ccts20240630

ccts20240630_10q.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number 001-40981

Cactus Acquisition Corp. 1 Ltd

(Exact name of registrant as specified in its charter)

Cayman Islands		333-258042		N/A
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

4B Cedar Brook Drive
Cranbury, NJ 08512
(Address of principal executive offices, including zip code)

(609) 495-2222

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Class A ordinary shares, par value $0.0001 per share	CCTS	The Nasdaq Stock Market LLC

Redeemable warrants, each warrant exercisable for one Class A ordinary share at an exercise price of $11.50	CCTSW	The Nasdaq Stock Market LLC

Units, each consisting of one Class A ordinary share and one-half of a redeemable warrant	CCTSU	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	☐
Non-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 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of August 15, 2024, 5,074,870 Class A ordinary shares, par value $0.0001 per share, and 1Class B ordinary share, par value $0.0001 per share, were issued and outstanding.

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CACTUS ACQUISITION CORP. 1 LTD.

QUARTERLY REPORT ON FORM 10-Q

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		Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		v
PART I		1
Item 1. Financial Statements.		1
	Unaudited Condensed Balance Sheets	F-2
	Unaudited Condensed Statement of Operations	F-3
	Unaudited Condensed Statements of Changes in Capital Deficiency	F-4
	Unaudited Condensed Statement of Cash Flows	F-5
	Notes to Condensed Financial Statements (unaudited)	F-6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		1
Item 3. Quantitative and Qualitative Disclosures About Market Risk.		8
Item 4. Controls and Procedures.		8
PART II		9
Item 1. Legal Proceedings.		9
Item 1A. Risk Factors.		9
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds/		9
Item 3. Defaults Upon Senior Securities.		10
Item 4. Mine Safety Disclosures.		10
Item 5. Other Information.		10
Item 6. Exhibits.		10
SIGNATURES		11

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CERTAIN TERMS

Unless otherwise stated in this Quarterly Report on Form 10-Q (this “Quarterly Report” or “Form 10-Q”), references to:

“administrative support services agreement” are to the administrative support services agreement between us and the original sponsor dated as of May 21, 2021;

“administrative services agreement termination” are to the administrative services agreement termination agreement between us and the original sponsor dated as of May 21, 2021;

“amended and restated memorandum and articles of association” are to our amended and restated memorandum and articles of association, which went into effect upon the completion of our IPO and were amended on May 30, 2023;

“articles amendment meeting” are to the extraordinary general meeting held on May 30, 2023 at which we sought approval to amend our amended and restated memorandum and articles of association to provide that the existing restriction that prevents the issuance of additional shares that would vote together with the publicly held Class A ordinary shares on a proposal to approve our initial business combination will not apply to the issuance of Class A ordinary shares upon conversion of Class B ordinary shares where the holders of the converted shares waive their rights to proceeds from our trust account;

“ARWM” are to ARWM Pte Limited, our third sponsor;

“Board” our board of directors from time to time;

“initial business combination” are to a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses;

“Class A ordinary shares” are to our Class A ordinary shares, par value $0.0001 per share;

“Class B ordinary shares” are to our Class B ordinary shares, par value $0.0001 per share;

“combination period” are to the 30-month period from the closing of the IPO to November 2, 2024 (or such earlier date as determined by the Board) reflecting the first extension and the second extension, that we have to consummate an initial business combination; provided that the combination period may be further extended pursuant to an amendment to the amended and restated memorandum and articles of association and consistent with applicable laws, regulations and stock exchange rules;

“deferred underwriting fee waivers” are to the waivers from the representatives of the underwriters of the IPO, with respect to the underwriters’ respective entitlement to the payment of any deferred underwriting commissions in respect of the IPO;

“directors” are to our past and current directors;

“Energi” are to Energi Holding Limited;

“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

“EVGI” are to EVGI Limited, our second sponsor

“equity-linked securities” are to any securities of our company that are convertible into or exchangeable or exercisable for, Class A ordinary shares of our company;

“first extension” are to the extension, to November 2, 2023, of the deadline for our entry into an initial business combination under our amended and restated memorandum and articles of association;

“first extension meeting” are to the extraordinary general meeting in lieu of our 2023 annual general meeting held on April 20, 2023 at which we sought approval for, among related matters, (i) the first extension and (ii) a related extension of the term of the trust agreement until November 2, 2023;

“first extension non-redeeming shareholders” are to the several unaffiliated third party shareholders with whom we and the original sponsor entered into the first NRAs;

“first NRAs” are to the non-redemption agreements entered into with the first extension non-redeeming shareholders in connection with the first extension;

