trustee. 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 March 31, 2026, we had a net income of $1,680,417, which consisted of interest earned on investments held in the Trust Account of $2,491,718, offset by general and administrative costs of $811,301.
For the three months ended March 31, 2025, we had a net loss of $20,449, which consisted of general and administrative costs.
Liquidity and Capital Resources and Going Concern
Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of Class B ordinary shares, par value $0.0001 per share (“founder shares”), by the Sponsor and CGC III Sponsor DirectorCo LLC (“DirectorCo” and together with the Sponsor in such capacity, our “initial shareholders”), and a loan from the Sponsor pursuant to an unsecured promissory note (the “Sponsor Promissory Note”). As of May 5, 2025, we had borrowed $250,000 under the Sponsor Promissory Note, which was repaid simultaneously with the closing of the Initial Public Offering.
On May 5, 2025, we consummated the Initial Public Offering of 27,600,000 units (the “Units”) at $10.00 per Unit, which included the full exercise by the underwriters of their over-allotment option of 3,600,000 Units. Each Unit consists of one Class A ordinary share, par value $0.0001 per share (“Class A ordinary shares”), and one-half of one redeemable warrant. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of an aggregate of 6,800,000 private placement warrants (the “Private Placement Warrants”), at a price of $1.00 per warrant, in a private placement to the Sponsor and Cantor Fitzgerald & Co. (“Cantor”), the representative of the underwriters of the Initial Public Offering, generating gross proceeds of $6,800,000 (the “Private Placement”).
Following the Initial Public Offering, including the full exercise of the over-allotment option, and the Private Placement, a total of $276,000,000 ($10.00 per Unit) was placed in the Trust Account. We incurred $18,821,468 of transaction costs, consisting of $4,800,000 of cash underwriting commissions, $13,140,000 of deferred underwriting commissions, and $881,468 of other offering costs (including repayment of the Sponsor Promissory Note).
For the three months ended March 31, 2026, cash used in operating activities was $227,953. Net income of $1,680,417 was affected by interest earned on investments held in the Trust Account of $2,491,718. Changes in operating assets and liabilities
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provided $583,348 of cash for operating activities. For the three months ended March 31, 2025, cash used in operating activities was $0. Net loss of $20,449 was affected by payment of expenses through promissory note – related party of $20,449.
As of March 31, 2026, we had marketable securities held in the Trust Account of $285,868,994 (including approximately $9,868,994 of interest income) consisting of mutual funds primarily invested in 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 (excluding deferred underwriting commissions and less taxes payable, if any), net of redemptions, 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 March 31, 2026, we had cash of $396,210. 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 the 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 an initial 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 an intended initial 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 funds as may be required (“Working Capital Loans”). If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial 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 such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants. As of March 31, 2026 and December 31, 2025, no such Working Capital Loans were outstanding.
In connection with our assessment of going concern considerations in accordance with Accounting Standards Codification (“ASC”) 205-40, “Presentation of Financial Statements - Going Concern,” management has determined that our liquidity condition raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Completion Window.
We believe we will need to raise additional funds in order to meet the expenditures required for operating our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such initial Business Combination.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2026.
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or other long-term liabilities, other than an agreement to pay the Sponsor an aggregate of $10,000 per month for office space, utilities and secretarial and administrative support. We began incurring these fees on May 1, 2025 and will continue to incur these fees monthly until the earlier of the completion of our initial Business Combination and our liquidation.
We granted the underwriters of the Initial Public Offering a 45-day option from May 1, 2025, the effective date of the registration statements for the Initial Public Offering, to purchase up to an additional 3,600,000 Units to cover over-allotments, if any, at the Initial Public Offering price less underwriting discounts and commissions. On May 2, 2025, the underwriters fully exercised their over-allotment option, closing on the 3,600,000 additional Units simultaneously with the Initial Public Offering.
The underwriters of the Initial Public Offering are entitled to a deferred underwriting discount of 4.50% of the gross proceeds of the Initial Public Offering held in the Trust Account, other than the gross proceeds from Units sold pursuant to the underwriters’ over-
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allotment option, and 6.50% of the gross proceeds from Units sold pursuant to the underwriters’ over-allotment option, or $13,140,000 in the aggregate. Subject to the terms of the underwriting agreement for the Initial Public Offering, the deferred underwriting discount (i) will become payable to such underwriters from the amounts held in the Trust Account solely in the event that we complete our initial Business Combination and (ii) will be waived by such underwriters in the event that we do not complete our initial Business Combination.
On December 17, 2025, we entered into a Fee Modification Agreement with Cantor in connection with its contemplated business combination with Factorial Inc., pursuant to which Cantor agreed to modify the previously agreed $13,140,000 deferred underwriting commission. If the business combination with Factorial Inc. is consummated, we (or the target or successor) will pay Cantor a non-refundable modified deferred fee payable at closing equal to $3.75 million plus amounts based on the value of public shares not redeemed in the transaction, subject to an aggregate cap of $13.0 million.
The holders of the founder shares (and the Class A ordinary shares issuable upon conversion of the founder shares), Private Placement Warrants (and the Class A ordinary shares underlying such Private Placement Warrants), and private placement equivalent-warrants that may be issued upon conversion of the Working Capital Loans have registration rights to require us to register a sale of any of our securities held by them and any other securities of the Company acquired by them prior to the consummation of our initial Business Combination pursuant to a registration rights agreement signed on May 1, 2025, the effective date of the registration statements for the Initial Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of our initial Business Combination. Notwithstanding anything to the contrary, Cantor may only make a demand on one occasion and only during the five-year period beginning from the commencement of sales in the Initial Public Offering. In addition, Cantor may participate in a “piggy-back” registration only during the seven-year period beginning from the commencement of sales in the Initial Public Offering. We will bear the expenses incurred in connection with the filing of any such registration statements.
Critical Accounting Estimates and Accounting Policies
The preparation of the unaudited condensed financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses 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, the actual results could differ significantly from those estimates. We have identified the following critical accounting estimates and accounting policies:
Warrant Instruments
We accounted for the public warrants and Private Placement Warrants issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in FASB ASC Topic 815, “Derivatives and Hedging”. Accordingly, the Company evaluated and classified the warrant instruments under equity treatment at their assigned values. The public warrants have been classified within shareholders’ deficit and will not require remeasurement after issuance.
The fair value of the public warrants at issuance was determined using a Monte Carlo simulation model. The valuation required the use of significant assumptions, including expected share price volatility, risk-free interest rate, market-implied probability of completing a business combination, our share price, and the expected remaining term of the warrants. Changes in these assumptions could have a material impact on the estimated fair value of the warrants.
Ordinary Shares Subject to Possible Redemption
The public shares contain a redemption feature which allows for the redemption of such public shares in connection with our liquidation, or if there is a shareholder vote or tender offer in connection with our initial Business Combination. In accordance with ASC 480-10-S99, we classify public shares subject to redemption outside of permanent equity as the redemption provisions are not solely within our control. We recognize changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, we recognized the accretion from initial book value to redemption value. The change in the carrying value of redeemable
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shares will result in charges against additional paid-in capital (to the extent available) and then to accumulated deficit. Accordingly, as of March 31, 2026 and December 31, 2025, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of our condensed balance sheets.
Net Income (Loss) Per Ordinary Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of shares of ordinary shares outstanding for the period. We have two classes of ordinary shares, which are referred to as redeemable Class A ordinary shares and non-redeemable Class A and Class B ordinary shares. Remeasurement associated with the redeemable shares of Class A ordinary shares is excluded from income (loss) per ordinary share as the redemption value approximates fair value.
The calculation of diluted income (loss) per ordinary share does not consider the effect of the warrants issued in connection with the Initial Public Offering and the Private Placement Warrants since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 20,600,000 Class A ordinary shares in the aggregate. As of March 31, 2026 and December 31, 2025, we did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares that then share in our earnings.
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 unaudited condensed financial statements.
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INDEX TO FINANCIAL STATEMENTS
| | |
FACTORIAL INC. UNAUDITED FINANCIAL STATEMENTS | ||
| | Page |
Condensed Consolidated Balance Sheets (Unaudited) | | F-2 |
Condensed Consolidated Statements of Operations (Unaudited) | | F-3 |
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) | | F-4 |
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit (Unaudited) | | F-5 |
Condensed Consolidated Statements of Cash Flows (Unaudited) | | F-6 |
Notes to the Condensed Consolidated Financial Statements (Unaudited) | | F-7 |
| | |
CARTESIAN GROWTH CORPORATION III FINANCIAL STATEMENTS | ||
| | Page |
Condensed Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025 | | F-23 |
Condensed Statements of Operations For the Three Months Ended March 31, 2026 and 2025 (Unaudited) | | F-24 |
Condensed Statements of Changes in Shareholders’ Deficit For the Three Months Ended March 31, 2026 and 2025 (Unaudited) | | F-25 |
Condensed Statement of Cash Flows For the Three Months ended March 31, 2026 and 2025 (Unaudited) | | F-26 |
Notes to Condensed Financial Statements (Unaudited) | | F-27 |
F-1
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FACTORIAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share and per share data)
| | | | | | |
| | As of | ||||
| | March 31, 2026 | | December 31, 2025 | ||
ASSETS |
| | |
| | |
Current assets: |
| | |
| | |
Cash and cash equivalents | | $ | 25,449 | | $ | 28,891 |
Receivables under collaboration agreements (includes $0 and $1,000 as related party as of March 31, 2026, and December 31, 2025, respectively) | |
| 3,360 | |
| 1,152 |
Deferred transaction costs | |
| 3,468 | |
| 1,423 |
Prepaid expenses and other current assets (includes $910 and $1,110 as related party as of March 31, 2026, and December 31, 2025, respectively) | |
| 1,718 | |
| 1,425 |
Total current assets | |
| 33,995 | |
| 32,891 |
Restricted cash | |
| 884 | |
| 881 |
Property and equipment, net | |
| 20,206 | |
| 21,276 |
Operating lease right-of-use assets, net | |
| 7,266 | |
| 7,576 |
Other non-current assets (related party) | |
| 40 | |
| 160 |
TOTAL ASSETS | | $ | 62,391 | | $ | 62,784 |
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK & STOCKHOLDERS’ DEFICIT | |
| | |
| |
Current liabilities: | |
| | |
| |
Accounts payable (includes $30 and $190 as related party, as of March 31, 2026, and December 31, 2025, respectively) | | $ | 656 | | $ | 741 |
Accrued expenses | |
| 4,128 | |
| 2,981 |
Operating lease liabilities, current portion | |
| 1,401 | |
| 1,357 |
Total current liabilities | |
| 6,185 | |
| 5,079 |
Operating lease liabilities, net of current portion | |
| 6,817 | |
| 7,180 |
Convertible promissory notes - related parties, at fair value | |
| 20,296 | |
| 18,889 |
Convertible promissory notes, at fair value | |
| 4,600 | |
| — |
Warrant liabilities for Series B-1 and Series D redeemable convertible preferred stock (includes $2,803 and $2,770 to related parties as of March 31, 2026, and December 31, 2025, respectively) | |
| 3,484 | |
| 3,378 |
Total liabilities | |
| 41,382 | |
| 34,526 |
Commitments and contingencies (Note 8) | |
| | |
| |
Redeemable convertible preferred stock (Note 9): | |
| | |
| |
Series A-1 redeemable convertible preferred stock, $0.0001 par value; 1,234,568 shares authorized, issued and outstanding as March 31, 2026, and December 31, 2025. Liquidation preference of $3,000 as of March 31, 2026, and December 31, 2025 | |
| 327 | |
| 327 |
Series A-2 redeemable convertible preferred stock, $0.0001 par value; 2,362,204 shares authorized, issued and outstanding as of March 31, 2026, and December 31, 2025. Liquidation preference of $6,000 as March 31, 2026, and December 31, 2025 | |
| 655 | |
| 655 |
Series B-1 redeemable convertible preferred stock, $0.0001 par value; 2,738,469 shares authorized; 2,718,539 shares issued and outstanding as of March 31, 2026, and December 31, 2025. Liquidation preference of $22,166 as of March 31, 2026, and December 31, 2025 | |
| 2,169 | |
| 2,169 |
Series C-1 redeemable convertible preferred stock, $0.0001 par value; 3,570,724 shares authorized, issued and outstanding as of March 31, 2026, and December 31, 2025. Liquidation preference of $28,423 as of March 31, 2026, and December 31, 2025 | |
| 28,303 | |
| 28,303 |
Series C-2 redeemable convertible preferred stock, $0.0001 par value; 2,513,698 shares authorized, issued and outstanding as of March 31, 2026, and December 31, 2025. Liquidation preference of $26,857 as of March 31, 2026, and December 31, 2025 | |
| 26,013 | |
| 26,013 |
Series D redeemable convertible preferred stock, $0.0001 par value; 7,625,734 shares authorized; 5,950,204 shares issued and outstanding as of March 31, 2026, and December 31, 2025. Liquidation preference of $202,385 as of March 31, 2026, and December 31, 2025 | |
| 192,185 | |
| 192,185 |
Total redeemable convertible preferred stock | |
| 249,652 | |
| 249,652 |
Stockholders’ deficit: | |
| | |
| |
Common stock, $0.0001 par value; 32,000,000 shares authorized as of March 31, 2026, and December 31, 2025. 5,068,690 and 5,039,438 shares issued and outstanding as of March 31, 2026, and December 31, 2025, respectively | |
| — | |
| — |
Additional paid-in capital | |
| 36,285 | |
| 34,661 |
Accumulated deficit | |
| (264,151) | |
| (255,576) |
Accumulated other comprehensive loss | |
| (743) | |
| (445) |
Treasury stock, at cost; 108,466 shares as of March 31, 2026, and December 31, 2025 | |
| (34) | |
| (34) |
Total stockholders’ deficit | |
| (228,643) | |
| (221,394) |
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK & STOCKHOLDERS’ DEFICIT | | $ | 62,391 | | $ | 62,784 |
See accompanying notes to unaudited condensed consolidated financial statements.
