DEF 14A: Cactus Acquisition Seeks SPAC Extension to Nov 2026

Cactus Acquisition Corp. 1 Limited is seeking shareholder approval to extend its business combination deadline by one year to November 2, 2026, to finalize its merger with Tembo e-LV B.V.

Summary

• Cactus Acquisition Corp. 1 Limited (CCTS) is holding an Extraordinary General Meeting on October 31, 2025, to vote on extending its business combination deadline.
• The current deadline for completing a business combination is November 2, 2025, and the proposed extension is to November 2, 2026.
• This extension is critical to complete the previously announced Business Combination Agreement with VivoPower International PLC and its subsidiary Tembo e-LV B.V., which was signed on August 29, 2024.
• Without the Articles Extension, the company would be forced to liquidate, and its warrants would expire worthless.
• Shareholders have redemption rights for their Class A ordinary shares (Public Shares) at an estimated per-share price of approximately $12.16, based on the Trust Account balance of $9,282,053.48 as of October 20, 2025.
• The closing price of the company's ordinary shares on the OTC Pink Market on October 20, 2025, was $11.79, offering a redemption premium of approximately $0.37 per share.
• The Articles Extension Proposal requires a special resolution (two-thirds majority vote), while the Adjournment Proposal requires an ordinary resolution (simple majority vote).
• The Board unanimously recommends voting FOR both proposals.
• This marks the fourth extension sought by the company since its IPO in November 2021, following previous extensions from May 2, 2023, to November 2, 2023; November 2, 2023, to November 2, 2024; and November 2, 2024, to November 2, 2025.
• The company's securities were delisted from Nasdaq on March 21, 2025, and now trade on the OTC Pink Market.

Sentiment

Score: 3

Explanation: The company is facing significant operational and market challenges, evidenced by repeated delays in completing a business combination and a delisting from Nasdaq. While a specific merger target has been identified, the history of extensions and the move to a less liquid market introduce substantial uncertainty and risk. The redemption option offers a slight premium, but the overall situation is precarious.

Positives

• The proposed extension provides the necessary time to complete the announced business combination with VivoPower/Tembo, preventing immediate liquidation.
• Shareholders who elect to redeem their Public Shares will receive an estimated $12.16 per share, representing a premium of $0.37 over the market price of $11.79 as of October 20, 2025.
• The Board's unanimous recommendation for the extension signals management's commitment to the business combination.
• The Current Sponsor has agreed to indemnify the company against certain claims that could reduce the Trust Account below $10.20 per Public Share in the event of liquidation, subject to specific conditions.

Negatives

• This is the fourth extension sought, indicating persistent delays and challenges in completing a business combination.
• The company's securities were delisted from Nasdaq on March 21, 2025, and now trade on the less liquid OTC Pink Market, which could negatively impact share liquidity and future financing capabilities.
• There is a risk that high redemption rates could leave insufficient cash in the Trust Account to consummate the business combination on commercially acceptable terms, or at all.
• If the extension is not approved and the company liquidates, all outstanding warrants will expire worthless.
• The company faces a risk of being deemed an investment company under the Investment Company Act, which would severely restrict its activities and could lead to liquidation.
• The Current Sponsor's control by non-U.S. persons may subject a U.S. target business combination to Committee on Foreign Investment in the United States (CFIUS) review, potentially delaying or prohibiting the transaction.
• The company may liquidate Trust Account investments into cash to mitigate Investment Company Act risk, which would likely reduce interest income for shareholders.
• The Current Sponsor's ability to satisfy its indemnity obligations in case of liquidation is uncertain, as its only assets are company securities.

Risks

• Inability to complete a business combination by the extended deadline of November 2, 2026, leading to liquidation and worthless warrants.
• High redemption rates by public shareholders could result in insufficient cash to consummate an initial business combination on commercially acceptable terms.
• Delisting from Nasdaq to the OTC Pink Market reduces liquidity, market quotations, analyst coverage, and the ability to issue additional securities or obtain financing.
• Potential for the company to be deemed an unregistered investment company under the Investment Company Act, leading to severe restrictions or liquidation.
• CFIUS review risk for a U.S. target business combination due to non-U.S. control of the Current Sponsor, potentially delaying or prohibiting the merger.
• Reduced interest income from the Trust Account if funds are held in cash instead of U.S. government treasury obligations to mitigate Investment Company Act risk.
• Uncertainty regarding the Current Sponsor's ability to satisfy indemnity obligations in case of liquidation.
• The market price of the company's shares may be volatile, and shareholders may be unable to dispose of their Public Shares at favorable prices in the open market.

Future Outlook

The company anticipates holding an extraordinary general meeting of shareholders before November 2, 2026, to consider and vote upon approval of the business combination with VivoPower/Tembo, assuming the extension is approved. If the Articles Extension Proposal is not approved, the company will wind up, liquidate, and dissolve. The company does not currently anticipate seeking any further extensions beyond November 2, 2026.