“founders shares” are to our 3,162,499 Class A ordinary shares and 1 Class B ordinary share, in the aggregate, initially purchased in the form of Class B ordinary shares in a private placement (2,875,000 shares), or received in a share dividend (287,500 shares), by our original sponsor prior to our IPO, and the 1 Class A ordinary shares that will be issued upon the automatic conversion of those the remaining 1 Class B ordinary shares at the time of our initial business combination (for the avoidance of doubt, such Class A ordinary shares will not be “public shares”);

“founder share conversion” are to the conversion by our original sponsor 3,162,499 of the 3,162,500 founders shares from Class B ordinary shares to Class A ordinary shares on October 24, 2023;

“head of agreement” are to the non-binding heads of agreement with Tembo regarding a potential business combination transaction;

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“IFRS” are to international financing reporting standards as issued by the International Accounting Standards Board;

“Investment Company Act” are to the Investment Company Act of 1940, as amended;

“IPO” or “initial public offering” refers to the initial public offering of our Class A ordinary shares, which was consummated on November 2, 2021;

“IPO promissory note” are to the promissory note issued by us to our original sponsor on May 24, 2021, which was repaid on November 2, 2021;

“letter agreement” are to the letter agreement entered into between us and our original sponsor, the other initial shareholders, directors and officers on or prior to the date of our IPO, the form of which was filed as an exhibit to the registration statement for our IPO;

“letter agreement waiver” are to the agreement by which we waived the transfer restrictions applicable to the sponsor transferred securities dated February 15, 2024;

“management” or our “management team” are to our officers and directors;

“note termination agreement” are to the note termination agreement, dated February 15, 2024, by and between us and our original sponsor;

“original sponsor” are to Cactus Healthcare Management LP, our first sponsor, a Delaware limited partnership, including, where applicable, its affiliates;

“other initial shareholders” are to holders of our founder shares prior to our IPO, other than our original sponsor;

“private warrants” are to the 4,866,667 warrants that were issued and sold to our original sponsor in a private placement simultaneously with the closing of our initial public offering;

“public shareholders” are to the holders of our public shares, including our original sponsor, officers and directors to the extent our original sponsor, officers or directors purchase public shares, provided their status as a “public shareholder” shall only exist with respect to such public shares;

“public shares” are to our Class A ordinary shares sold as part of the public units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market);

“public units” are to the units (consisting of public shares and warrants) sold in our initial public offering;

“registration rights agreement” are to the registration rights agreement dated November 2, 2021among us, the original sponsor and any other holders of our securities who become party thereto from time to time, the form of which was filed as an exhibit to the registration statement for our IPO;

“registration rights joinder agreement” are to the joinder agreement to the registration rights agreement dated February 15, 2024 among our original sponsor, the successor sponsor and us;

“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;

“SEC” are to the U.S. Securities and Exchange Commission;

“second extension” are to the extension, to November 2, 2024, of the deadline for our entry into an initial business combination under our amended and restated memorandum and articles of association;

“second extension meeting” are to the extraordinary general meeting held on November 2, 2023 approval for, among related matters, the second extension;

“second extension non-redeeming shareholders” are to the several unaffiliated third party shareholders with whom we and the original sponsor entered into the first NRAs;

“second NRAs” are to the non-redemption agreements entered into with the second extension non-redeeming shareholders in connection with the second extension;

“second sponsor” are to EVGI Ltd, an English private limited company, including, where applicable, its affiliates;

“second sponsor alliance” are to the transfers of 80% of the founders shares and 80% of the private warrants held by the sponsor to the successor sponsor, including all agreements executed in connection with such transfers, which closed on February 23, 2024;

“Securities Act” are to the Securities Act of 1933, as amended;

iii

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“sponsor shareholders” are to our original or first sponsor, Cactus Healthcare Management LP, the second sponsor, EVGI Ltd, and the third sponsor, ARWM Pte Limited;

“sponsor transfer” are to the transfer of the sponsor transferred securities from the original sponsor to the second sponsor and from the second sponsor to the third sponsor;

“second sponsor” are to EVGI Ltd, an English private limited company, including, where applicable, its affiliates;

“second sponsor alliance” are to the transfers of 80% of the founders shares and 80% of the private warrants held by the original sponsor to the second sponsor, including all agreements executed in connection with such transfers, which closed on February 23, 2024;

“third sponsor” are to ARWM Pte, Limited, including, where applicable, its affiliates;

“third sponsor alliance” are to the transfers of 100% of the founders shares and 100% of the private warrants held by the second sponsor to the third sponsor, including all agreements executed in connection with such transfers, which closed on May 16, 2024;

“trust account” are to the U.S.-based trust account at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company, acting as trustee;

