ALCY.NASDAQAlchemy Investments Acquisition CORP 1

8-K: Alchemy SPAC to Merge with Cartiga in $540M Deal

Sentiment:

Business Combination Agreement 25 August 2025 5:10 PM

📋All filings for Alchemy Investments Acquisition CORP 1

Alchemy Investments Acquisition Corp 1 has entered a definitive business combination agreement to merge with Cartiga, a litigation finance asset management platform, valuing Cartiga at $540 million.

Delay expectedThe Business Combination Agreement may be terminated if the closing has not occurred by May 1, 2026 (the Outside Date).The Company may terminate the agreement if Alchemy fails to obtain the necessary shareholder approval within 45 days after the Registration Statement becomes effective.Alchemy may terminate the agreement if the Company fails to obtain the necessary member approval within 10 days after the Registration Statement becomes effective.

Capital raiseAlchemy and Cartiga will use reasonable best efforts to obtain commitments for 'Financing' through 'Subscription Agreements' prior to closing.The closing of the transaction is subject to a minimum cash condition of $40,000,000 in 'Available Closing Buyer Cash'.If the 'Available Closing Buyer Cash' is less than $40,000,000 and Cartiga waives the minimum cash condition, the Sponsor (Alchemy DeepTech Capital LLC) will forfeit a portion of its shares in the combined company based on a tiered schedule.

Summary

Alchemy Investments Acquisition Corp 1 (ALCY), a SPAC, has entered into a definitive business combination agreement with Cartiga, LLC.
The transaction values Cartiga at an Equity Value of $540,000,000.
ALCY will re-domicile from the Cayman Islands to Delaware, merging into Alchemy Acquisition Holdings, Inc. (Pubco), which will then be renamed Cartiga Holdings, Inc.
Alchemy Merger Sub, LLC (Newco) will merge into Cartiga, with Cartiga surviving as OpCo, a wholly-owned subsidiary of Pubco.
The combined company will operate under an umbrella partnership C corporation (Up-C) structure, with Pubco as the publicly traded reporting company.
Existing ALCY Class A Ordinary Shares, Class B Ordinary Shares, Preference Shares, Units, and Warrants will convert into equivalent Pubco securities.
Cartiga's core business lines include Consumer Pre-Settlement Advances, Law Firm Lending and Receivables Financing, and Litigation and Legal Receivables Asset-Based Lending.
A Tax Receivable Agreement (TRA) will be implemented, where Pubco pays TRA Holders 85% of cash tax benefits from Basis Adjustments and Imputed Interest.
Lock-up agreements will apply to certain Pubco Class B Common Stock and OpCo Units for six months post-closing, with an early release if Pubco Class A Common Stock reaches $12.00 for 20 trading days within a 30-trading day period after 150 days post-closing.
The transaction is subject to customary closing conditions, including shareholder and member approvals, regulatory approvals (HSR Act), and a minimum cash condition of $40,000,000.

Sentiment

Score: 8

Explanation: The filing announces a definitive business combination with strong strategic rationale, highlighting Cartiga's established market position, technology investments, and significant market opportunity. Management comments are highly positive, focusing on growth acceleration and market penetration. While risks are disclosed, they are standard for such transactions, and no immediate negative financial impacts are reported.

Positives

Cartiga boasts a 20+ year investment track record in the legal sector.
The company utilizes a proprietary database of over 250,000 individual litigation-linked asset fundings, diversified across more than 8,000 unique lawyers and law firms.
Cartiga has invested over $20 million in IT and product development since 2020, indicating a strong commitment to technology and data-driven operations.
The business combination is expected to position Cartiga to leverage public currency to drive growth and pursue strategic acquisition opportunities.
Accessing the public markets is anticipated to accelerate growth, expand Cartiga's product suite, and deepen its capital and service-based partnerships with law firms.
The legal services sector is identified as a large, underpenetrated market ($300bn+ representing ~1.4% GDP), offering significant growth potential for Cartiga.