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FACTORIAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share data)
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Operating expenses: | | | | | | |
Research and development, net (includes $0 and $24 of related party research and development reimbursement, net, during the three months ended March 31, 2026, and 2025, respectively) | | $ | (1,942) | | $ | (6,754) |
Selling, general and administrative (includes $88 and $44 of related party expenses, during the three months ended March 31, 2026, and 2025, respectively) | |
| (4,549) | |
| (6,368) |
Loss from operations | |
| (6,491) | |
| (13,122) |
Other (expense) income, net: | |
| | |
| |
Financing costs related to issuance of convertible promissory notes | |
| (37) | |
| — |
Change in fair value of convertible promissory notes – related parties | |
| (1,407) | |
| — |
Change in fair value of convertible promissory notes | |
| (300) | |
| — |
Change in fair value of warrant liabilities (includes related party loss of $33 and $0 during the three months ended March 31, 2026, and 2025, respectively) | |
| (106) | |
| — |
Other (expenses) income, net | |
| (234) | |
| 252 |
Total other (expenses) income, net | |
| (2,084) | |
| 252 |
Loss before provision for income taxes | |
| (8,575) | |
| (12,870) |
Provision for income taxes | |
| — | |
| — |
Net loss | | $ | (8,575) | | $ | (12,870) |
Net loss attributable to common stockholders - basic and diluted (Note 12) | | $ | (8,575) | | $ | (12,870) |
Net loss per share attributable to common stockholders - basic and diluted (Note 12) | | $ | (1.70) | | $ | (2.57) |
Weighted-average common stock outstanding - basic and diluted (Note 12) | |
| 5,056,994 | |
| 5,016,149 |
See accompanying notes to unaudited condensed consolidated financial statements.
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FACTORIAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
(In thousands, except share and per share data)
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Net loss | | $ | (8,575) | | $ | (12,870) |
Other comprehensive income (loss), net of tax | |
| | |
| |
Foreign currency translation adjustments | |
| (298) | |
| 8 |
Other comprehensive income (loss), net of tax | | $ | (298) | | $ | 8 |
Comprehensive loss | | $ | (8,873) | | $ | (12,862) |
Comprehensive loss attributable to stockholders | | $ | (8,873) | | $ | (12,862) |
See accompanying notes to unaudited condensed consolidated financial statements.
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FACTORIAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT (UNAUDITED)
(In thousands, except share data)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | REDEEMABLE | | | | | | | | | | | | | | | | | | | | | |||
| | CONVERTIBLE | | | | | | | | | | | | | ACCUMULATED | | | | | | | ||||
| | PREFERRED STOCK | | COMMON STOCK | | ADDITIONAL | | | | | OTHER | | TREASURY | | TOTAL | ||||||||||
| | $0.0001 PAR VALUE | | $0.0001 PAR VALUE | | PAID-IN | | ACCUMULATED | | COMPREHENSIVE | | STOCK | | STOCKHOLDERS’ | |||||||||||
Three Months Ended March 31, 2026 | | SHARES | | AMOUNT | | SHARES | | AMOUNT | | CAPITAL | | DEFICIT | | INCOME (LOSS) | | AT COST | | DEFICIT | |||||||
Balance as of December 31, 2025 |
| 18,349,937 | | $ | 249,652 |
| 5,039,438 | | $ | — | | $ | 34,661 | | $ | (255,576) | | $ | (445) | | $ | (34) | | $ | (221,394) |
Issuance from stock option exercises |
| — | |
| — |
| 29,252 | |
| — | |
| 90 | |
| — | |
| — | |
| — | |
| 90 |
Stock based compensation |
| — | |
| — |
| — | |
| — | |
| 1,534 | |
| — | |
| — | |
| — | |
| 1,534 |
Foreign currency translation adjustments |
| — | |
| — |
| — | |
| — | |
| — | |
| — | |
| (298) | |
| — | |
| (298) |
Net loss |
| — | |
| — |
| — | |
| — | |
| — | |
| (8,575) | |
| — | |
| — | |
| (8,575) |
Balance as of March 31, 2026 |
| 18,349,937 | | $ | 249,652 |
| 5,068,690 | | $ | — | | $ | 36,285 | | $ | (264,151) | | $ | (743) | | $ | (34) | | $ | (228,643) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | REDEEMABLE | | | | | | | | | | | | | | | | | | | | | |||
| | CONVERTIBLE | | | | | | | | | | | | | ACCUMULATED | | | | | | | ||||
| | PREFERRED STOCK | | COMMON STOCK | | ADDITIONAL | | | | | OTHER | | TREASURY | | TOTAL | ||||||||||
| | $0.0001 PAR VALUE | | $0.0001 PAR VALUE | | PAID-IN | | ACCUMULATED | | COMPREHENSIVE | | STOCK | | STOCKHOLDERS’ | |||||||||||
Three Months Ended March 31, 2025 | | SHARES | | AMOUNT | | SHARES | | AMOUNT | | CAPITAL | | DEFICIT | | INCOME (LOSS) | | AT COST | | DEFICIT | |||||||
Balance as of December 31, 2024 |
| 18,349,937 | | $ | 249,652 |
| 5,016,051 | | $ | — | | $ | 25,193 | | $ | (181,731) | | $ | 76 | | $ | (34) | | $ | (156,496) |
Issuance from stock option exercises |
| — | |
| — |
| 300 | |
| — | |
| 2 | |
| — | |
| — | |
| — | |
| 2 |
Stock based compensation |
| — | |
| — |
| — | |
| — | |
| 3,857 | |
| — | |
| — | |
| — | |
| 3,857 |
Foreign currency translation adjustments |
| — | |
| — |
| — | |
| — | |
| — | |
| — | |
| 8 | |
| — | |
| 8 |
Net loss |
| — | |
| — |
| — | |
| — | |
| — | |
| (12,870) | |
| — | |
| — | |
| (12,870) |
Balance as of March 31, 2025 |
| 18,349,937 | | $ | 249,652 |
| 5,016,351 | | $ | — | | $ | 29,052 | | $ | (194,601) | | $ | 84 | | $ | (34) | | $ | (165,499) |
See accompanying notes to unaudited condensed consolidated financial statements.
F-5
Table of Contents
FACTORIAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands, except share and per share data)
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Cash flows from operating activities: | | | | | | |
Net loss | | $ | (8,575) | | $ | (12,870) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | |
Depreciation and amortization | |
| 882 | |
| 2,191 |
Non-cash lease expenses and amortization | |
| 310 | |
| 302 |
Stock-based compensation | |
| 1,534 | |
| 3,857 |
Change in fair value and financing cost of convertible promissory notes | |
| 337 | |
| — |
Change in fair value of convertible promissory notes – related parties | |
| 1,407 | |
| — |
Change in fair value of warrant liability | |
| 106 | |
| — |
Loss on disposal of property and equipment | |
| 9 | |
| 7 |
Unrealized foreign exchange loss | |
| 487 | |
| 51 |
Non-cash interest | |
| — | |
| 39 |
Changes in operating assets and liabilities: | | | | | | |
Receivables under collaboration agreements | |
| (2,208) | |
| 545 |
Prepaid expenses and other current assets | |
| (306) | |
| 70 |
Other non-current assets | |
| 120 | |
| — |
Accounts payable | |
| (174) | |
| 5 |
Accrued expenses | |
| 271 | |
| (2) |
Operating lease liabilities | |
| (320) | |
| (298) |
Net cash used in operating activities | |
| (6,120) | |
| (6,103) |
Cash flows from investing activities: | | | | | | |
Property and equipment expenditures | |
| (482) | |
| (172) |
Advances on property and equipment | |
| (5) | |
| — |
Net cash used in investing activities | |
| (487) | |
| (172) |
Cash flows from financing activities: | | | | | | |
Proceeds from stock option exercises | |
| 90 | |
| 2 |
Principal paid on finance lease liability | |
| — | |
| (207) |
Deferred transaction costs paid | |
| (1,051) | |
| — |
Financing costs related to issuance of convertible promissory notes | |
| (37) | |
| — |
Proceeds from convertible promissory notes | |
| 4,300 | |
| — |
Net cash provided (used) in financing activities | |
| 3,302 | |
| (205) |
Effects of exchange rate change on cash, cash equivalents and restricted cash | |
| (134) | |
| (36) |
Net change in cash, cash equivalents and restricted cash | |
| (3,439) | |
| (6,516) |
Beginning cash, cash equivalents and restricted cash | |
| 29,772 | |
| 51,421 |
Ending cash, cash equivalents and restricted cash | | $ | 26,333 | | $ | 44,905 |
Supplemental disclosures: | |
| | |
| |
Cash paid for interest | | $ | — | | $ | 146 |
Non-cash investing and financing activities: | |
| | |
| |
Deferred transaction costs included in accounts payable and accrued expenses | | $ | 1,723 | | $ | — |
The following table presents the Company’s cash, cash equivalents and restricted cash by category in the Company’s Condensed Consolidated Balance Sheets: | |
| | |
| |
Cash and cash equivalents | | $ | 25,449 | | $ | 41,719 |
Restricted cash | |
| 884 | |
| 3,186 |
Total cash, cash equivalents and restricted cash | | $ | 26,333 | | $ | 44,905 |
See accompanying notes to unaudited condensed consolidated financial statements.
F-6
Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
Note 1 - The Company
Nature of Operations
Factorial Inc. (“Factorial”, the “Company”, or “we”) is a developer and manufacturer of advanced battery energy storage technologies and solid-state battery (“SSB”) technology. The technologies developed are expected to create a more sustainable future with high-performance batteries for electric vehicles, homes, and critical applications.
de-SPAC Transaction
On December 17, 2025, Cartesian Growth Corporation III, a Cayman Islands exempted company (“CGC”), Fenway MS, Inc., a Delaware corporation (“Merger Sub”), and Factorial Inc., a Delaware corporation (“Factorial”), entered into a Business Combination Agreement (“BCA”). CGC, a publicly traded special purpose acquisition company (“SPAC”) was listed on the Nasdaq Capital Market (“Nasdaq”) under the ticker symbol “CGCT”.
On June 5, 2026, the Merger Sub, a wholly-owned subsidiary of CGC, merged with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of CGC (the “Merger”). In connection with the Merger, CGC was renamed Factorial Energy, Inc. (“PubCo”). PubCo became listed on the Nasdaq under the new ticker symbol “FAC” (“de-SPAC Transaction”). PubCo received gross proceeds of approximately $112,100 in connection with the de-SPAC Transaction and the sale of a private placement of PubCo Series A Common Stock, prior to the payment of transaction expenses (“de-SPAC and PIPE Proceeds”). These unaudited condensed consolidated financial statements do not reflect the impact of the de-SPAC Transaction, since it was closed subsequent to March 31, 2026.