“trust agreement” are to the investment management trust agreement, dated as of November 2, 2021, by and between our company and Continental Stock Transfer & Trust Company, as trustee;

“unit” are to a unit consisting of one Class A ordinary share and one-half warrant;

“warrants” are to our redeemable warrants sold as part of the public units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market) and the private warrants;

“we,” “us,” “our,” the “company” or “our company” are to Cactus Acquisition Corp. 1 Limited, a Cayman Islands exempted company;

“2023 Annual Report” are to our annual report on Form 10-K for the year ended December 31, 2023, which we filed with the SEC on April 15, 2023;

“2024 SPAC Rules” are to the new rules and regulations for special purpose acquisition companies adopted by the SEC on January 24, 2024, which will become effective on July 1, 2024; and

“$,” “US$” and “U.S. dollar” each refer to the United States dollar.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some statements contained in this Annual Report are forward-looking in nature. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Annual Report may include, for example, statements about:

●

our ability to complete our initial business combination with a business that reflects our strategy;

●

our expectations around the performance of the prospective target business or businesses;

●

our ability to remain qualified for continued listing on the Nasdaq Stock Market despite the likelihood of substantial redemptions of our ordinary shares;

●

our potential ability to obtain additional financing to complete our initial business combination;

●

the ability of the combined company resulting from our initial business combination to qualify for initial listing on the Nasdaq Stock Market despite the substantial redemptions of our ordinary shares in connection with the first extension meeting and the second extension meeting;

●

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

●

our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements;

●

our pool of prospective target businesses;

●

risks associated with acquiring a business that reflects our strategy;

●

the ability of our officers and directors to generate a number of potential acquisition opportunities;

●

our public securities’ potential liquidity and trading;

●

the lack of a market for our securities;

●

the use of proceeds not held in our U.S.-based trust account at Bank of America, N.A. maintained by Continental Stock Transfer & Trust Company, acting as trustee (“trust account”) or available to us from interest income on our trust account balance;

●

our trust account not being subject to claims of third parties; or

●

our financial performance following our initial public offering or following our initial business combination.

Additionally, on January 24, 2024, the SEC (as defined below) adopted the 2024 SPAC Rules, which will become effective on July 1, 2024, and will affect our ability to effect a business combination transaction. The 2024 SPAC Rules require, among other matters, (i) additional disclosures relating to business combination transactions; (ii) additional disclosures relating to dilution and to conflicts of interest involving sponsors and their affiliates in both initial public offerings and business combination transactions of special purpose acquisition companies; (iii) additional disclosures regarding projections included in SEC filings in connection with proposed business combination transactions; and (iv) the requirement that both the of special purpose acquisition company and its target company be co-registrants for registration statements relating to business combination transactions. In addition, the SEC’s adopting release provided guidance describing circumstances in which a special purpose acquisition company like ourselves could become subject to regulation under the Investment Company Act of 1940, as amended (the “Investment Company Act”), including its duration, asset composition, business purpose, and the activities of the special purpose acquisition company and its management team in furtherance of such goals. The 2024 SPAC Rules may materially affect our ability to negotiate and complete our initial business combination and may increase the costs and time related thereto.

The forward-looking statements contained in this Annual Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in “Item 1A. Risk Factors”. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CACTUS ACQUISITION CORP. 1 LIMITED

UNAUDITED CONDENSED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024 AND FOR THE THREE MONTHS ENDED ON THAT DATE

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CACTUS ACQUISITION CORP. 1 LIMITED

UNAUDITED CONDENSED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023, AND FOR THE SIX MONTHS ENDED ON THAT DATE

INDEX

	Page


Condensed Balance Sheets	F-2

Condensed Statement of Operations	F-3

Condensed Statement of Changes in Capital Deficiency	F-4

Condensed Statement of Cash Flows	F-5

Notes to the Condensed Financial Statements	F-6 – F-18

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CACTUS ACQUISITION CORP. 1 LIMITED

UNAUDITED CONDENSED BALANCE SHEETS

			June 30,			December 31,
	Note		2024			2023
			U.S. Dollars in thousands
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents				35			78
Prepaid expenses				118			-
TOTAL CURRENT ASSETS				153			78

NON-CURRENT ASSETS:
Cash held in trust account				21,832			21,161
TOTAL ASSETS				21,985			21,239
Liabilities, shares subject to possible redemption and capital deficiency
CURRENT LIABILITIES:
Accrued expenses and other liabilities				228			538
Sponsor loan				151			570
Promissory Notes				459			-
Related Party				12			12
TOTAL CURRENT LIABILITIES				850			1,120