Risks

The occurrence of any event, change, or other circumstances that could lead to the termination of the Business Combination Agreement.
The outcome of any legal proceedings that may be instituted against Alchemy or Cartiga following the announcement of the Business Combination.
The inability to complete the proposed Business Combination due to failure to obtain necessary approvals (shareholder, member, regulatory) or satisfy other closing conditions.
Failure to meet the minimum cash requirement of $40,000,000, potentially leading to forfeiture of a portion of the Sponsor's shares.
Inability to obtain or maintain the listing of securities on Nasdaq following the proposed Business Combination.
The risk that the proposed Business Combination disrupts current plans and operations.
The ability to recognize the anticipated benefits of the proposed Business Combination may be affected by competition, Cartiga's ability to manage growth profitably, and retention of key employees.
Costs related to the proposed Business Combination.
Changes in applicable laws or regulations.
The possibility that Alchemy or Cartiga may be adversely affected by other economic, business, and/or competitive factors.
Risks relating to the uncertainty of the projected financial information with respect to Pubco.
Risks related to the organic and inorganic growth of Cartiga's business and the timing of expected business milestones.
The amount of redemption requests made by Alchemy's shareholders.
Payments under the Tax Receivable Agreement (TRA) could be substantial and may exceed 85% of actual cash tax savings upon acceleration, negatively impacting liquidity.
Pubco's ability to make payments under the TRA depends on OpCo's ability to make distributions to it.
The IRS or other tax authorities may challenge tax basis adjustments or other tax attributes subject to the TRA.
The Company could be classified as a publicly traded partnership under Section 7704 of the Code if Exchanges are not managed carefully, leading to adverse tax consequences.

Future Outlook

The business combination is strategically designed to leverage Cartiga's existing data platform and market distribution capabilities to accelerate growth, expand its product offerings, and strengthen its capital and service-based partnerships with law firms. The combined entity aims to capitalize on significant opportunities within the legal services sector, which is currently a large and underpenetrated market.

Management Comments

Mr. Mattia Tomba, Co-CEO of Alchemy, stated, 'At Alchemy, we specialize in unlocking under-explored private-credit opportunities and delivering capital solutions that help companies scale and, when appropriate, access the public markets. We believe Cartiga is exceptionally well situated to capitalize on growing opportunities to invest in the legal services sector, a $300bn+ market representing ~1.4% GDP which has historically been underpenetrated by traditional sources of capital. We look forward to supporting Cartiga as it pursues its next phase as a public company.'
Mr. Sam Wathen, CEO of Cartiga, remarked, 'Accessing the public markets in partnership with Alchemy will position us to leverage our data platform and market distribution to accelerate growth, expand our product suite, and deepen our capital and service-based partnerships with law firms.'

Industry Context

This announcement highlights a strategic move into the legal services sector, identified as a substantial $300 billion+ market that has historically seen limited penetration by traditional capital sources. Cartiga's data-driven, tech-forward asset management platform is positioned to capitalize on this opportunity, aligning with broader trends of financial innovation and technology adoption in specialized, underserved markets.

Comparison to Industry Standards

The filing emphasizes Cartiga's 20+ years of investment experience and its deployment of over $1.6 billion in legal sector investments, which are strong internal indicators of its established presence and operational scale within the litigation finance industry.
Cartiga's participation in matters generating in excess of $20 billion in estimated settlement values for affiliated law firms and clients demonstrates a significant impact and successful track record in its niche, though direct comparisons to industry peers' specific metrics are not provided.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
President and Chief Executive Officer	NA	Samuel Wathen	Closing Date	Business Combination
Executive Vice President, Chief Financial Officer	NA	Michael Bogansky	Closing Date	Business Combination
Executive Vice President, Head of Commercial Funding	NA	James Brady	Closing Date	Business Combination
Executive Vice President, General Counsel & Corporate Secretary	NA	Ryan Melcher	Closing Date	Business Combination
Officers of ALCY and Pubco	All existing officers	NA	Closing Date	Resignation as part of Business Combination
Board of Directors	NA	Up to seven directors (six designated by Cartiga, one by Alchemy DeepTech Capital, LLC)	Immediately following Closing	Restructuring as part of Business Combination