Basis of Presentation
The accompanying interim condensed consolidated financial statements and notes to the condensed consolidated financial statements have been prepared in accordance with accounting standards generally accepted in the United States of America (“U.S. GAAP”) for interim financial information as organized in the Accounting Standards Codification (“ASC”) administrated by the Financial Accounting Standards Board (“FASB”). The accompanying interim Condensed Consolidated Balance Sheet as of March 31, 2026, the interim Condensed Consolidated Statements of Operations, Comprehensive Loss, Redeemable Convertible Preferred Stock and Stockholders’ Deficit, and the interim Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025, are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in management’s opinion, include adjustments consisting of only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of March 31, 2026 and its result of operations for the three months ended March 31, 2026 and 2025 are not necessarily indicative of the results to be expected for the full fiscal year or any other period.
These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s audited annual consolidated financial statements for the year ended December 31, 2025, included in the proxy statement/prospectus filed by CGC on May 6, 2026. The accounting policies applied in the preparation of these interim condensed consolidated financial statements are consistent with those disclosed in the Company’s audited consolidated financial statements and accompanying notes. The disclosures provided herein include only those policies that have been newly adopted or updated during the interim period, if any.
Prior to the receipt of the de-SPAC and PIPE Proceeds, the Company determined that its existing liquidity was not sufficient to fund operations for at least twelve months from the date of issuance of its audited annual consolidated financial statements, which raised substantial doubt about the Company’s ability to continue as a going concern. The Company has experienced net losses and negative cash flows from operations since its inception. The Company expects it will continue to incur significant costs including research and development expenses related to its ongoing operations until it successfully develops a commercial product and achieves revenues adequately to support the Company’s operations. However, Factorial believes that its cash on hand, including the net proceeds from the de-SPAC and PIPE Proceeds will be sufficient to meet its working capital and capital expenditure requirements for a period of at least twelve months from the date of this filing. Accordingly, management has concluded that the substantial doubt
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Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
about the Company’s ability to continue as a going concern has been alleviated. Factorial may, however, need additional cash resources due to changed business conditions or other developments, including unanticipated delays in negotiations with Original Equipment Manufacturers (“OEMs”) and tier-one automotive suppliers or other suppliers, supply chain challenges, competitive pressures, and regulatory developments, among other developments. To the extent that Factorial’s current resources are insufficient to satisfy its cash requirements, Factorial may need to seek additional equity or debt financing. If the financing is not available, or if the terms of financing are less desirable than Factorial expects, Factorial may be forced to decrease its level of investment in product development or scale back its operations.
Note 2 - Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and its four wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in the preparation of the consolidated financial statements in accordance with the provisions under ASC Topic 810 Consolidation.
Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the amounts of expenses during the reporting period. On an ongoing basis, the Company’s management evaluates its estimates, judgments, and methodologies. Significant estimates and assumptions in the consolidated financial statements include those related to warrant liabilities, convertible promissory notes and stock-based compensation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known.
Collaboration Arrangements and Partnership Agreements
The Company enters into collaborative arrangements with various parties individually through joint development agreements (“JDAs”) to evaluate and test its technology. The agreements are executed in anticipation of entering into either a purchasing agreement for the Company’s sellable products or jointly developing a commercialized product. As part of the JDAs, the counterparty may either reimburse the Company for certain costs incurred through a fixed fee payment or per unit payment or share certain costs with the Company.
The Company assesses each collaborative arrangement to determine whether it is in scope for ASC Topic 808, Collaborative Arrangements (“ASC 808”). In making the determination, the Company considers whether the arrangement involves joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities. All of the JDAs entered into by the Company have been concluded to be arrangements within the scope of ASC 808. As a result, payments received/paid from/to the counterparties have been netted against the research and development expenses incurred by the Company.
The Company assesses each collaborative arrangement to determine whether it is in scope for ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). In making the determination, the Company considers if some or all aspects of the arrangement represent a transaction with a customer. All of the JDAs entered into by the Company to date have been concluded to be arrangements outside the scope of ASC 606. As a result, no revenue has been recognized by the Company.
For the three months ended March 31, 2026, and 2025, the Company recognized approximately $3,410 and $34, respectively in expense reimbursements from arrangements, which are recorded net within research and development expenses on the condensed
F-8
Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
consolidated statements of operations. The Company had one partner that accounted for $3,360 in expense reimbursements for the three months ended March 31, 2026.
In February 2026, the Company entered into a new development agreement with PowerCo SE (“PowerCo”). The development agreement has various terms and conditions and has a term of fifteen months; however, PowerCo has the right to terminate under certain conditions. The Company entered into this development agreement for purposes of assessing its technology through evaluation and testing of its batteries.
In January 2026, the Company entered into a partnership agreement with a note holder as further described in Note 7. The partnership agreement includes up to $900 of consideration for the performance of research and development services to the note holder.
Deferred Transaction Costs
The Company complies with the requirements of ASC 340, Other Assets and Deferred Costs, with regards to transaction costs. Prior to the completion of the transaction (potential business combination with Cartesian Growth Corporation III) as mentioned in Note 1 of the audited annual consolidated financial statements for the year ended December 31, 2025, direct transaction costs are capitalized as deferred transaction costs. If the transaction is completed, the deferred transaction costs are charged to additional paid-in capital and offset the proceeds received from the potential business combination. As of March 31, 2026, and December 31, 2025, the Company had $3,468 and $1,423 of deferred transaction costs incurred, respectively.
Convertible Promissory Notes, Fair Value
During January 2026, the Company entered into Note Purchase Agreements and a Convertible Promissory Note Agreement pursuant to which it could receive proceeds up to $5,340 (the “January 2026 Notes”) from new investors. The Company determined that it is eligible for the fair value option election in connection with the Convertible Promissory Notes. The Convertible Promissory Notes meet the definition of a “recognized financial liability” which is an acceptable financial instrument eligible for the fair value option under ASC Topic 825 Financial Instruments (“ASC 825”). At the date of issuance, the fair value of the Convertible Promissory Notes were derived using the scenario-based method (“SBM”) as further described in Note 3. The fair value option election was made to enhance the relevance and transparency of information presented related to the features embedded in the Convertible Promissory Notes.
Changes in the fair value of the Convertible Promissory Notes are recorded as gains or losses in the Company’s consolidated statements of operations in each reporting period. For the three months ended March 31, 2026, the Company recorded a loss on the change in fair value of convertible promissory notes of $300.
Recently Adopted Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. After completion of the business combination described in Note 15, the Company expects it will be considered an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “Jobs Act”). The Jobs Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to avail itself of this extended transition period and, as a result, the Company will not be required to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides optional practical expedients intended to simplify the application of the current expected credit loss model to current trade accounts receivable and current contract assets arising from revenue transactions under Topic 606. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company
F-9
Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
adopted the guidance effective January 1, 2026. The adoption did not have a material impact on its accounting policies, financial position, results of operations, or cash flows, given the short-term nature and historically no loss experience of its trade receivables and contract assets.
New Accounting Pronouncements – Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE) (“ASU 2024-03”), requiring additional disclosure of the nature of expenses included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The amendment in this update applies to all public business entities and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the provisions of the amendments and the impact on its disclosures.
Note 3 - Fair Value Measures
The Company’s financial assets subject to fair value measurements on a recurring basis. The following table presents information about the Company’s financial assets and liabilities measured at fair value and the level of input utilized to determine such fair values (in thousands):
| | | | | | | | | | | | |
| | Fair value measurements as of March 31, 2026 | ||||||||||
| | Total | | Level 1 | | Level 2 | | Level 3 | ||||
Assets: |
| | |
| | |
| | |
| | |
Money market (included in cash and cash equivalents) | | $ | 10,245 | | $ | 10,245 | | $ | — | | $ | — |
Money market (included in restricted cash) | |
| 884 | |
| 884 | |
| — | |
| — |
Total Assets | | $ | 11,129 | | $ | 11,129 | | $ | — | | $ | — |
Liabilities: | |
| | |
| | |
| | |
| |
Warrant liability Series B-1 | | $ | 681 | | $ | — | | $ | — | | $ | 681 |
Warrant liability Series D | |
| 2,803 | |
| — | |
| — | |
| 2,803 |
Convertible promissory notes – related parties | |
| 20,296 | |
| — | |
| — | |
| 20,296 |
Convertible promissory notes | |
| 4,600 | |
| — | |
| — | |
| 4,600 |
Total Liabilities | | $ | 28,380 | | $ | — | | $ | — | | $ | 28,380 |
| | | | | | | | | | | | |
| | Fair value measurements as of December 31, 2025 | ||||||||||
| | Total | | Level 1 | | Level 2 | | Level 3 | ||||
Assets: |
| | |
| | |
| | |
| | |
Money market (included in cash and cash equivalents) | | $ | 14,152 | | $ | 14,152 | | $ | — | | $ | — |
Money market (included in restricted cash) | |
| 881 | |
| 881 | |
| — | |
| — |
Total Assets | | $ | 15,033 | | $ | 15,033 | | $ | — | | $ | — |
Liabilities: | |
| | |
| | |
| | |
| |
Warrant liability Series B-1 | | $ | 608 | | $ | — | | $ | — | | $ | 608 |
Warrant liability Series D | |
| 2,770 | |
| — | |
| — | |
| 2,770 |
Convertible promissory notes – related parties | |
| 18,889 | |
| — | |
| — | |
| 18,889 |
Convertible promissory notes | |
| — | |
| — | |
| — | |
| — |
Total Liabilities | | $ | 22,267 | | $ | — | | $ | — | | $ | 22,267 |
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Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
The following table presents a roll-forward of the aggregate fair values of the Company’s Warrant liabilities and the Company’s Convertible promissory notes for which fair value is determined by Level 3 inputs (in thousands):
| | | | | | | | | | | | | | | |
| | | | | | | | | | | Convertible | | | | |
| | | | | | | | | | | Promissory | | | | |
| | | | | Warrant | | Warrant | | Notes | | Convertible | ||||
| | | | | Liability | | Liability | | Related | | Promissory | ||||
| | Total | | Series B - 1 | | Series D | | Parties | | Notes | |||||
December 31, 2024 | | $ | 1,148 | | $ | 114 | | $ | 1,034 | | $ | — | | $ | — |
Issuance of convertible promissory notes | |
| — | |
| — | |
| — | |
| — | |
| — |
Loss on issuance | |
| — | |
| — | |
| — | |
| — | |
| — |
Change in fair value | |
| — | |
| — | |
| — | |
| — | |
| — |
March 31, 2025 | | $ | 1,148 | | $ | 114 | | $ | 1,034 | | $ | — | | $ | — |
Issuance of convertible promissory notes | |
| 10,000 | |
| — | |
| — | |
| 10,000 | |
| — |
Loss on issuance | |
| 4,500 | |
| — | |
| — | |
| 4,500 | |
| — |
Change in fair value | |
| 6,619 | |
| 494 | |
| 1,736 | |
| 4,389 | |
| — |
December 31, 2025 | | $ | 22,267 | | $ | 608 | | $ | 2,770 | | $ | 18,889 | | $ | — |
Issuance of convertible promissory notes | |
| 4,300 | |
| — | |
| — | |
| — | |
| 4,300 |
Loss on issuance | |
| — | |
| — | |
| — | |
| — | |
| — |
Change in fair value | |
| 1,813 | |
| 73 | |
| 33 | |
| 1,407 | |
| 300 |
March 31, 2026 | | $ | 28,380 | | $ | 681 | | $ | 2,803 | | $ | 20,296 | | $ | 4,600 |
Certain of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as accounts payable, accrued expenses, and other current liabilities.
Warrant Liability Series B-1
In connection with the issuance of Series B-1 redeemable convertible preferred stock of the Company (“Series B-1”) on October 28, 2019, the Company entered into a warrant agreement with Massachusetts Development Finance Agency, or its registered assignees to purchase 19,930 Series B-1 redeemable convertible preferred stock (“Series B-1 Warrant Agreements”). The warrant was issued at a purchase price of $0.81 per share, with a maturity date of February 1, 2029, or the closing of the Company’s Initial Public Offering.