LONG TERM LIABILITIES -
Underwriter’s deferred compensation		7		-			4,428
TOTAL LIABILITIES				850			5,548

COMMITMENTS AND CONTINGENCIES

CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION: 1,912,371 shares at June 30, 2024, at a redemption value of $11.42 per share and at December 31, 2023, at a redemption value of $11.07 per share				21,832			21,161

CAPITAL DEFICIENCY:		4
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized, 3,162,499 shares and 0 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively				-			-
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized, 1 share and 3,162,500 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively				*			*
Preference Shares, $0.0001 par value; 5,000,000 shares authorized, no shares issued and outstanding				-			-
Additional paid in capital				435			-
Accumulated deficit				(1,132	)		(5,470	)
TOTAL CAPITAL DEFICIENCY				(697	)		(5,470	)
TOTAL LIABILITIES, SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)				21,985			21,239

^(*) Represents an amount less than 1 thousand US Dollars

The accompanying notes are an integral part of these unaudited condensed financial statements.

F-2

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CACTUS ACQUISITION CORP. 1 LIMITED

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

	Six months ended June 30, 2024			Six months ended June 30, 2023			Three months ended June 30, 2024			Three months ended June 30, 2023
	U.S. Dollars in thousands
	Except per share data
INTEREST EARNED ON MARKETABLE SECURITIES HELD IN TRUST ACCOUNT		557			2,089			280			700
OPERATING EXPENSES		(542	)		(803	)		(302	)		(481	)
FINANCIAL EXPENSES		(105	)		-			(105	)		-
NET EARNINGS (LOSS) FOR THE PERIOD		(90	)		1,286			(127	)		219

WEIGHTED AVERAGE OF CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION		1,912,371			9,000,141			1,912,371			5,350,282
BASIC AND DILUTED EARNINGS PER CLASS A ORDINARY SHARE, see Note 5		0.22			0.20			0.10			0.12

WEIGHTED AVERAGE OF NON-REDEEMABLE CLASS A AND CLASS B ORDINARY SHARES OUTSTANDING		3,162,500			3,162,500			3,162,500			3,162,500
BASIC AND DILUTED (LOSS) PER NON-REDEEMABLE CLASS A AND CLASS B ORDINARY SHARE, see Note 5		1.34			(0.15	)		(0.10	)		(0.14	)

The accompanying notes are an integral part of these unaudited condensed financial statements.

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CACTUS ACQUISITION CORP. 1 LIMITED

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)

	Class A Ordinary shares				Class B Ordinary shares
	Number of shares		Par value		Number of shares		Par value		Additional paid- in capital			Accumulated Deficit			Total
	U.S. dollars in thousands (except share data)

BALANCE AT JANUARY 1, 2024		3,162,499		*		1		*		-			(5,470	)		(5,470	)
Sponsor Loan Cancelation										860						860
Valuation of promissory note										246						246
Accretion of Class A common stock subject to redemption amount as of June 30, 2024										(671	)					(671	)
Underwriters’ deferred compensation waiver													4,428			4,428
Net loss for the period													(90	)		(90	)
BALANCE AT JUNE 30, 2024		3,162,499		-		1		*		435			(1,132	)		(697	)

BALANCE AT APRIL 1, 2024:		3,162,499		-		1		*		771			(1,005	)		(234	)
Accretion of Class A common stock subject to redemption amount as of June 30, 2024										(336	)					(336	)
Net loss for the period													(127	)		(127	)
BALANCE AT JUNE 30, 2024		3,162,499		-		1		*		435			(1,132	)		(697	)

BALANCE AT JANUARY 1, 2023:		3,162,500		*		-		-		-			(4,052	)		(4,052	)
Accretion of Class A common stock subject to redemption amount as of June 30, 2023										(184	)		(2,169	)		(2,353	)
Sponsor surrender of 115,000 Class B common stock										184						184
Net loss for the period													1,286			1,286
BALANCE AT JUNE 30, 2023		3,162,500		*		-		-		-			(4,935	)		(4,935	)

BALANCE AT APRIL 1, 2023:		3,162,500		*		-		-		-			(4,374	)		(4,374	)
Accretion of Class A common stock subject to redemption amount as of June 30, 2023										(184	)		(780	)		(964	)
Sponsor surrender of 115,000 Class B common stock										184			-			184
Net earnings for the period													219			219
BALANCE AT JUNE 30, 2023		3,162,500		*		-		-		-			(4,935	)		(4,935	)

^(*) Represents an amount less than 1 thousand US Dollars

The accompanying notes are an integral part of these unaudited condensed financial statements.