Management Comments

• The Board has determined that it is in the best interests of our shareholders to extend the date by which the Company has to consummate an initial business combination to the Articles Extension Date in order for our shareholders to have the opportunity to vote on the Business Combination Agreement.
• Our Board believes shareholders will benefit from the Company consummating an initial business combination and is proposing the Articles Extension to extend the date by which the Company may complete an initial business combination.
• The Board unanimously recommends that shareholders vote FOR the proposals.

Industry Context

The company's situation reflects broader challenges within the SPAC industry, where many blank check companies struggle to identify and complete suitable business combinations within initial deadlines, often necessitating multiple extensions. The delisting from Nasdaq to the OTC Markets is a common outcome for SPACs that fail to secure a definitive merger or meet continued listing requirements, impacting investor confidence and liquidity. The increasing regulatory scrutiny, including concerns about the Investment Company Act and potential CFIUS reviews for transactions involving foreign sponsors or U.S. targets, adds complexity to the SPAC M&A landscape.

Comparison to Industry Standards

• The need for a fourth extension to complete a business combination is significantly longer than typical SPAC timelines, which usually aim for 18-24 months, and often only one or two extensions are sought before liquidation or merger completion.
• The delisting from Nasdaq to the less liquid OTC Pink Market is a negative deviation from the standard for publicly traded companies, indicating a failure to meet national exchange listing requirements, a common fate for SPACs that do not complete a merger in a timely manner.
• The redemption premium of $0.37 per share (redemption price of $12.16 vs. market price of $11.79) is a common characteristic in SPAC extension votes, where the trust value often exceeds the trading price due to market uncertainty or lack of a definitive, approved deal. This offers a risk-free return for redeeming shareholders, which can lead to high redemptions, similar to other SPACs in extension phases.

Corporate Governance

Related Party Transactions

• The Current Sponsor (ARWM Inc Pte. Ltd.) and prior sponsors beneficially own 2,417,499 Class A Ordinary Shares and 4,866,667 Private Warrants, which would become worthless upon liquidation.
• The Current Sponsor has loaned the company $840,000 in working capital, which may not be repaid from Trust Account funds and would be repaid or converted into warrants only upon a business combination closing or liquidation.
• In connection with previous extensions, the original and successor sponsors agreed to transfer Founder Shares to non-redeeming shareholders (e.g., 115,000 shares for the first extension, 184,990 for the second, and up to 150,000 for the third).
• The Current Sponsor has agreed to indemnify the company against certain third-party claims that could reduce the Trust Account below $10.20 per Public Share in case of liquidation, subject to waivers from claimants.
• The company's directors and executive officers have interests in the proposals due to their ownership of Founder Shares and Private Warrants, and the potential for future compensatory arrangements if a business combination is completed.

Stakeholder Impact

• **Shareholders**: Will have the opportunity to vote on the extension, potentially allowing participation in the combined company or the option to redeem shares at a premium to the current market price. Face the risk of liquidation and worthless warrants if the extension fails. Experience reduced liquidity due to trading on the OTC Pink Market.
• **Warrant Holders**: Warrants will become worthless if the company liquidates due to a failed extension. Warrants will remain outstanding if the extension is approved.
• **Management/Sponsor**: Approval of the extension is crucial for retaining the value of their Founder Shares and Private Warrants, avoiding liquidation, and potentially receiving reimbursement for out-of-pocket expenses and repayment of working capital loans.
• **Prospective Target (VivoPower/Tembo)**: The extension is essential for the proposed business combination to proceed, as the current deadline would force the company to liquidate before the merger can be completed.

Next Steps

• Shareholders will vote on the Articles Extension Proposal and the Adjournment Proposal at the Extraordinary General Meeting on October 31, 2025.
• If the Articles Extension Proposal is approved, the company will file an amendment to its Articles of Association in the Cayman Islands.
• The company will continue efforts to consummate the initial business combination with VivoPower/Tembo by the new deadline of November 2, 2026.
• If the extension is approved, an extraordinary general meeting will be held before November 2, 2026, to consider and vote upon approval of the business combination.
• If the extension is not approved, the company will liquidate and dissolve its Trust Account by November 2, 2025.

Key Dates

Recommendation

The company is at a critical juncture, seeking its fourth extension to complete a business combination after being delisted from Nasdaq. While the proposed merger with VivoPower/Tembo offers a potential path forward, the repeated delays and move to the OTC market introduce significant risk. Shareholders have a clear option to redeem their shares at an estimated $12.16, which is a premium to the current market price of $11.79. For risk-averse investors, redemption is a viable exit. For those who believe in the long-term potential of the Tembo merger, holding through the extension vote is necessary. However, the high level of uncertainty and past performance issues make a 'buy' recommendation premature. Therefore, 'hold' allows investors to either take the redemption premium or maintain their position for the potential, albeit risky, completion of the business combination.

Keywords

SPAC, business combination, extension, proxy statement, DEF 14A, Cactus Acquisition Corp. 1 Limited, CCTS, VivoPower, Tembo, merger, liquidation, redemption, Nasdaq delisting, OTC Markets, CFIUS, investment company risk