Warrant Liability Series D
In connection with the issuance of Series D redeemable convertible preferred stock of the Company (“Series D”) on November 30, 2021, the Company entered into a warrant for preferred stock with each of Mercedes-Benz Investment Company LLC and Stellantis(each a “Holder”) (“Series D Agreement”). Upon closing of the Series D Agreement, Mercedes-Benz Investment Company LLC and its affiliates (“Mercedes-Benz”) and Stellantis became related parties to the Company. During 2022, the Warrant Agreements were amended and restated with both Stellantis and Mercedes-Benz to eliminate certain milestone-based provisions. The Amended Warrants modified the original agreements by setting the number of shares issuable upon exercise at a fixed 137,814 shares per Holder at a fixed price of $27.2105 per share. The warrants have a maturity date of February 1, 2029, or the closing of the Company’s Initial Public Offering. The Amended Warrants remain consistent with the Warrant Agreements to require settlement through the issuance of the then most senior redeemable convertible preferred stock of the Company to the Holder. At inception, the monetary value of the obligation is based on a fixed monetary amount known at inception.
To estimate the fair value of the Series B-1 and D Warrant Agreements, the Company applied the Probability Weighted Equity Return Method (“PWERM”). Under this approach, the Company develops multiple scenarios and ascribes a probability weighting to each scenario and related estimated fair value. Key inputs and assumptions in the PWERM include the probability and the estimated value of the security in each liquidity scenario, in addition to scenario specific assumptions. The two scenarios used in the valuation of the Series B-1 and D Warrant Agreements are a SPAC Exit scenario and Option Pricing Method scenario. The Company applied a
F-11
Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
90% weighting to the SPAC Exit Scenario and 10% to the Option Pricing Method (“OPM”) scenario as of March 31, 2026. The Company applied a 75% weighting to the SPAC Exit Scenario and 25% to the OPM scenario as of December 31, 2025.
The following are assumptions used in valuing the Series B-1 and D Warrant Agreements in the SPAC Exit scenario, as of March 31, 2026:
| | | | | | | |
| | Series B-1 | | Series D |
| ||
Discount rate |
| | 25 | % | | 25 | % |
Expected life (in years) |
| | 0.20 |
| | 0.20 | |
Future projected price per share | | $ | 37.76 | | $ | 37.76 | |
Strike price | | $ | 0.08 | | $ | 27.21 | |
The following are assumptions used in valuing the Series B-1 and D Warrant Agreements in the SPAC Exit scenario, as of December 31, 2025:
| | | | | | | |
| | Series B-1 | | Series D |
| ||
Discount rate |
| | 25 | % | | 25 | % |
Expected life (in years) |
| | 0.38 |
| | 0.38 | |
Future projected price per share | | $ | 37.76 | | $ | 37.76 | |
Strike price | | $ | 0.08 | | $ | 27.21 | |
The significant unobservable inputs used in the fair value measurement of the Series B-1 and D warrant liability in the SPAC Exit scenario are the discount rate and the expected life. The future projected price per share is estimated based on the SPAC purchase price as outlined in the Company’s Business Combination Agreement. The discount rate reflects current market assessments of the time of value of money and the risks specific to the Company given its stage of development.
The expected life is based upon the fact that the Warrant Agreements would not persist through a liquidity event, and therefore the expected life is based upon management’s estimated holding period to an exit/liquidity event.
The following are the assumptions used in valuing the Series B-1 and D Warrant Agreements in the OPM scenario, as of March 31, 2026:
| | | | | | | |
| | Series B-1 | | Series D |
| ||
Share value | | $ | 18.16 | | $ | 33.61 | |
Assumed volatility | |
| 90 | % |
| 37 | % |
Assumed risk-free interest rate | |
| 3.8 | % |
| 3.8 | % |
Expected life (in years) | |
| 2 | |
| 2 | |
Expected dividends | |
| — | |
| — | |
The following are the assumptions used in valuing the Series B-1 and D Warrant Agreements in the OPM scenario, as of December 31, 2025:
| | | | | | | |
| | Series B-1 | | Series D |
| ||
Share value | | $ | 18.14 | | $ | 33.71 | |
Assumed volatility | |
| 90 | % |
| 37 | % |
Assumed risk-free interest rate | |
| 3.5 | % |
| 3.5 | % |
Expected life (in years) | |
| 2 | |
| 2 | |
Expected dividends | |
| — | |
| — | |
The significant unobservable inputs used in the fair value measurement of the Series B-1 and D warrant liability in the OPM scenario are the equity value of the Company, the expected life and assumed volatility. The equity value of the Company is derived from a discounted cash flow analysis based on the Company’s best estimates of future cash flows. The assumptions underlying these
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Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
valuations include projected future revenue and cash flows, discount rates, market adjustments and multiples, selection of comparable companies, the lack of marketability of our equity, and probability of possible future events, including the expected time to liquidity. These underlying assumptions represent our best estimates at the time they were made, which involves inherent uncertainty and the application of judgment. Changes to the key assumptions and estimates used in the valuations could result in materially different fair values of our common and preferred stock at each valuation date.
The expected life is based upon the fact that the Warrant Agreements would not persist through a liquidity event, and therefore the expected life is based upon management’s estimated holding period to an exit/liquidity event. The expected volatility is based upon observed historical volatilities of a cohort of guideline public companies. Equity allocation mechanics are based upon the distribution waterfall as outlined in the Company’s operating agreement. Significant increases (decreases) in the equity value, the expected life, or the assumed volatility, could result in significantly higher (lower) fair value measurements.
As of March 31, 2026, the Company had reserved 295,558 shares of common stock for potential conversion of Series B-1 and D Warrants.
Convertible Promissory Notes – Related Parties
To estimate the fair value of the August 2025 Notes, the Company applied the SBM method. The fair value of the August 2025 Notes includes an estimate of the value of accrued interest. The significant unobservable inputs used in the fair value measurement of the August 2025 Notes are the underlying share value, the expected life, assumed volatility, assumed discount rate, share value, and the probability of scenarios.
The assumptions used in determining the fair value of the August 2025 Notes under the SBM during the three months ended March 31, 2026, were as follows:
| | | | |
| | Series D |
| |
| | Three Months Ended |
| |
| | March 31, 2026 |
| |
SPAC Exit Scenario |
| | 85 | % |
Qualified Financing Scenario |
| | 7.5 | % |
Dissolution Scenario |
| | 7.5 | % |
Assumed volatility |
| | 40 | % |
Assumed risk-free interest rate |
| | 3.7 | % |
Expected life (in years) |
| | 0.50 | |
Assumed discount rate |
| | 20 | % |
Share value | | $ | 37.35 | |
The assumptions used in determining the fair value of the August 2025 Notes under the SBM as of December 31, 2025, were as follows:
| | | | |
| | Series D |
| |
| | December 31, 2025 |
| |
SPAC Exit Scenario |
| | 75 | % |
Qualified Financing Scenario |
| | 15 | % |
Dissolution Scenario |
| | 10 | % |
Assumed volatility |
| | 40 | % |
Assumed risk-free interest rate |
| | 3.50 | % |
Expected life (in years) |
| | 0.75 | |
Assumed discount rate |
| | 20 | % |
Share value | | $ | 34.47 | |
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Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
To estimate the share value of the Series D redeemable convertible preferred stock we used a PWERM. The two scenarios used in the estimation of the Series D redeemable convertible preferred stock are a SPAC Exit scenario and Option Pricing Method scenario. As of March 31, 2026, we applied a 85% weighting to the SPAC Exit scenario and 15% weighting to the Option Pricing Method scenario.
Convertible Promissory Notes
To estimate the fair value of the January 2026 Notes, the Company applied the SBM method. The fair value of the January 2026 Notes includes an estimate of the value of accrued interest. The significant unobservable inputs used in the fair value measurement of the January 2026 Notes are the underlying share value, the expected life, assumed volatility, assumed discount rate, share value, and the probability of scenarios.
The assumptions used in determining the fair value of the January 2026 Notes under the SBM during the three months ended March 31, 2026, were as follows:
| | | | | |
| | Three Months Ended | | |
|
| | March 31, 2026 | | January 26, 2026 |
|
SPAC Exit Scenario |
| 85 | % | 80 | % |
Qualified Financing Scenario |
| 7.5 | % | 10 | % |
Dissolution Scenario |
| 7.5 | % | 10 | % |
Expected life (in years) |
| 0.50 |
| 0.68 | |
Assumed discount rate |
| 20 | % | 20 | % |
Note 4 - Property and Equipment
Property and equipment, net consists of the following (in thousands):
| | | | | | |
| | As of | ||||
| | March 31, 2026 | | December 31, 2025 | ||
Leasehold improvements | | $ | 10,680 | | $ | 10,680 |
Machinery and equipment | |
| 16,081 | |
| 16,315 |
Furniture and fixtures | |
| 414 | |
| 419 |
Computer and software | |
| 211 | |
| 216 |
Buildings | |
| 1,160 | |
| 1,227 |
Building Fixtures | |
| 1,256 | |
| 1,206 |
Land | |
| 3,196 | |
| 3,382 |
Advances on purchases of property and equipment | |
| 617 | |
| 632 |
Total | | $ | 33,615 | | $ | 34,077 |
Accumulated depreciation | |
| (13,409) | |
| (12,801) |
Total | | $ | 20,206 | | $ | 21,276 |
Advances on purchases of property and equipment are payments made before the related asset (such as machinery and equipment) are delivered and are not depreciated until the asset is placed in service.
Depreciation expense totaled $882 and $1,984 for the three months ended March 31, 2026, and 2025, respectively, and was recorded as operating expenses in the condensed consolidated statements of operations. Depreciation expense was allocated as $850 and $1,775 to research and development expense, net and $32 and $209 to selling, general and administrative expenses for the three months ended, March 31, 2026, and 2025, respectively.
F-14
Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
Note 5 - Accrued Expenses
Accrued expenses consisted of the following (in thousands):
| | | | | | |
| | As of | ||||
| | March 31, 2026 | | December 31, 2025 | ||
Accrued compensation and benefits | | $ | 838 | | $ | 760 |
Accrued audit and tax services | |
| 166 | |
| 67 |
Accrued legal and professional | |
| 320 | |
| 172 |
Accrued transaction costs | |
| 2,327 | |
| 1,423 |
Accrued other | |
| 477 | |
| 559 |
Total accrued expenses | | $ | 4,128 | | $ | 2,981 |
NOTE 6 – CONVERTIBLE PROMISSORY NOTES – RELATED PARTIES
The following table shows the components of the Company’s indebtedness (in thousands):
| | | |
| | Three Months Ended | |
| | March 31, 2026 | |
Total convertible promissory notes - related parties, at fair value as of December 31, 2025 | | $ | 18,889 |
Change in fair value | |
| 1,407 |
Total convertible promissory notes - related parties, at fair value | | $ | 20,296 |
NOTE 7 – CONVERTIBLE PROMISSORY NOTES
During January 2026, the Company issued the January 2026 Notes pursuant to which it could receive proceeds up to $5,340. The January 2026 Notes bear interest of 5% per annum and mature on either August 1, 2028 or January 1, 2029. The January 2026 Notes provide the holders with certain conversion features including: a mandatory conversion upon a qualified financing event, an optional conversion upon a non-qualified financing event and an optional conversion upon an acquisition of the Company.
Concurrently with the issuance of the January 2026 Notes, the Company entered into a partnership agreement with a note holder. Pursuant to the partnership agreement, the Company may receive up to $2,240 in total consideration. The deliverables of the partnership agreement coincide with payments to the Company on the convertible note. Deliverables under the partnership agreement are aligned with, and contingent upon, funding milestones under the convertible note, which provide for up to $1,340 in aggregate principal funding to the Company of which $300 in proceeds have been received as of March 31, 2026, with an issuance cost of $37. The note holder had the option to request funding in part or in full. Subsequently, on May 18, 2026, the Company received the remaining proceeds of $1,040. In addition, the partnership agreement includes up to $900 of consideration for the performance of research and development services to the note holder.