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CACTUS ACQUISITION CORP. 1 LIMITED

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

	Six months ended June 30, 2024			Six months ended June 30, 2023
	U.S. Dollars in thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) for the period		(90	)		1,286
Financial expenses		105			-
Changes in operating assets and liabilities:		-			-
Decrease in prepaid expenses		(118	)		165
Increase (decrease) in accrued expenses		(310	)		388
Net cash used in (provided by) operating activities		(413	)		1,839

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Sponsor loan		441			250
Proceeds from promissory note		600			-
Redemption of Class A Ordinary shares		-			(108,901	)
Net cash provided by financing activities		1,041			(108,651	)


NET CHANGE IN CASH, CASH EQUIVALENTS AND CASH HELD IN A TRUST ACCOUNT		628			(106,812	)
CASH, CASH EQUIVALENTS AND CASH HELD IN A TRUST ACCOUNT AT BEGINNING OF THE PERIOD		21,239			131,136
CASH, CASH EQUIVALENTS AND CASH HELD IN A TRUST ACCOUNT AT END OF THE PERIOD		21,867			24,324

RECONCILIATION OF CASH, CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS HELD IN TRUST ACCOUNT:
Cash and cash equivalents		35			163
Cash held in trust account		21,832			24,161
CASH, CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS HELD IN TRUST ACCOUNT AT END OF THE PERIOD		21,867			24,324

SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS:
Sponsor Loan Cancelation		860			-
Valuation of promissory note		246			-
Underwriters’ deferred compensation waiver		4,428			-

The accompanying notes are an integral part of these unaudited condensed financial statements.

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS:

Organization and General

Cactus Acquisition Corp. 1 Limited (hereafter – the Company) is a blank check company, incorporated on April 19, 2021 as a Cayman Islands exempted company, formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination (hereafter – the Business Combination).

The Company may pursue a business combination target in any business or industry and across any geographical region and has historically focused its search on technology-based healthcare businesses that are domiciled in Israel that carry out all or a substantial portion of their activities in Israel or that have some other significant Israeli connection. Since the closing of the Sponsor Alliance (see Note 8 Subsequent Events), the Company altered the focus of its search to emerging technology companies globally, and particularly those in the renewables sector.

The Company is an early stage and an emerging growth company, and as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

All activity for the period from inception through June 30, 2024 relates to the Company’s formation, its initial public offering (the "Public offering") described below and its search for a target company. The Company generates interest income on proceeds held in the trust account derived from the Public Offering and the private placement (as defined below in Note 3).

Sponsor and Financing

On February 9, 2024, the Company’s first sponsor, Cactus Healthcare Management, L.P. (“Cactus LP”), entered into a sponsor securities purchase agreement with EVGI Limited (“EVGI”), the Company’s second sponsor, pursuant to which, on February 23, 2024, Cactus LP transferred to EVGI 80% of the securities of the Company owned by Cactus LP prior to the transaction.

On April 29, 2024, a subsequent sponsor securities purchase agreement was executed between EVGI, the Company’s second sponsor, and ARWM Pte Limited (ARWM”), the Company’s third sponsor, pursuant to which, on May 16, 2024, EVGI transferred to ARWM 100% of the securities of the Company owned by EVGI prior to the transaction.

See Note 6 Related Party Transactions regarding Second Sponsor Alliance, Third Second Sponsor Alliance, and Promissory Notes for additional information.

The registration statement relating to the Company’s Public Offering was declared effective by the United States Securities and Exchange Commission (the “SEC”) on October 28, 2021. The initial stage of the Company’s Public Offering— the sale of 12,650,000 Units — closed on November 2, 2021. Upon that closing $129.03 million was placed in a trust account (the “Trust Account”) (see also note 1(c) below). Out of the $129.03 million placed in the trust account, the Company raised a total of $126.5 million, inclusive of the exercise of the over-allotment option and an additional $2.53 million were invested by the Company's Sponsor for the benefit of the Public to preserve a redemption value of $10.20. The Company intends to finance its initial Business Combination with the net proceeds from the Public Offering and the Private Placement.

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 1 - GENERAL (continued):

The Trust Account

The proceeds held in the Trust Account are invested in money market funds registered under the Investment Company Act and compliant with Rule 2a-7 thereof that maintain a stable net asset value of $1.00. Unless and until the Company completes the Initial Business Combination, it may pay its expenses only from the net proceeds of the Public Offering held outside the Trust Account.

Initial Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating an initial Business Combination. The initial Business Combination must occur with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding taxes payable on the income accrued in the Trust Account). There is no assurance that the Company will be able to successfully consummate an initial Business Combination.