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Domestication	Alchemy Investments Acquisition Corp 1 will re-domicile from the Cayman Islands to Delaware by merging with Alchemy Acquisition Holdings, Inc. (Pubco), which will survive and change its name to Cartiga Holdings, Inc.	Prior to Merger	Changes the legal jurisdiction and corporate identity of the SPAC, establishing the new public entity in Delaware.
Merger Structure	Cartiga, LLC will become OpCo, a wholly-owned subsidiary of Pubco, organized in an umbrella partnership C corporation (Up-C) structure.	Closing Date	Allows existing Cartiga equity holders to retain partnership tax treatment for U.S. federal income tax purposes, while Pubco operates as a publicly traded corporation.
OpCo Management	Pubco will become the sole managing member of OpCo.	Closing Date	Centralizes operational control of Cartiga's business under the new public entity, Pubco.
Board Composition	New Cartiga's board of directors will consist of no more than seven directors, with Cartiga having the right to designate six directors and Alchemy DeepTech Capital, LLC having the right to designate one director.	Immediately following Closing	Reflects the new ownership and control structure, ensuring Cartiga's operational leadership maintains significant board representation while providing a seat for the SPAC sponsor.
Shareholder Rights	A Shareholders Agreement will be entered into, granting Melodeon LBS GP, LLC and Arizona State Retirement System (ASRS) director nomination rights based on their respective ownership levels. ASRS will also have specific approval rights for major corporate actions, including acquisitions or joint ventures exceeding 9.9% of Net Asset Value, the first underwritten public offering, a Company Sale, material divestitures or asset sales exceeding 9.9% of Net Asset Value, certain securities issuances and revenue-sharing agreements, borrowings resulting in a debt-to-equity ratio exceeding 3.5:1, initiation of bankruptcy proceedings, certain tax elections and audit settlements, non-pro rata shareholder distributions, changes to Pubco's business lines, and increases to the share limits under Pubco's incentive plan.	Closing Date	Provides significant governance influence and protective rights to key institutional investors, particularly ASRS, over strategic and financial decisions of the combined company.
Tax Receivable Agreement (TRA)	Pubco will enter into a TRA with certain Cartiga Members (TRA Holders), providing for payments of 85% of the cash tax benefits Pubco realizes from tax basis adjustments and certain other tax benefits.	Closing Date	Creates a significant financial obligation for Pubco, linking future tax savings to payments to former Cartiga equity holders, which could be substantial and impact liquidity, especially upon acceleration due to breach or change of control.
Exchange Agreement	Allows certain Cartiga Members to exchange their OpCo Units and Class B Shares for Pubco Class A Common Stock or cash, at Pubco's option.	Closing Date	Provides liquidity and a mechanism for former Cartiga equity holders to convert their interests into publicly traded stock, facilitating their exit or continued investment in the public entity.
Lock-up Agreements	Pubco Class B Common Stock and OpCo Units included in the Merger Consideration, as well as any Pubco Class A Common Stock exchanged, will be subject to a 6-month lock-up period commencing on the Closing Date, with an early release if Pubco Class A Common Stock equals or exceeds $12.00 per share for 20 trading days within a 30-trading day period commencing at least 150 days after the Closing Date.	Closing Date	Manages potential selling pressure from initial investors post-merger, aiming to stabilize the stock price during the initial public trading period.

Legal Proceedings

No material Action is pending or, to the knowledge of the Company, threatened by or against the Company or any Company Subsidiary.
No Action is pending or, to the knowledge of the Parent, threatened against the Parent, or any property or asset of the Parent.

Related Party Transactions

The Business Combination Agreement itself is a related party transaction between Alchemy (SPAC) and Cartiga.
The Tax Receivable Agreement is between Pubco and certain Cartiga Members (TRA Holders), who are related parties.
The Shareholders Agreement details governance and consent rights for Melodeon LBS GP, LLC and Arizona State Retirement System (ASRS), who are key investors and parties to the transaction.
The Investment Management Agreement is between the Company and Melodeon Capital Partners, LP (the Investment Manager), an affiliate, for asset management services.
The filing references 'Affiliate Contract' and 'Indebtedness' between the Company/Subsidiaries and current/former Affiliates, which are disclosed in Section 5.25 of the Company Disclosure Schedule.

Stakeholder Impact

**Shareholders (Alchemy)**: Will vote on the transaction, have redemption rights, and will become shareholders of the combined public entity (Cartiga Holdings, Inc.), with their existing shares converting to equivalent Pubco securities.
**Shareholders (Cartiga)**: Will receive Merger Consideration in the form of OpCo Units and Pubco Class B Common Stock, with the option to exchange for Pubco Class A Common Stock or cash, and will be subject to lock-up agreements.
**Employees (Cartiga)**: Key executives are expected to be appointed to leadership roles in the combined company, and an equity incentive plan is anticipated to align incentives.
**Sponsor (Alchemy DeepTech Capital LLC)**: Will have the right to designate one director to the new board and may forfeit a portion of its shares if the minimum cash condition for closing is not met, impacting its ownership stake.
**Melodeon LBS GP, LLC and Arizona State Retirement System (ASRS)**: Will gain significant governance influence through director nomination rights and specific approval rights for major corporate actions, ensuring their interests are protected in the combined entity.