The following table shows the components of the Company’s indebtedness (in thousands):
| | | |
| | Three Months Ended | |
| | March 31, 2026 | |
Convertible promissory notes principal balance | | $ | 4,300 |
Change in fair value | |
| 300 |
Total convertible promissory notes, at fair value | | $ | 4,600 |
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Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
Note 8 - Commitments and Contingencies
Leases
The Company’s leases include various operating leases for offices, laboratory space, and storage space, expiring at various dates through November 2032. Many leases include one or more options to renew. The Company does not assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably certain. The Company’s finance lease for the facility in Methuen, Massachusetts was terminated in October 2025. Fixed rent generally escalates each year, and the Company is responsible for a portion of the landlords’ operating expenses such as property tax, insurance, and common area maintenance.
The components of lease expenses recorded within the condensed consolidated statements of operations for the three months ended March 31, 2026, and 2025 are as follows (in thousands):
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Finance lease costs: |
| | |
| | |
Amortization of right-of-use assets | | $ | — | | $ | 207 |
Interest on financing lease liabilities | |
| — | |
| 185 |
Total finance lease costs | |
| — | |
| 392 |
Operating lease costs: | |
| | |
| |
Operating lease expenses | |
| 480 | |
| 497 |
Variable lease expenses | |
| 217 | |
| 199 |
Short-term lease expenses | |
| — | |
| 18 |
Total operating lease costs | | | 697 | | | 714 |
Total lease expenses | | $ | 697 | | $ | 1,106 |
Other information related to agreements treated as finance and operating leases was as follows:
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Operating cash flows from operating leases | | $ | (489) | | $ | (493) |
Financing cash flows from finance lease | | $ | — | | $ | (353) |
| | | | | |
| | As of |
| ||
| | March 31, 2026 | | December 31, 2025 |
|
Weighted-average remaining lease term – operating leases (years) |
| 5.5 |
| 5.9 | |
Weighted-average discount rate – operating leases |
| 8.04 | % | 8.05 | % |
Remaining lease term – finance lease (years) |
| — |
| — | |
Discount rate – finance lease |
| N/A |
| N/A | |
The remaining lease obligations are substantially unchanged from year end.
Legal Proceedings
From time to time, the Company may be subject to legal claims or be party to legal proceedings arising in the normal course of business. While the outcome of such claims or proceedings cannot be predicted with certainty, the Company’s management expects that any such liabilities, to the extent not provided for by insurance or otherwise, would not have a material effect on the Company’s financial condition, results of operations or cash flows.
The Company is party to an arbitration, initiated on March 14, 2025, before the International Centre for Dispute Resolution. A hearing was conducted in June 2026, and post-hearing submission are due in July 2026. The hearing is regarding a contractual dispute in which a vendor is seeking $4,900 in damages, interest, and other relief. The Company does not believe that such payment is owed,
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Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
is defending against such claims, and it has asserted counterclaims. The Company believes that a loss is neither probable nor remote and is unable to reasonably estimate the amount or range of possible loss due to the stage of the proceedings and the uncertainty regarding the resolution of the competing claims.
Note 9 - Redeemable Convertible Preferred Stock
No redeemable convertible preferred stock was issued, converted, or redeemed during the three months ended March 31, 2026. Total carrying value remains $249,652. Terms and rights are unchanged from the audited annual consolidated financial statements for the year ended December 31, 2025.
Note 10 - Common Stock
The Company was authorized to issue 32,000,000 shares of its common stock as of March 31, 2026, and December 31, 2025. The voting, dividend, and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preference of the Preferred Stockholders set forth in Note 9 - Redeemable Convertible Preferred Stock.
Each share of common stock entitles the holder to one vote, together with the Preferred Stockholders, on all matters submitted to a vote of the Company’s stockholders. Terms and rights are unchanged from the audited annual consolidated financial statements for the year ended December 31, 2025.
Total common shares issued and outstanding were 5,068,690 as of March 31, 2026.
Note 11 - Stock Based Compensation
Equity Compensation Plans
The 2019 Stock Incentive Plan (the “2019 Plan”), was adopted by the Board of Directors to reserve a sufficient number of shares to facilitate the grants of stock options and restricted stock to employees, officers and directors, non-employee advisors and consultants in exchange for certain services. Awards granted under the 2019 Plan are issued at the discretion of the Board of Directors. Awards generally vest over four years; however, vesting terms are subject to terms set forth by the Board of Directors when the award is granted. Stock options granted under the 2019 Plan expire 10 years from the date of grant, which was subsequently amended.
Share-Based Compensation Awards
The Company estimates the fair value of stock options with service conditions and performance conditions using the Black-Scholes valuation model. The resulting fair value is recorded as compensation cost on a straight-line basis over the requisite service period. The key inputs and assumptions used to estimate the fair value of stock options include the value of the underlying stock at grant date, expected term, stock price volatility, the appropriate annual risk-free rate, and expected annual dividend yield.
Given the Company’s lack of historical data, the Company’s estimate of the expected term was calculated in accordance with the simplified method. Additionally, the Company has identified publicly traded comparable companies with similar characteristics (e.g., lithium battery manufacturing) whose historical stock price volatilities were used in the estimation of expected volatility. The risk-free interest rate is based on the U.S. Treasury zero coupon instrument with a duration/term that equals the expected term calculated by the Company.
For stock options with performance conditions, vesting is also subject to service conditions; however, the number of options that ultimately vest also depends on the attainment of certain predefined performance criteria. Note that stock options with performance conditions were issued to two strategic consultants of the Company and the performance criteria are related to the achievement of certain third-party purchase orders and contracts. No stock options with performance conditions were granted during the three months ended March 31, 2026.
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Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
The assumptions made for purposes of estimating the fair value under the Black Scholes valuation model for stock options granted during the three months ended March 31, 2026 and 2025 were as follows:
| | | | |
| | Three Months Ended March 31, | ||
| | 2026 | | 2025 |
Expected term of options (years) | | 5.00 - 6.07 | | 5.00 - 6.06 |
Risk free interest rate |
| 3.83% - 3.98% |
| 4.02% - 4.43% |
Volatility |
| 60.92% - 65.79% |
| 64.37% - 65.81% |
Expected dividend yield |
| — |
| — |
Common stock grant date fair value per share | | $25.18 - $27.78 |
| $3.23 |
Option grant date fair value per share | | $13.89 - $17.42 | | $1.87 - $2.03 |
For the three months ended March 31, 2026, and 2025, the Company recorded stock-based compensation expense of $1,534 and $3,857, respectively. The following table provides stock-based compensation expense by class reflected in the Company’s condensed consolidated statements of operations related to stock options (including stock options with performance conditions) for the three months ended March 31, 2026, and 2025 (in thousands):
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Research and development | | $ | 240 | | $ | 347 |
Selling, general and administrative | |
| 1,294 | |
| 3,510 |
Total | | $ | 1,534 | | $ | 3,857 |
Stock Options
The following table summarizes stock option activity for the three months ended March 31, 2026, and 2025:
| | | | | | | | | | |
| | | | | | | Weighted- | | | |
| | | | | | | Average | | | |
| | | | | | | Remaining | | | |
| | | | Weighted- | | Contractual | | Aggregate | ||
| | Number of | | Average | | Term | | Intrinsic Value | ||
| | Options | | Exercise Price | | (Years) | | (in thousands) | ||
Outstanding as of December 31, 2024 (1) |
| 5,085,269 | | $ | 6.78 |
| 7.28 | | $ | 1,172 |
Granted |
| 594,691 | |
| 3.23 |
| | |
| |
Exercised |
| (300) | |
| 8.21 |
| | |
| — |
Cancelled or forfeited |
| (555,215) | |
| 3.86 |
| | |
| |
Outstanding as of March 31, 2025 |
| 5,124,445 | | $ | 3.00 |
| 7.11 | | $ | 1,172 |
Options vested and expected to vest as of March 31, 2025 (2) |
| 5,004,445 | | $ | 3.00 |
| 7.08 | |
| |
Exercisable as of March 31, 2025 |
| 3,696,298 | | $ | 2.91 |
| 6.68 | | $ | 1,172 |
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Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
| | | | | | | | | | |
| | | | | | | Weighted- | | | |
| | | | | | | Average | | | |
| | | | | | | Remaining | | | |
| | | | Weighted- | | Contractual | | Aggregate | ||
| | Number of | | Average | | Term | | Intrinsic Value | ||
| | Options | | Exercise Price | | (Years) | | (in thousands) | ||
Outstanding as of December 31, 2025 (3) |
| 5,546,772 | | $ | 3.83 |
| 6.94 | | $ | 31,996 |
Granted |
| 33,580 | |
| 25.45 |
| | |
| |
Exercised |
| (29,252) | |
| 3.10 |
| 667 | |
| |
Cancelled or forfeited |
| (12,179) | |
| 5.08 |
| | |
| |
Outstanding as of March 31, 2026 |
| 5,538,921 | | $ | 4.03 |
| 6.72 | | $ | 131,528 |
Options vested and expected to vest as of March 31, 2026 (4) |
| 5,448,921 | | $ | 4.05 |
| 6.71 | |
| |
Exercisable as of March 31, 2026 |
| 4,436,262 | | $ | 3.06 |
| 6.18 | | $ | 109,673 |
| (1) | Includes 245,628 of stock options subject to performance conditions |
| (2) | Does not include 120,000 stock options subject to performance conditions which are improbable as of March 31, 2025. |
| (3) | Includes 215,628 of stock options subject to performance conditions |
| (4) | Does not include 90,000 stock options subject to performance conditions which are improbable as of March 31, 2026. |
The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. As of March 31, 2026 there was $6,803 of total unrecognized stock-based compensation expense to be recognized over a weighted-average period of 4 years, respectively. As of March 31, 2026, the Company had $656 of total unrecognized stock-based compensation expense included in the total above for stock options with performance conditions currently considered not probable of achievement.
Note 12 - Net Loss Per Common Share
Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period.
Basic and diluted losses per share are calculated as follows (in thousands, except share and per share data):
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Numerator: | | | | | | |
Net loss | | $ | (8,575) | | $ | (12,870) |
Net loss attributable to common stockholders—basic and diluted | | $ | (8,575) | | $ | (12,870) |
Denominator: | |
| | |
| |
Weighted average number of common shares outstanding | |
| 5,056,994 | |
| 5,016,149 |
Net loss per share attributable to common stockholders—basic and diluted | | $ | (1.70) | | $ | (2.57) |
F-19
Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
The following common stock equivalents were excluded from the calculation of diluted loss per share attributable to common stockholders because their inclusion would have been anti-dilutive:
| | | | |
| | Three Months Ended March 31, | ||
| | 2026 | | 2025 |
Series A-1 redeemable convertible preferred stock | | 1,234,568 | | 1,234,568 |
Series A-2 redeemable convertible preferred stock |
| 2,362,204 |
| 2,362,204 |
Series B-1 redeemable convertible preferred stock |
| 2,718,539 |
| 2,718,539 |
Series C-1 redeemable convertible preferred stock |
| 3,570,724 |
| 3,570,724 |
Series C-2 redeemable convertible preferred stock |
| 2,513,698 |
| 2,513,698 |
Series D redeemable convertible preferred stock |
| 5,950,204 |
| 5,950,204 |
Preferred stock warrants |
| 295,558 |
| 295,558 |
Preferred stock issued upon conversion of convertible promissory notes (1) |
| 560,024 |
| — |
Options to purchase common stock |
| 5,538,921 |
| 5,124,445 |
Restricted stock units |
| 1,394,670 |
| 1,414,922 |
| (1) | Due to the multiple conversion options provided for within the Company’s convertible promissory notes, the Company applied the if-converted method to the calculation of the anti-dilutive shares underlying such notes to determine the estimated shares that the notes would convert into as of March 31, 2026. This assumption included consideration of the multiple conversion features and applying probability weightings to an assumed price of approximately $38 per share ($19 per share after applying the 50% discount). |
NOTE 13 – SEGMENT INFORMATION
The Company conducts business as a single operating segment. In reaching this conclusion, management considers the definition of the (“CODM”), how the business is defined by the CODM, the nature of the information provided to the CODM, and how that information is used to make operating decisions, allocate resources, and assess performance. The Company’s CODM is the chief executive officer. The results of operations provided to and analyzed by the CODM are at the consolidated level which is the level that the CODM manages the business, allocates resources, makes key resource decisions, and assesses performance.