The Company, after signing a definitive agreement for an Initial Business Combination, will provide its public shareholders the opportunity to redeem all or a portion of their shares upon the completion of the initial Business Combination, either (i) in connection with a shareholder meeting called to approve the business combination or (ii) by means of a tender offer. However, in no event will the Company redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000 thousand following such redemptions. In such case, the Company would not proceed with the redemption of its public shares and the related initial Business Combination, and instead may search for an alternate initial Business Combination.

If the Company holds a shareholder vote or there is a tender offer for shares in connection with an initial Business Combination, a public shareholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account, calculated as of two days prior to the general meeting or commencement of the Company’s tender offer, including interest but less taxes payable. As a result, the Company’s Class A ordinary shares are recorded at redemption amount and classified as temporary equity upon the completion of the Public Offering, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity.”

Initial Business Combination / Extension Amendment

Pursuant to the Company’s amended and restated memorandum and articles of association, if the Company is unable to complete the initial Business Combination within 18 months from the closing of the Public Offering, the Company will (i) cease all operations except for the purpose of winding up, (ii) 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 (which interest shall be net of taxes payable, and less up to $100 thousand of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 1 - GENERAL (continued):

On November 2, 2023, the Company held an extraordinary general meeting (the “Second Extension Meeting”), at which the Company’s shareholders voted to approve the Second Extension, which extended the Mandatory Liquidation Date from November 2, 2023 to November 2, 2024.

The Sponsors and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to any Class B ordinary shares (as described in Note 7) held by them if the Company fails to complete the initial Business Combination within 18 months of the closing of the Public Offering or during any extended time that the Company has to consummate an initial Business Combination beyond 18 months as a result of a shareholder vote to amend its amended and restated memorandum and articles of association. However, if the Sponsor or any of the Company’s directors or officers acquire any Class A ordinary shares, they will be entitled to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the Initial Business Combination within the prescribed time period.

In the event of a liquidation, dissolution or winding up of the Company after an initial Business Combination, the Company’s shareholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the ordinary shares. The Company’s shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares, except that the Company will provide its shareholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, under the circumstances, and, subject to the limitations, described herein.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

On November 2, 2023 the Company extended the date by which the Company has to consummate an Initial Business Combination from November 2, 2023 to November 2, 2024 (hereafter – the Mandatory Liquidation Date). If a business combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. The Company intends to complete an Initial Business Combination before the Mandatory Liquidation Date.

However, there can be no assurance that the Company will be able to consummate any business combination ahead of the Mandatory Liquidation Date, nor that they will be able to raise sufficient funds to complete an Initial Business Combination. These matters raise substantial doubt about the Company’s ability to continue as a going concern, for the subsequent twelve months following the issuance date of these financial statements. No adjustments have been made to the carrying amounts and classification of assets or liabilities should the Company fail to obtain financial support in its search for an Initial Business Combination, nor if it is required to liquidate after the Mandatory Liquidation Date. See also Note 5.

No adjustments have been made to the carrying amounts of assets or liabilities should the Company fail to obtain financial support in its search for an Initial

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 1 - GENERAL (continued):

Business Combination, nor if it is required to liquidate after the Mandatory Liquidation Date.

Emerging Growth Company

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 a comparison of the Company’s financial statements 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.

Notice of Delisting

On June 29, 2023, the Company received a written notice (the “Notice”) from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that the Company was not in compliance with Listing Rule 5450(b)(2)(A) (the “MVLS Rule”), which requires the Company to have at least $50 million market value of listed securities (the “MVLS”) for continued listing on the Nasdaq Global Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Notice states that the Company has 180 calendar days, or until December 26, 2023, in which to regain compliance with the MVLS Rule. The Company took steps to regain compliance prior to the December 26, 2023 date and in January 2024, Nasdaq staff notified the Company that it had regained compliance the MVLS rule.

On September 8, 2023, the Company, received an additional written notice (the “Total Holders Notice”) from Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rule 5450(a)(2), which requires the Company to maintain at least 400 total holders for continued listing on the Nasdaq Global Market (the “Minimum Total Holders Rule”). In accordance with Nasdaq Listing Rule 5810(c)(2)(A)(i), the Total Holders Notice stated that the Company had 45 calendar days, or until October 23, 2023, to submit a plan to regain compliance with the Minimum Total Holders Rule.

On October 23, 2023, the Company submitted a plan to regain compliance with the Minimum Total Holders Rule. On November 9, 2023 Nasdaq accepted the Company’s plan, and in doing so Nasdaq granted the Company an extension until March 6, 2024 (subsequently extended to March 11, 2024) to evidence compliance with the Minimum Total Holders Rule. On March 12, 2024 the Company received notice from Nasdaq that it was once again in compliance with the Minimum Total Holders Rule.