Next Steps

Alchemy will prepare and file a Registration Statement on Form S-4, including a preliminary proxy statement/prospectus, with the SEC.
Alchemy will call an extraordinary general meeting of shareholders to vote on the Business Combination, domestication, and other related proposals.
Cartiga will seek irrevocable written consent from its members or hold a meeting for approval.
Pubco will change its name to Cartiga Holdings, Inc. upon closing.
New Cartiga's board of directors will be established with up to seven directors, six designated by Cartiga and one by Alchemy DeepTech Capital, LLC.
New executive officers for New Cartiga are expected to be appointed: Samuel Wathen (President and CEO), Michael Bogansky (EVP, CFO), James Brady (EVP, Head of Commercial Funding), and Ryan Melcher (EVP, General Counsel & Corporate Secretary).
Pubco will enter into a Tax Receivable Agreement (TRA) with certain Cartiga Members.
Pubco will enter into an Exchange Agreement with OpCo and certain Cartiga Members.
Pubco, Cartiga, Melodeon LBS GP, LLC, and Arizona State Retirement System will enter into a Shareholders Agreement.
Alchemy and Cartiga will use reasonable best efforts to approve an equity incentive plan (New Incentive Plan).
Alchemy and Cartiga will use reasonable best efforts to enter into mutually acceptable employment agreements with the CEO and other key employees.
All required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) must be completed, and waiting periods expired or terminated.
Pubco's initial listing application with Nasdaq must be conditionally approved.

Key Dates

Date	Description
2019-04-25	Cartiga, LLC was formed.
2019-08-05	The First Restated Limited Liability Company Agreement of Cartiga, LLC was adopted.
2020-03-01	Reference date for COVID-19 Response actions by the Company.
2022-01-01	Reference Date for certain Company representations and warranties.
2023-05-04	Date of Alchemy's final prospectus and the Warrant Agreement between ALCY and Continental Stock Transfer & Trust Company.
2023-10-26	Confidentiality Agreement signed between Alchemy and Cartiga.
2023-09-30	Date of Cartiga's audited consolidated balance sheet.
2024-08-05	Date related to the calculation of the Investment Management Fee Base.
2024-09-30	Date of Cartiga's audited consolidated balance sheet.
2025-03-31	Date of Cartiga's unaudited consolidated interim financial statements.
2025-06-11	Date of Newco's Certificate of Formation.
2025-08-01	Date for the list of persons employed or engaged as consultants/independent contractors by Cartiga.
2025-08-19	Business Combination Agreement unanimously approved by Alchemy's disinterested directors.
2025-08-22	Business Combination Agreement signed; earliest event reported date.
2025-08-25	Date of Report; Press Release announcing the Business Combination issued.
2026-05-01	Outside Date for the closing of the Business Combination, after which the agreement may be terminated.
TBD	Within 30 calendar days after the consummation of the Business Combination, Pubco will file a shelf registration statement for the resale of New Cartiga equity.
TBD	Within 75 calendar days following the filing date of the Registration Statement, Pubco will cause the Registration Statement to become effective.
TBD	Within 5 business days after the SEC notifies Pubco that the Registration Statement will not be reviewed or subject to further review, Pubco will cause it to become effective.
TBD	Within 30 days after the Registration Statement becomes effective, Pubco will call the Parent Shareholders Meeting.
TBD	Within 72 hours after the Registration Statement becomes effective, Cartiga will seek irrevocable written consent from its members.
TBD	Within 10 days after the Registration Statement becomes effective, if written consent is not obtained, Cartiga will call a meeting of its members.
TBD	Within 120 calendar days after the filing of Pubco's U.S. federal income Tax Return for each Taxable Year in which any Exchange is effected, Pubco will deliver an Exchange Basis Schedule.
TBD	Within 120 calendar days after the filing of Pubco's U.S. federal income Tax Return for any Taxable Year in which there is a Realized Tax Benefit or Detriment, Pubco will provide a Tax Benefit Schedule.
TBD	Within 10 calendar days after a Tax Benefit Schedule becomes final, Pubco will pay the Tax Benefit Payment.
TBD	Within 5 Business Days after an Early Termination Effective Date, Pubco will pay the Early Termination Payment.
TBD	The 15th anniversary of the effective date of each Exchange marks the Scheduled Termination Date for Tax Benefit Payments.

Recommendation

hold

The proposed business combination presents a strategic opportunity for Cartiga to access public markets and accelerate growth in a large, underpenetrated sector. The Up-C structure and Tax Receivable Agreement are designed to optimize tax benefits for existing Cartiga equity holders. However, the transaction is still subject to various closing conditions, including shareholder approvals and a minimum cash requirement, which introduce execution risk. The potential for substantial TRA payments and the tiered forfeiture of Sponsor shares based on cash levels also add complexity. A 'hold' recommendation is appropriate as investors await further details, including the S-4 filing, and monitor the progress towards closing, while acknowledging the long-term growth potential.

Keywords

SPAC, Business Combination, Merger, Cartiga, Alchemy Investments Acquisition Corp 1, Litigation Finance, Asset Management Platform, Legal Claims, Law Firm Lending, Consumer Pre-Settlement Advances, Corporate Governance, SEC Filing, Up-C Structure, Tax Receivable Agreement, Nasdaq Listing

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