The key measure of segment profit and loss that the CODM uses to allocate resources and assess performance is the Company’s net loss. The table below shows a reconciliation of the Company’s net loss, including the significant expense categories regularly provided to and reviewed by the CODM, as computed under U.S. GAAP to the Company’s total net loss in the condensed consolidated statements of operations:
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Operating expenses | | | | | | |
Reimbursement from JDAs and others | | $ | 3,410 | | $ | 34 |
Payroll expense | |
| (5,860) | |
| (8,133) |
Occupancy expense | |
| (859) | |
| (1,497) |
Professional service expense | |
| (916) | |
| (606) |
Research and development expense | |
| (933) | |
| (537) |
Depreciation expense | |
| (882) | |
| (1,984) |
Other operating expense | |
| (451) | |
| (399) |
Loss from operations | | $ | (6,491) | | $ | (13,122) |
Total other income (expense), net | |
| (2,084) | |
| 252 |
Net loss | | $ | (8,575) | | $ | (12,870) |
Assets provided to CODM are consistent with those reported on the condensed consolidated balance sheet with particular emphasis on the company’s available liquidity, including its cash and cash equivalents reduced by current liabilities. All long-lived assets are maintained in, and all losses are attributable to the United States of America and South Korea.
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Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
NOTE 14 - Related Party Transactions
Collaboration Arrangements
The Company has established JDAs with various partners with some of the partners also making investments in the Company through the purchase of preferred shares. In connection with the Series D Agreements, the Company entered into both Warrant and JDA agreements with Mercedes-Benz and Stellantis.
Uwe Keller, a member of the Company’s Board of Directors, represents Mercedes-Benz who is an investor in the Company’s Preferred Stock and holder of Series D Warrants. For the three months ended March 31, 2026, the Company recognized no expense reimbursements for the services provided under the JDA with Mercedes-Benz. For the three months ended March 31, 2025, the Company recognized $24 in expense reimbursements for the services provided under the JDA with Mercedes-Benz, which are recorded net within research and development expenses on the condensed consolidated statement of operations. There were no amounts due from Mercedes-Benz as of March 31, 2026, and December 31, 2025.
Michael Bly, a member of the Company’s Board of Directors, represents Stellantis who is an investor in the Company’s Preferred Stock and holder of Series D Warrants. For the three months ended March 31, 2026, and 2025, the Company recognized no expense reimbursements for the services provided under the JDA with Stellantis. There were no amounts due from Stellantis as of March 31, 2026. Amounts due from Stellantis totaled $1,000 which are included in receivables under collaboration agreements on the condensed consolidated balance sheets as of December 31, 2025.
In August 2025, the Company modified its existing JDA with Stellantis. The modified JDA required the Company to make a $2,000 payment to Stellantis for services related to the production and testing of a demo fleet. The Company and Stellantis jointly developed a production timeline as outlined in the agreement, which includes deliverables of Stellantis to the Company through June 2027 such as, module and pack safety reports, battery management system results, installation and retrofitting of test cells, and validation results of the demo fleet. In December 2025, the Company prepaid $2,000 to Stellantis for these services. As of March 31, 2026, and December 31, 2025, $40 and $160 are included in other non-current assets, respectively on the condensed consolidated balance sheets. As of March 31, 2026, and December 31, 2025, $910 and $950 are included in prepaid expenses and other current assets, respectively on the condensed consolidated balance sheets. During the three months ended March 31, 2026, $160 of expense was recognized as part of the agreement and is included in research and development expenses on the condensed consolidated statements of operations.
Consulting Arrangements
In March of 2020, the Company entered into a consulting services agreement with Joseph Taylor who also serves as Executive Chairman of the Company’s Board of Directors. For the three months ended March 31, 2026 and 2025, the Company incurred $88 and $44, respectively in expenses for consulting services provided by Joesph Taylor recorded within selling, general and administrative expenses on the condensed consolidated statements of operations. Amounts due to Joseph Taylor totaled $30 and $190 as of March 31, 2026, and December 31, 2025, respectively and are included in accounts payable.
Note 15 - Subsequent Events
The Company has evaluated subsequent events through June 10, 2026.
As discussed in Note 1, on June 5, 2026, upon the closing of the de-SPAC Transaction, the Company became a wholly-owned subsidiary of CGC. Under the BCA, each outstanding Class A ordinary share of CGC (each, a “CGC Class A Share”), each outstanding Class B ordinary share of CGC and each outstanding preference share of CGC was converted into one share of Series A Common Stock, par value $0.00001 per share, (the “PubCo Series A Common Stock”). Each share of Factorial Common Stock (excluding treasury shares, dissenting shares and shares held by the Factorial founders) issued and outstanding as of immediately prior to the Effective Time, was automatically canceled and extinguished and exchanged for a number of shares of PubCo Series A Common Stock equal to the consideration ratio of approximately 3.67 (the “Consideration Ratio”), which was based on an implied
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Table of Contents
Factorial Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
Factorial equity value of $1,100,000. Each share of Factorial Common Stock held by the Factorial Founders issued and outstanding as of immediately prior to the Effective Time, was automatically canceled and extinguished and exchanged for a number of shares of Series B Common Stock, par value $0.00001 per share (the “PubCo Series B Common Stock”) equal to the Consideration Ratio. Each share of Factorial Preferred Stock issued and outstanding as of immediately prior to the Effective Time was automatically canceled and extinguished and converted into the right to receive a number of shares of PubCo Series A Common Stock, par value $0.00001 per share, equal to the Consideration Ratio. PubCo received gross proceeds of approximately $112,100 in connection with the de-SPAC Transaction and the sale of a private placement of PubCo Series A Common Stock, prior to the payment of transaction expenses.
Additionally, and in congruence with the consummation of the de-SPAC transaction, each option to purchase Factorial Common Stock (each, a “Factorial Option”), whether vested or unvested, ceased to represent the right to purchase Factorial Common Shares and was canceled in exchange for options to purchase PubCo Series A Common Stock under the equity incentive plan adopted by CGC in advance of the Closing (the “PubCo Equity Incentive Plan”), in an amount equal to the product of (x) the number shares of Factorial Common Stock subject to such Factorial Option immediately prior to the Effective Time, multiplied by (y) the Consideration Ratio, at an exercise price per share equal to the quotient of (i) the exercise price per share of such Factorial Option immediately prior to the Effective Time, divided by (ii) the Consideration Ratio, and generally subject to the same terms and conditions that applied to the corresponding Factorial Option immediately prior to the Effective Time. Each restricted stock unit award that was outstanding with respect to Factorial Common Stock (each, a “Factorial RSU Award”), whether vested or unvested, ceased to have any rights in respect of the Factorial Common Stock and was canceled in exchange for a restricted stock unit award under the PubCo Equity Incentive Plan that settled in a number of shares of PubCo Series A Common Stock in an amount and subject to such terms and conditions, in each case, as set forth on the allocation schedule, that was generally subject to the same terms and conditions that applied to the corresponding Factorial RSU Award immediately prior to the Effective Time.
On April 1, 2026, the Company modified an outstanding equity award granted to a consultant that included performance based vesting conditions. As a result of the modification, 90,000 previously granted stock options were forfeited. Pursuant to the modification, and contingent upon the closing of the Company’s pending business combination, the Company is required to grant the consultant RSUs with an aggregate grant date fair value of $250. Additionally, the modification provides for the issuance of 100,000 RSUs subject to performance conditions as defined in the amended agreement.
On April 27, 2026, the Company entered into a definitive agreement to sell its wholly-owned subsidiary Factorial Germany GmbH for a total consideration of $6. The transaction will close at a later date, subject to the satisfaction of customary closing conditions in accordance with German law and registration with the German Commercial Register.
On May 18, 2026, the Company received $1,040 of proceeds related to the January 2026 Notes.
On June 5, 2026, the Company entered into an agreement with Clear Street LLC (“Clear Street”), pursuant to which Clear Street agreed to act as capital markets advisor to the Company for a term of twelve months. As consideration for these services, the agreement provides for the issuance to Clear Street of 100,000 shares of PubCo Series A Common Stock.
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CARTESIAN GROWTH CORPORATION III
CONDENSED BALANCE SHEETS
| | | | | | |
| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
| | (Unaudited) | | | | |
Assets |
| | |
| | |
Current assets | | | | | | |
Cash | | $ | | | $ | |
Prepaid insurance - current | | | | | | |
Prepaid expenses | | | | | | |
Total current assets | | | | | | |
Prepaid insurance – long term | | | | | | |
Investments held in Trust Account | | | | | | |
Total Assets | | $ | | | $ | |
| | | | | | |
Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit | |
| | |
| |
Current Liabilities | | | | | | |
Accrued offering costs | | $ | | | $ | |
Accrued expenses | | | | | | |
Total current liabilities | |
| | |
| |
Deferred underwriting fee | | | | | | |
Total Liabilities | | | | | | |
| | | | | | |
Commitments and Contingencies (Note 6) | | | | | | |
Class A ordinary shares subject to possible redemption, | | | | | | |
| | | | | | |
Shareholders’ Deficit | |
| | |
| |
Preference shares, $ | |
| — | |
| — |
Class A ordinary shares, $ | |
| |
| ||
Class B ordinary shares, $ | |
| | |
| |
Additional paid-in capital | |
| — | |
| — |
Accumulated deficit | |
| ( | |
| ( |
Total Shareholders’ Deficit | |
| ( | |
| ( |
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit | | $ | | | $ | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
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CARTESIAN GROWTH CORPORATION III
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| | | | | | |
| | For the Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
General and administrative costs | | $ | | | $ | |
Loss from operations | | | ( | | | ( |
| | | | | | |
Other income: | | | | | | |
Interest earned on investments held in Trust Account | | | | | | — |
Other income | | | | | | — |
| | | | | | |
Net income (loss) | | $ | | | $ | ( |
| | | | | | |
Basic weighted average shares outstanding, Class A ordinary shares subject to redemption | | | | | | — |
| | | | | | |
Basic and diluted net income (loss) per share, Class A ordinary shares subject to redemption | | $ | | | $ | — |
| | | | | | |
Basic and diluted weighted average shares outstanding, Class B ordinary shares | | | | |
| |
| | | | | | |
Basic and diluted net income (loss) per share, Class B ordinary shares | | $ | | | $ | ( |
The accompanying notes are an integral part of these unaudited condensed financial statements.
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CARTESIAN GROWTH CORPORATION III
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2026
| | | | | | | | | | | | | | |
| | Class B | | Additional | | | | | Total | |||||
| | Ordinary Shares | | Paid-in | | Accumulated | | Shareholders’ | ||||||
| | Shares | | Amount | | Capital | | Deficit | | Deficit | ||||
Balance – December 31, 2025 | | | | $ | | | $ | — | | $ | ( | | $ | ( |
| | | | | | | | | | | | | | |
Remeasurement of Class A ordinary shares to redemption amount | | — | | | — | | | — | | | ( | | | ( |
| | | | | | | | | | | | | | |
Net income | | — | | | — | | | — | | | | | | |
| | | | | | | | | | | | | | |
Balance – March 31, 2026 | | | | $ | | | $ | — | | $ | ( | | $ | ( |
FOR THE THREE MONTHS ENDED MARCH 31, 2025
| | | | | | | | | | | | | | |
| | Class B | | Additional | | | | | Total | |||||
| | Ordinary Shares | | Paid-in | | Accumulated | | Shareholders’ | ||||||
| | Shares | | Amount | | Capital | | Deficit | | Deficit | ||||
Balance – January 1, 2025(1)(2) | | | | $ | | | $ | | | $ | ( | | $ | ( |
| | | | | | | | | | | | | | |
Net loss | | — | | | — | | | — | | | ( | | | ( |
| | | | | | | | | | | | | | |
Balance – March 31, 2025(1)(2) | | | | $ | | | $ | | | $ | ( | | $ | ( |
| (1) | On May 1, 2025, pursuant to a share recapitalization, the Company issued an additional |
| (2) | Includes an aggregate of up to |
The accompanying notes are an integral part of these unaudited condensed financial statements.