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 1 - GENERAL (continued):

On May 7, 2024, the Company received a written notice (the “Notice”) from Nasdaq indicating that the Company was not in compliance with Listing Rule 5450(b)(2)(C) (the “MVPHS Rule”), which requires listed securities to maintain a minimum Market Value of Publicly Held Shares (MVPHS) of $15,000,000. Based upon Nasdaq’s review of the Company’s MVPHS, the Company no longer meets this requirement. Consequently, a deficiency exists with regard to the MVPHS Rule. However, in accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Notice states that the Company has 180 calendar days, or until November 4, 2024, in which to regain compliance with the MVPHS Rule.

The Notice is only a notification of deficiency and has no current effect on the listing or trading of the Company’s securities on the Nasdaq Global Market. In the event the Company does not regain compliance with the MVPHS Rule prior to the expiration of the compliance period of November 4, 2024, it will receive written notification from Nasdaq that its securities are subject to delisting on The Nasdaq Global Market. Alternatively, the Company may apply to transfer the Company’s securities to The Nasdaq Capital Market, which requires listed securities to maintain a minimum MVPHS of $5,000,000, which the Company exceeded at May 10, 2024.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (hereafter – U.S. GAAP) and the regulations of the Securities Exchange Commission (hereafter – SEC). The significant accounting policies used in the preparation of the financial statements are as follows:

Basis of Presentation

The Company’s unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the SEC for interim financial information and the instructions to Form 10-Q.

Certain disclosures included in the financial statements as of, and for the year ended, December 31, 2023, have been condensed or omitted from these financial statements as they are not required for interim financial statements under U.S. GAAP and the rules of the SEC. These unaudited condensed financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. These adjustments are of a normal, recurring nature. Interim period operating results may not be indicative of the operating results for a full year.

These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements.

The accounting policies applied in the preparation of the unaudited condensed financial statements are consistent with those applied in the preparation of the annual financial statements as of December 31, 2023.

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 3 - PUBLIC OFFERING

In the Initial Public Offering, the Company issued and sold 12,650,000 units at an offering price of $10.00 per unit (the “Units”). The Sponsor purchased an aggregate of 4,866,667 Private Warrants (as defined below) at a price of $1.50 per Private Warrant, approximately $7,300,000 in the aggregate.

Each Unit consists of one Class A ordinary share, $0.0001 par value, and one-half of one warrant, with each whole warrant exercisable for one Class A ordinary share (each, a “Warrant” and, collectively, the “Warrants”). Each Warrant entitles the holder thereof to purchase one whole Class A ordinary share at a price of $11.50 per share, subject to adjustment. No fractional shares will be issued upon exercise of the Warrants and only whole Warrants will trade. Each Warrant will become exercisable 30 days after the completion of the Company’s initial Business Combination and will expire at 5:00 p.m., New York City time, five years after the completion of the initial Business Combination or earlier upon redemption (only in the case of the Warrants sold in the Public Offering, or the “Public Warrants”) or liquidation.

Once the Public Warrants become exercisable, the Company may redeem them in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last reported sale price of the Company’s Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders.

The Warrants sold in the Private Placement (the “Private Warrants”) are identical to the Public Warrants except that: (1) they (including the ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the sponsor until 30 days after the completion of the initial business combination; (2) they (including the ordinary shares issuable upon exercise of these warrants) are not registered but are entitled to registration rights; and (3) prior to being sold in the open market or transferred into "street name", they are not redeemable by the Company.

The Company paid an underwriting commission of 2.0% of the gross proceeds of the Public Offering, or $2,530 thousand, in the aggregate, to the underwriters at the closings of the Public Offering. Refer to Note 6 for more information regarding an additional fee that was payable to the underwriters upon the consummation of an Initial Business Combination.

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 4 - CAPITAL DEFICIENCY:

Ordinary Shares

Class A ordinary shares

The Company is authorized to issue up to 500,000,000 Class A ordinary shares of $0.0001 par value each. Pursuant to the initial Public Offering on December 31, 2022 the Company issued and sold an aggregate of 12,650,000 Class A ordinary shares as part of the Units sold in the respective transaction. The Units (which also included Warrants) were sold at a price of $10 per Unit, and for an aggregate consideration of $126,500 thousand in the Public. See Note 3 above for further information regarding those share issuances.

Class B ordinary shares

The Company is authorized to issue up to 50,000,000 Class B ordinary shares of $0.0001 par value each. On May 14, 2021 the Company issued 2,875,000 Class B ordinary shares of $0.0001 par value each for a total consideration of $25 thousand to the Sponsor. In October 2021, the Company effected a stock share dividend of 0.1 shares for each founder share outstanding, resulting in an aggregate of 3,162,500 founder shares outstanding and held by the Sponsor and the Company’s directors.

