10-Q: Alchemy Investments Acquisition Corp 1 Q1 2026 Update

Alchemy Investments Acquisition Corp 1 reports on its financial condition and progress towards a business combination for the quarter ended March 31, 2026.

Summary

• Alchemy Investments Acquisition Corp 1 (ALCY) is a blank check company focused on a business combination. As of March 31, 2026, the company had $86,243 in cash and cash equivalents outside of its trust account, with a working capital deficit of $3,910,143.
• The company incurred operating costs of $362,994 for the three months ended March 31, 2026, resulting in a net loss of $331,900. This loss was partially offset by gains on investments held in the trust account ($77,816) and dividend income ($731), while incurring related party interest expense ($47,453).
• Significant progress has been made towards a business combination, with an agreement signed on August 22, 2025, to merge with Cartiga, LLC. The transaction involves a domestication to Delaware and a merger, creating a combined entity named Cartiga Holdings, Inc. operating under an Up-C structure.
• The company has extended its deadline to complete a business combination multiple times, with the current extended date set for September 9, 2026. This extension requires monthly deposits into the trust account.
• A material weakness in internal control over financial reporting was identified related to the completeness and timely recording of accrued vendor expenses and other accrued liabilities.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as having a negative sentiment due to the material weakness in internal controls, the company's going concern issues, and the delisting from Nasdaq, despite progress on the business combination.

Positives

• The company has entered into a definitive business combination agreement with Cartiga, LLC, outlining a path to becoming a publicly traded entity.
• The business combination structure is an Up-C, which allows existing equity holders of Cartiga to retain their equity in a tax-efficient manner.
• The company has secured extensions to its business combination deadline, currently set for September 9, 2026, indicating continued efforts to find a suitable target.
• The trust account holds $8,957,232 as of March 31, 2026, providing a significant portion of the company's assets.

Negatives

• The company has a working capital deficit of $3,910,143 as of March 31, 2026.
• Substantial doubt exists about the company's ability to continue as a going concern, as cash outside the trust account may not be sufficient for at least one year.
• A material weakness in internal control over financial reporting was identified, impacting the accuracy of accrued expenses.
• The company's securities were subject to delisting from Nasdaq and are now trading on the over-the-counter market.
• The company has incurred significant operating costs ($362,994 for Q1 2026) without generating operating revenue.

Risks

• The company's ability to complete a business combination by the extended deadline of September 9, 2026, is not assured.
• If a business combination is not completed, the company will be subject to mandatory liquidation and dissolution.
• The company faces risks associated with its status as an emerging growth company, including potential differences in accounting standards.
• The armed conflict in Iran and related international trade policies could adversely affect the company's ability to consummate a business combination.
• The company's ability to make payments under the Tax Receivable Agreement depends on the ability of OpCo to make distributions to it, which could be impacted by various factors.

Future Outlook

The company's primary focus is on completing its business combination with Cartiga, LLC by September 9, 2026. The success of this combination is critical for the company's continued operations and future prospects. The company anticipates ongoing operating costs and potential future tax benefits related to the business combination structure.

Management Comments

• "The Company has incurred and expects to continue to incur significant costs in pursuit of the Companys financing and acquisition plans."
• "The Company anticipates that the cash held outside of the Trust Account as of March 31, 2026 will not be sufficient to allow the Company to operate for at least one year from the date these unaudited condensed financial statements are issued, and therefore substantial doubt about the Companys ability to continue as a going concern exists."
• "Management plans to address this uncertainty with the successful closing of a Business Combination."
• "The Company is now trading its securities on the over-the-counter market on May 14, 2026."

Industry Context

StockSavvy.ai notes that Alchemy Investments Acquisition Corp 1 operates within the Special Purpose Acquisition Company (SPAC) sector, which has seen increased regulatory scrutiny and market volatility. The company's progress towards a business combination with Cartiga, LLC, and its subsequent trading on the OTC market, reflect broader trends impacting SPACs seeking to complete their initial business combinations.

Comparison to Industry Standards

• As a SPAC, direct comparison to traditional operating companies is not applicable. However, the SPAC industry standard for completing a business combination within the initial 18-24 month period has been challenged, with many SPACs requiring extensions, as seen with Alchemy Investments Acquisition Corp 1's multiple extensions up to September 9, 2026.
• The Up-C structure adopted for the Cartiga merger is a common strategy for SPACs merging with private companies to offer tax advantages to existing owners, aligning with industry best practices for such transactions.
• The delisting from Nasdaq and subsequent trading on the OTC market is a negative development, but not entirely uncommon for SPACs facing challenges in completing their business combinations or meeting listing requirements.

Corporate Governance

Related Party Transactions

• Promissory notes from the Sponsor (Alchemy DeepTech Capital LLC) totaling $2,000,000 outstanding as of March 31, 2026, with 10% annual interest.
• Monthly administrative fee of $10,000 paid to Alchemy Investment Management LLC, an affiliate of the Sponsor, for secretarial and administrative services.
• Accrued interest expenses of $209,756 related to promissory notes from the Sponsor as of March 31, 2026.
• Accrued expenses of $64,070 related to the administrative support agreement as of March 31, 2026.

Stakeholder Impact

• Shareholders: Potential dilution from future equity issuances, uncertainty regarding the completion of the business combination, and the impact of trading on the OTC market.
• Creditors: The company's going concern issues and working capital deficit may impact its ability to meet obligations.
• Management and Directors: Responsible for addressing the material weakness in internal controls and successfully completing the business combination.
• Sponsor: Has provided significant financial support through promissory notes and has waived certain redemption rights, indicating a vested interest in the business combination's success.

Next Steps

• Complete the business combination with Cartiga, LLC by September 9, 2026.
• Continue to manage operating expenses and cash burn.
• Address the material weakness in internal controls over financial reporting.
• Navigate trading on the over-the-counter market following Nasdaq delisting.

Key Dates

Recommendation

The company is in a critical phase with a pending business combination. While progress has been made with Cartiga, LLC, the delisting from Nasdaq, going concern issues, and material weakness in controls introduce significant risk. Investors should hold to monitor the outcome of the business combination and the company's ability to address its financial and operational challenges.

Keywords

SPAC, Business Combination, Alchemy Investments Acquisition Corp 1, Cartiga LLC, Form 10-Q, Quarterly Report, Trust Account, Emerging Growth Company, SEC Filing, Financial Statements