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CARTESIAN GROWTH CORPORATION III
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Cash Flows from Operating Activities: | | | | | | |
Net income (loss) | | $ | | | $ | ( |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |
| | |
| |
Payment of operation costs through promissory note | |
| — | |
| |
Interest earned on marketable securities held in Trust Account | | | ( | | | — |
Changes in operating assets and liabilities: | | | | | | |
Prepaid expenses | | | | | | — |
Long term prepaid insurance | | | | | | — |
Accrued expenses | | | | | | — |
Net cash used in operating activities | |
| ( | |
| — |
| | | | | | |
Cash Flows from Investing Activities: | | | | | | |
Net cash used in investing activities | | | — | | | — |
| | | | | | |
Cash Flows from Financing Activities: | | | | | | |
Net cash used in financing activities | | | — | | | — |
| | | | | | |
Net Change in Cash | |
| ( | |
| — |
Cash - Beginning of period | |
| | |
| — |
Cash - End of period | | $ | | | $ | — |
| | | | | | |
Non-Cash investing and financing activities: | |
| | |
| |
Prepaid services contributed by Sponsor through promissory note – related party | | $ | — | | $ | — |
Remeasurement of Class A ordinary shares to redemption value | | | | | | — |
Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares | | | — | | | — |
Deferred costs included in accrued offering costs | | | — | | | |
Deferred offering costs paid through promissory note – related party | | | — | | | |
Deferred offering costs applied to prepaid expense | | | — | | | |
Deferred underwriting fee payable | | | — | | | — |
The accompanying notes are an integral part of these unaudited condensed financial statements.
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Cartesian Growth Corporation III (the “Company”) is a blank check company incorporated as a Cayman Islands exempted corporation on October 29, 2024. The Company was incorporated for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (the “Business Combination”). Prior to the consummation of its initial public offering (“Initial Public Offering”), the Company had not, nor had anyone on its behalf, engaged in any substantive discussions, directly or indirectly, with any Business Combination target with respect to an initial Business Combination with the Company.
As of March 31, 2026, the Company has not commenced any operations. All activity for the period from October 29, 2024 (inception) through March 31, 2026 relates to the Company’s formation and the Initial Public Offering, which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. Subsequent to the Initial Public Offering, the Company generates non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering, which have been placed in the Trust Account (as defined below). The Company has selected December 31 as its fiscal year end.
The Company’s Sponsor is CGC III Sponsor LLC (the “Sponsor”). The registration statements for the Company’s Initial Public Offering became effective on May 1, 2025. On May 5, 2025, the Company consummated the Initial Public Offering of
Transaction costs amounted to $
The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least
Following the closing of the Initial Public Offering on May 5, 2025, an amount of $
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
bank. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the proceeds from the Initial Public Offering and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (i) the completion of the Company’s initial Business Combination, (ii) the redemption of the Company’s public shares if the Company is unable to complete the initial Business Combination within 24 months from the closing of the Initial Public Offering, or by such earlier date as the Company’s board of directors may approve, or such other time period in which the Company must complete an initial Business Combination pursuant to an amendment to the Company’s amended and restated memorandum and articles of association (the “Articles”) approved by the Company’s shareholders (the “Completion Window”), subject to applicable law, or (iii) the redemption of the Company’s public shares properly submitted in connection with a shareholder vote to amend the Articles to (A) modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem
The Company will provide the Company’s public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination either (i) in connection with a general meeting called to approve the initial Business Combination or (ii) without a shareholder vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed initial Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled to redeem their shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account (less taxes payable, but without deduction for any excise or similar tax that may be due or payable), divided by the number of then-outstanding public shares. The amount in the Trust Account is initially anticipated to be $
The ordinary shares subject to redemption were recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.”
The Company will have only the duration of the Completion Window to complete the initial Business Combination. However, if the Company is unable to complete its initial Business Combination within the Completion Window, the Company will as promptly as reasonably possible but not more than ten business days thereafter, 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 interest earned on the funds held in the Trust Account (less taxes payable, but without deduction for any excise or similar tax that may be due or payable, and less up to $
The Sponsor, CGC III Sponsor DirectorCo LLC (“DirectorCo”), and the Company’s officers and directors have entered into letter agreements with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to the Articles; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete the initial Business Combination within the Completion Window, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within the Completion Window and to liquidating distributions from assets outside the Trust Account; and (iv) vote any founder shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions, aside from shares they may purchase in compliance with the requirements of Rule 14e-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would not be voted in favor of approving the Business Combination) in favor of the initial Business Combination.
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company (except for the Company’s independent registered public accounting firm), or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance 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 U.S. Securities and Exchange Commission (“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 complete 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 accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 23, 2026. The interim results for the three months ended March 31, 2026 and 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future periods.
Liquidity and Capital Resources and Going Concern
The Company’s liquidity needs up to March 31, 2026 had been satisfied through the loan from the Sponsor under an unsecured promissory note (the “Sponsor Promissory Note”) of up to $
In order to fund 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. Up to $
In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Codification (“ASC”) 205-40, “Presentation of Financial Statements - Going Concern,” management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Completion Window.
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Segment Reporting
The Company complies with ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses among other disclosure requirements. The Company adopted ASU 2023-07 on January 1, 2024. The amendments will be applied retrospectively to all prior periods presented in the accompanying unaudited condensed financial statements (see Note 9).
Emerging Growth Company Status
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 auditor 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 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 financial statement 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 the unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses 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, the actual results could differ significantly 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. The Company had $
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Investments Held in Trust Account
As of March 31, 2026 and December 31, 2025, the assets held in the Trust Account, amounting to $
Investments held in the Trust Account are presented at fair value at each condensed balance sheet date, with unrealized gains and losses resulting from changes in fair value included in earnings as a component of interest and dividend income earned on investments held in the Trust Account in the accompanying statements of operations.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.
Offering Costs
The Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between Class A ordinary shares and warrants, using the relative fair value method by allocating Initial Public Offering proceeds first to assigned value of the warrants and then to the Class A ordinary shares. Offering costs allocated to the Class A ordinary shares were charged to temporary equity and offering costs allocated to the public warrants and Private Placement Warrants were charged to shareholder’s deficit as public warrants and Private Placement Warrants after management’s evaluation were accounted for under equity treatment.
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 Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets, primarily due to its short-term nature.
Income Taxes
The Company accounts for income taxes under ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 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 March 31, 2026 and December 31, 2025, there were
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
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 or the United States. As such, the Company’s tax provision was
Class A Ordinary Shares Subject to Possible Redemption
The public shares 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 or tender offer in connection with the Company’s initial Business Combination. In accordance with ASC 480-10-S99, the Company classifies public shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and then to accumulated deficit. Accordingly, as of March 31, 2026 and December 31, 2025, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed balance sheets. As of March 31, 2026 and December 31, 2025, the Class A ordinary shares subject to possible redemption reflected in the condensed balance sheets are reconciled in the following table:
| | | |
Gross proceeds | | $ | |
Less: |
| | |
Proceeds allocated to public warrants |
| | ( |
Class A ordinary shares issuance cost |
| | ( |
Plus: | | | |
Remeasurement of carrying value to redemption value |
| | |
Class A ordinary shares subject to possible redemption, December 31, 2025 | | $ | |
Plus: | | | |
Remeasurement of carrying value to redemption value | | | |
Class A ordinary shares subject to possible redemption, March 31, 2026 | | $ | |
Warrant Instruments
The Company accounted for the public warrants and Private Placement Warrants issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in FASB ASC Topic 815, “Derivatives and Hedging”. Accordingly, the Company evaluated and classified the warrant instruments under equity treatment at their assigned values.
Net Income (Loss) per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of shares of ordinary shares outstanding for the period. The Company has two classes of ordinary shares, which are referred to as redeemable Class A ordinary shares and non-redeemable Class A and Class B ordinary shares. Remeasurement associated with the redeemable shares of Class A ordinary shares is excluded from income (loss) per ordinary share as the redemption value approximates fair value.
The calculation of diluted income (loss) per ordinary share does not consider the effect of the warrants issued in connection with the Initial Public Offering and the Private Placement Warrants since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts):
| | | | | | | | | | | | |
| | For the Three Months Ended March 31, | ||||||||||
| | 2026 | | 2025 | ||||||||
| | | | | Non- | | | | | Non- | ||
| | Redeemable | | redeemable | | Redeemable | | redeemable | ||||
| | Class A | | Class B | | Class A | | Class B | ||||
Basic and diluted net income (loss) per ordinary share | | | | | | | | | | | | |
Numerator: |
| | |
| | |
| | |
| | |
Allocation of net income (loss) | | $ | | | $ | | | $ | — | | $ | ( |
Denominator: | |
| | |
| | |
| | |
| |
Basic and diluted weighted average shares outstanding | |
| | |
| | |
| — | |
| |
Basic and diluted net income (loss) per ordinary share | | $ | | | $ | | | $ | — | | $ | ( |
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statement.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering on May 5, 2025, the Company sold
Warrants — As of March 31, 2026 and December 31, 2025, there were
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a Unit containing such warrant will have paid the full purchase price for the Unit solely for the Class A ordinary share underlying such Unit.
Under the terms of the warrant agreement, the Company has agreed that, as soon as practicable, but in no event later than
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (
If the holders exercise their public warrants on a cashless basis, they would pay the warrant exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” of the Class A ordinary shares over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the average closing price of the Class A ordinary shares for the
Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | upon a minimum of |
| ● | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ |
In addition, if (x) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial Business Combination at an issue price or effective issue price of less than $
Additionally, if the number of outstanding Class A ordinary shares is increased by a share capitalization payable in Class A ordinary shares, or by a subdivision of ordinary shares or other similar event, then, on the effective date of such share capitalization, subdivision or similar event, the number of Class A ordinary shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding ordinary shares. A rights offering made to all or substantially all holders of ordinary shares entitling holders to purchase Class A ordinary shares at a price less than the fair market value will be deemed a share capitalization of a number of Class A ordinary shares equal to the product of (i) the number of Class A ordinary shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A ordinary shares) and (ii) the quotient of (x) the price per Class A ordinary share paid in such rights offering and (y) the fair market value. For these purposes (i) if
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
the rights offering is for securities convertible into or exercisable for Class A ordinary shares, in determining the price payable for Class A ordinary shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of Class A ordinary shares as reported during the ten (
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering on May 5, 2025, the Sponsor and Cantor purchased an aggregate of
The Private Placement Warrants are identical to the public warrants sold in the Initial Public Offering except that, so long as they are held by the Sponsor, Cantor, or their permitted transferees, the Private Placement Warrants (i) may not (including the Class A ordinary shares issuable upon exercise of these Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until
The Sponsor, DirectorCo, and the Company’s officers and directors have entered into letter agreements with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to the Articles (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On November 12, 2024, the Sponsor and DirectorCo made a capital contribution of an aggregate of $
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
The Company’s initial shareholders have agreed not to transfer, assign or sell any of their founder shares and any Class A ordinary shares issued upon conversion thereof until the earlier to occur of (i)
Promissory Note — Related Party
The Sponsor had agreed to loan the Company an aggregate of up to $
Administrative Services Agreement
Commencing on May 1, 2025, the effective date of the registration statements for the Initial Public Offering, the Company entered into an agreement with the Sponsor to pay an aggregate of $
Related Party Loans
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. If the Company completes a Business Combination, the Company would repay the Working Capital Loans. In the event that a Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $
NOTE 6. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
The United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing global conflicts in the Middle East, Europe, and Latin America. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyberattacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.
On July 4, 2025, the U.S. government enacted tax reform, commonly referred to as the One Big Beautiful Bill Act (“OBBB”). OBBB amends U.S. tax law, including provisions related to bonus depreciation, interest expense limitation, research and development, global intangible low-taxed income, foreign derived intangible income and base erosion and anti-abuse tax. The Company evaluated
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
the provisions of the OBBB and determined that adoption of the new law did not have a material impact on its unaudited condensed financial statements or related disclosures.
Any of the above mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions, could adversely affect the Company’s search for an initial Business Combination and any target business with which the Company may ultimately consummate an initial Business Combination.
