10-K: Cactus Acquisition Corp. 1 Ltd. Files Annual Report

Cactus Acquisition Corp. 1 Ltd. has filed its annual report for the fiscal year ended December 31, 2025, detailing its ongoing efforts to complete a business combination with Tembo e-LV B.V. and its delisting from Nasdaq.

Summary

• Cactus Acquisition Corp. 1 Ltd. (CCTSF) filed its annual report for the fiscal year ended December 31, 2025.
• The company is actively pursuing a business combination with Tembo e-LV B.V., with a target resubmission of its Form F-4 registration statement in the second half of 2026.
• CCTSF was delisted from the Nasdaq Stock Market on November 5, 2024, due to not completing an initial business combination within 36 months, and its securities now trade on the OTC Expert Market.
• The company has extended its combination period deadline to November 2, 2026, with significant redemptions occurring during extension meetings.
• Management has identified material weaknesses in internal control over financial reporting due to insufficient finance personnel.
• The company has secured a $300,000 unsecured promissory note from TAG INTL DMCC, funded on May 26, 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the delisting from Nasdaq, material weaknesses in internal controls, and the substantial doubt about the company's ability to continue as a going concern, despite progress on the business combination.

Positives

• The company has entered into a definitive Business Combination Agreement with Tembo e-LV B.V.
• The company is actively working towards completing the business combination, targeting a resubmission of its Form F-4 registration statement.
• The company has extended its combination period to November 2, 2026, providing more time to finalize the business combination.
• The company secured a $300,000 unsecured promissory note from TAG INTL DMCC to support operations.

Negatives

• The company was delisted from the Nasdaq Stock Market and now trades on the OTC Expert Market, limiting liquidity.
• Significant redemptions by public shareholders have substantially reduced the funds in the trust account.
• The company has identified material weaknesses in internal control over financial reporting, indicating potential for misstatements.
• There is substantial doubt about the company's ability to continue as a going concern due to the impending liquidation date if a business combination is not completed.
• The company may need to secure third-party financing to complete the business combination due to reduced cash reserves.

Risks

• The ability of public shareholders to exercise redemption rights could jeopardize the completion of the business combination.
• The company may be unable to obtain additional financing on reasonable terms or at all.
• The delisting from Nasdaq may reduce the appeal of the company to potential business combination targets and investors.
• There is a risk that the company may not be able to complete its initial business combination within the prescribed time frame, leading to liquidation.
• Material weaknesses in internal control over financial reporting could lead to misstatements and harm the company's reputation.
• The company may be deemed a foreign person, potentially subjecting the business combination to regulatory review and approval requirements.
• The company is solely dependent on the future performance of Tembo e-LV B.V. if the business combination is completed, lacking diversification.
• The company's management may have limited ability to assess the management of Tembo e-LV B.V., posing risks to the post-combination company's operations.

Future Outlook

The company is focused on completing its business combination with Tembo e-LV B.V. before the mandatory liquidation date of November 2, 2026. This process involves SEC review, shareholder approvals, and satisfaction of closing conditions. The company may need to secure additional third-party financing to complete the transaction.

Management Comments

• Management has concluded that its internal control over financial reporting was not effective as of December 31, 2025, due to a material weakness related to insufficient finance personnel.
• Management plans to implement remediation efforts, including enhanced review procedures and hiring additional personnel, to address the material weakness.
• The company intends to use substantially all of the funds held in its trust account to complete the initial business combination.

Industry Context

StockSavvy.ai notes that Cactus Acquisition Corp. 1 Ltd. is operating within the challenging SPAC market, characterized by increased regulatory scrutiny and a need for timely business combination completion. The company's focus on the renewables sector aligns with broader global trends in clean energy.

Management Changes

Related Party Transactions

• The company issued an unsecured promissory note to its third sponsor, ARWM Inc Pte. Ltd., with a principal amount up to $500,000, extended to the earlier of business combination or June 30, 2027.
• The company has outstanding sponsor loans and promissory notes from related parties.

Stakeholder Impact

• Shareholders face uncertainty regarding the completion of the business combination and the potential for liquidation, which could result in a loss of investment.
• The delisting from Nasdaq may reduce the liquidity and market price of securities, impacting investors.
• The material weaknesses in internal controls could erode investor confidence and potentially lead to regulatory scrutiny.

Next Steps

• Finalize responses to the SEC's comment letter on the Form F-4 registration statement.
• Target confidential resubmission of the amended Form F-4 during the second half of 2026.
• Continue working towards completing the proposed business combination with Tembo e-LV B.V. before the November 2, 2026 liquidation date.
• Address material weaknesses in internal control over financial reporting.

Key Dates

Recommendation

The company is in a precarious position with its business combination deadline and delisting from Nasdaq. While progress is being made with Tembo e-LV B.V., the significant redemptions and internal control weaknesses present substantial risks. A 'hold' recommendation reflects the uncertainty and the need for further developments on the business combination and remediation of internal controls before considering a more definitive stance.

Keywords

SPAC, Business Combination, Tembo e-LV B.V., Delisting, OTC Market, Form 10-K, Cayman Islands, Promissory Note