Registration Rights
The holders of the founder shares (and the Class A ordinary shares issuable upon conversion of the founder shares), Private Placement Warrants (and the Class A ordinary shares underlying such Private Placement Warrants), and private placement equivalent-warrants that may be issued upon conversion of the Working Capital Loans have registration rights to require the Company to register a sale of any of the Company’s securities held by them and any other securities of the Company acquired by them prior to the consummation of the initial Business Combination pursuant to a registration rights agreement signed on May 1, 2025, the effective date of the registration statements for the Initial Public Offering. The holders of these securities are entitled to make up to
Underwriting Agreement
The Company granted the underwriters a
The underwriters were entitled to a cash underwriting discount of $
Additionally, the underwriters are entitled to a deferred underwriting discount of
On December 17, 2025, the Company entered into a Fee Modification Agreement with Cantor in connection with its contemplated business combination with Factorial Inc., pursuant to which Cantor agreed to modify the previously agreed $
Business Combination Agreement
On December 17, 2025, the Company, Fenway MS, Inc., a Delaware corporation (“Merger Sub”), and Factorial Inc., a Delaware corporation (“Factorial”), entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”). The Business Combination Agreement and the transactions contemplated thereby (the “Business Combination”) were unanimously approved by the boards of directors and special committees comprised of independent and disinterested members of the boards of directors of each of the Company and Factorial. The Business
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Combination is expected to close in mid-2026, following the receipt of the requisite approvals of the Company’s shareholders and Factorial stockholders and the fulfillment of other customary closing conditions.
Amendment to Business Combination Agreement
On March 26, 2026, the Company, Merger Sub and Factorial entered into an Amendment to the Business Combination Agreement (the “BCA Amendment”). The BCA Amendment, among other things, (A) amends the sixth paragraph of the Preamble and inserts a new clause (a) into Section 2.1 of the Business Combination Agreement to provide that the redemption of the Company’s shares in connection with the Closing of the Business Combination (the “Shareholder Redemption”) shall occur at least one day prior to the Domestication, thereby clarifying the timing and sequencing of the Shareholder Redemption relative to the Domestication; (B) amends certain definitions, including the definition of “Ancillary Documents” to remove references to the “CGC Private Warrant Exchange Agreement”, the definition of “Company Convertible Notes” to mean any convertible note or other equity-linked debt instrument convertible into Equity Securities of the Company or any of its subsidiaries outstanding as of the Merger Effective Time; (C) amends clause (b)(iii) of Section 5.8 of the Business Combination Agreement to bifurcate the previously singular “Nasdaq Proposal” into two distinct proposals to be submitted to the Company’s shareholders for approval: (i) the adoption and approval of the issuance of shares in connection with the transactions contemplated by the Business Combination Agreement and (ii) the adoption and approval of the issuance of shares in connection with the PIPE Financing (as defined below), and consequently update the definition of “Nasdaq Proposal” to read “Nasdaq Proposals;” and (D) amend and restate Sections 5.21 and 5.22 of the Business Combination Agreement to remove the provisions related to an exchange of the Company’s Public Warrants and Private Placement Warrants (the “Warrant Exchange”).
Sponsor Support Agreement
Concurrently with the execution of the Business Combination Agreement, the Company, Sponsor and Factorial entered into the Sponsor Support Agreement (the “Sponsor Support Agreement”), pursuant to which the Sponsor, as a holder of the Company’s Class B ordinary shares (the “Sponsor Shares”), has agreed to, among other things, (i) vote in favor of the Business Combination Agreement and the Business Combination, (ii) waive any adjustment to the conversion ratio set forth in the governing documents of the Company or any other anti-dilution or similar protection with respect to the Class B ordinary shares (whether resulting from the transactions contemplated by the Business Combination Agreement or otherwise), (iii) be bound by certain other covenants and agreements related to the Business Combination, (iv) be bound by certain transfer restrictions with respect to its shares in the Company prior to the closing of the Business Combination, (v) be subject to certain transfer restrictions provided in the bylaws to of New Factorial become effective at the closing of the Business Combination, and (vi) waive redemption rights with respect to the Sponsor Shares, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.
On March 26, 2026, Sponsor and Factorial entered into an Amendment to the Sponsor Support Agreement (the “SSA Amendment”). The SSA Amendment (a) deletes the provision in Section 1 of the Sponsor Support Agreement that required the Sponsor, until the closing of the Business Combination or the earlier termination of the Business Combination Agreement, to cause all of its Private Placement Warrants to be present for quorum purposes at any meeting or written consent of the Company warrant holders and to vote or consent such warrants in favor of the warrant agreement amendment contemplated by the Warrant Exchange; and (b) amends and restates Section 2 of the Sponsor Support Agreement in its entirety to read “[Reserved.],” thereby removing the provisions relating to the Warrant Exchange.
PIPE Financing
Concurrently with the execution of the Business Combination Agreement, the Company entered into a Stock Purchase Agreement (the “Sponsor Stock Purchase Agreement”) with an affiliate of the Sponsor (the “Sponsor Investor”) and a Stock Purchase Agreement (the “Institutional Investor Stock Purchase Agreement,” and together with the Sponsor Stock Purchase Agreement, “Investor Stock Purchase Agreements”) with a certain institutional investor (the “Institutional Investor,” and together with the Sponsor Investor, the “PIPE Investors”).
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Pursuant to the Investor Stock Purchase Agreements, the PIPE Investors agreed to subscribe for and purchase, and the Company agreed to issue and sell to the PIPE Investors, at the closing of the Business Combination, an aggregate of
Registration Rights Agreement
In connection with the closing of the Business Combination, New Factorial (the resulting post-Closing entity, “New Factorial”), Sponsor, Cantor and certain stockholders of Factorial will enter into an amended and restated registration rights agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, among other things, New Factorial will agree that, within
NOTE 7. SHAREHOLDERS’ DEFICIT
Preference Shares — The Company is authorized to issue a total of
Class A Ordinary Shares — The Company is authorized to issue a total of
Class B Ordinary Shares — The Company is authorized to issue a total of
The founder shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of the initial Business Combination or earlier at the option of the holder on a
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
Offering (including any Class A ordinary shares issued pursuant to the underwriters’ over-allotment option and excluding the Class A ordinary shares underlying the Private Placement Warrants), plus (ii) all Class A ordinary shares and equity-linked securities issued or deemed issued, in connection with the closing of the initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination and any private placement-equivalent warrants issued to the Sponsor or any of its affiliates or to the Company’s officers or directors upon conversion of Working Capital Loans) minus (iii) any redemptions of Class A ordinary shares; by public shareholders in connection with an initial business combination; provided that such conversion of founder shares will never occur on a less than one-for-one basis.
Holders of record of the Company’s Class A ordinary shares and Class B ordinary shares are entitled to
Holders of record of the Company’s Class A ordinary shares and Class B ordinary shares are entitled to
NOTE 8. FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
Level 3: | Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability. |
| | | | | | | | |
| | Level | | March 31, 2026 | | December 31, 2025 | ||
Investments held in Trust Account |
| 1 | | $ | | | $ | |
The fair value of the public warrants at issuance was $
The following table presents the quantitative information regarding market assumptions used in the valuation of the public and private warrants
| | | | |
| | May 5, 2025 |
| |
Volatility |
| | | % |
Risk free rate |
| | | % |
Market implied likelihood of completing a Business Combination |
| | | % |
Share price | | $ | | |
Weighted terms (Yrs) | |
| | |
The market implied likelihood of completing a Business Combination was determined by analyzing the quoted market prices of the rights for similar companies that included rights in their units. The criteria used was:
| | | | |
Criteria | | Low | | High |
IPO proceeds ($M) | | | | |
Warrant coverage |
| — |
| |
Rights coverage (per unit) |
| |
| |
Remaining months to complete |
|
|
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CARTESIAN GROWTH CORPORATION III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2026
(Unaudited)
NOTE 9. SEGMENT INFORMATION
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s CODM, or group, in deciding how to allocate resources and assess performance.
The Company’s CODM has been identified as the Chief Financial Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has
The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss. The measure of segment assets is reported on the condensed balance sheets as total assets. When evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:
| | | | | | |
| | March 31, 2026 | | December 31, 2025 | ||
Cash | | $ | | | $ | |
Investments held in Trust Account | | $ | | | $ | |
| | | | | | |
| | For the Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
General and administrative costs | | $ | | | $ | |
Interest earned on investments held in Trust Account | | $ | | | $ | — |
General and administrative costs are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination or similar transaction within the Completion Window. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative costs are the significant segment expenses provided to the CODM on a regular basis.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date and through the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
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PART II
INFORMATION NOT REQUIRED IN DOCUMENT
Item 20. Indemnification of Officers And Directors
Subsection (a) of Section 145 of the DGCL empowers a corporation to indemnify any person who was or is a party or who is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person acted in any of the capacities set forth above, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Section 145 further provides that to the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in subsections (a) and (b) of Section 145, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith; that indemnification provided for by Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; and the indemnification provided for by Section 145 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of such person’s heirs, executors and administrators. Section 145 also empowers the corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify such person against such liabilities under Section 145.
Section 102(b)(7) of the DGCL provides that a corporation’s certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit.
Additionally, our certificate of incorporation limits the liability of our directors and officers to the fullest extent permitted by the DGCL, and our bylaws provide that we will indemnify them to the fullest extent permitted by such law. We have entered into and expect to continue to enter into agreements to indemnify our directors, executive officers and other employees as determined by our board of directors. Under the terms of such indemnification agreements, we are required to indemnify each of our directors and officers, to the fullest extent permitted by the laws of the state of Delaware, if the basis of the indemnitee’s involvement was by reason of the fact that the indemnitee is or was our director or officer or was serving at our request in an official capacity for another entity. We must indemnify our officers and directors against all direct and indirect costs, fees and expenses of any type or nature whatsoever, including all other disbursements, obligations or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be witness in, settlement or appeal of, or otherwise
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participating in any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding. The indemnification agreements also require us to advance, to the extent not prohibited by law, all direct and indirect costs, fees and expenses that such director or officer incurred, provided that such person will return any such advance if it is ultimately determined that such person is not entitled to indemnification by us. Any claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
Item 21. Exhibits And Financial Statement Schedules
| | |
Exhibit No. | | Description of Document |
3.1 | | Certificate of Incorporation of Factorial Energy Inc. (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on June 10, 2026). |
3.2 | | Bylaws of Factorial Energy Inc. (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on June 10, 2026). |
5.1* | | Opinion of Goodwin Procter LLP. |
23.1* | | Consent of CBIZ CPAs P.C. |
23.2* | | Consent of RSM US LLP. |
23.3* | | Consent of Goodwin Procter LLP (included in Exhibit 5.1). |
24.1* | | Power of Attorney (included on the signature pages hereto). |
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). |
*Filed herewith.
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Item 22. Undertakings
| 1. | The undersigned Registrant hereby undertakes: |
| (a) | To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: |
| (i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; |
| (b) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (c) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (d) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
| (e) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
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| 2. | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. |
| 3. | The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form. |
| 4. | The registrant undertakes that every prospectus: (1) that is filed pursuant to the immediately preceding paragraph, or (2) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| 5. | The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first Class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of this Registration Statement through the date of responding to the request. |
6. | The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning this transaction that was not the subject of and included in this Registration Statement when it became effective. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Post-Effective Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Billerica, Commonwealth of Massachusetts, on the 10th day of June, 2026.
| | |
Date: June 10, 2026 | FACTORIAL ENERGY INC. | |
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| By: | /s/ Siyu Huang |
| Name: | Siyu Huang |
| Title: | Co-founder, Chief Executive Officer and Director |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Siyu Huang, Richard Wei and Jason Duva, and each or any of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Post-Effective Amendment No. 1 to the Registration Statement has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
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Signature | | Title | | Date |
| | | | |
/s/ Siyu Huang | | Co-founder, Chief Executive Officer and Director | | June 10, 2026 |
Siyu Huang | | (Principal Executive Officer) | | |
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/s/ Richard Wei | | Chief Financial Officer | | June 10, 2026 |
Richard Wei | | (Principal Financial Officer) | | |
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/s/ Jay Scuteri | | VP, Finance | | June 10, 2026 |
Jay Scuteri | | (Principal Accounting Officer) | | |
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/s/ Alex Yu | | Co-Founder, Chief Technical Officer and Director | | June 10, 2026 |
Alex Yu | | | | |
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/s/ Joseph M. Taylor | | Executive Chairperson | | June 10, 2026 |
Joseph M. Taylor | | | | |
| | | | |
/s/ Uwe Keller | | Director | | June 10, 2026 |
Uwe Keller | | | | |
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/s/ Liad Meidar | | Director | | June 10, 2026 |
Liad Meidar | | | | |
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/s/ Dieter Zetsche | | Director | | June 10, 2026 |
Dieter Zetsche | | | | |
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/s/ Jon Nelson | | Director | | June 10, 2026 |
Jon Nelson | | | | |
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