Class B ordinary shares are convertible into Class A ordinary shares, on a one-to-one basis, at any time and from time to time at the option of the holder, or automatically on the day of the business combination. Class B ordinary shares also possess the sole right to vote for the election or removal of directors, until the consummation of an initial business combination.

On October 24, 2023, the Sponsor converted 3,162,499 of the 3,162,500 founders shares from Class B ordinary shares to Class A ordinary shares, leaving only one Class B ordinary share outstanding.

Preference shares

The Company is authorized to issue up to 5,000,000 Preference Shares of $0.0001 par value each. As of June 30, 2024 and 2023, the Company has no Preference shares issued and outstanding.

NOTE 5 - EARNINGS PER SHARE:

Basic

As of June 30, 2024 and 2023, the Company had two classes of ordinary shares, Class A ordinary shares and Class B ordinary shares. In order to determine the net loss attributable to each class, the Company first considered the total earnings (loss) allocable to both sets of shares. This is calculated using the total earnings (loss) less any Interest Earned on Investments Held in Trust Account. The accretion to redemption value of the Class A ordinary shares subject to possible redemption is fully allocated to the Class A ordinary shares subject to redemption.

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 5 - EARNINGS PER SHARE (continued):

	Six months ended June 30, 2024			Six months ended June 30, 2023			Three months ended June 30, 2024			Three months ended June 30, 2023
	U.S. dollars in thousands (except share data)

Net earnings (loss) for the period		(90	)		1,286			(127	)		219
Less - interest earned on marketable securities held in trust account		557			2,089			280			700
Net loss excluding interest		(647	)		(803	)		(407	)		(481	)

Class A ordinary shares subject to possible redemption:
Numerator:
Net loss excluding interest		(244	)		(591	)		(153	)		(298	)

Accretion on Class A ordinary shares subject to possible redemption to redemption amount ("Accretion")		671			2,353			337			964
		427			1,762			184			666
Denominator:
Weighted average of class A ordinary shares subject to possible redemption		1,912,371			9,000,141			1,912,371			5,350,282
Basic and diluted earnings per Class A ordinary share subject to possible redemption		0.22			0.20			0.10			0.12

Non-redeemable Class A and Class B ordinary shares:
Numerator:
Net loss excluding interest		(403	)		(210	)		(254	)		(181	)
Sponsor Loan Cancelation		335
Accretion		(114	)		-			(57	)		-
Underwriters’ deferred compensation waiver		4,428			(264	)		-			(264	)
		4,246			(474	)		(311	)		(445	)

Denominator:
Weighted average of non-redeemable Class A and Class B ordinary shares outstanding		3,162,500			3,162,500			3,162,500			3,162,500
Basic and diluted loss per non-redeemable Class A and Class B ordinary share		1.34			(0.15	)		(0.10	)		(0.14	)

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 5 –EARNINGS PER SHARE:

Diluted

As of June 30, 2024 and 2023, the Company did not have any dilutive securities or any other contracts which could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. Additionally, the effect of the conversion of the Promissory Notes into private warrants (exercisable into shares) as detailed in Note 6 and 7, has not been included in the calculation of diluted net earnings (loss) per share, since the conversion of the abovementioned promissory notes is contingent upon the occurrence of a future event.

NOTE 6 - RELATED PARTY TRANSACTIONS:

Issuance of shares

In May 2021, the Company's first sponsor purchased 2,875,000 founders shares from the Company for an aggregate purchase price of $25 thousand, or approximately $0.009 per share. In October 2021, the Company effected a stock share dividend of 0.1 shares for each founder share outstanding, resulting in an aggregate of 3,162,500 founder shares outstanding and held by the Sponsor and the Company’s directors. For warrants purchased by the sponsor at the Initial Public Offering see note 3.

Promissory notes

On January 30, 2024, the Company issued a convertible promissory note to the first Sponsor under which the Company can borrow up to a $330 thousand principal amount from the first Sponsor or its registered assigns or successors in interest (the “Payee”), which will be funded equally by the primary three limited partners of the first Sponsor ($110,000 each). The Company shall draw amounts under the promissory note to fund costs and expenses related to its operations and the Business Combination. The promissory note contains the same terms and conditions as the March 16, 2022 and November 8, 2023 promissory notes referenced above.

On January 31, 2024, the Company requested of the first Sponsor that $290 thousand of the $330 thousand promissory note be funded. The requested amount of $290 thousand was received by the Company on February 5, 2024.

On February 23, 2024, as part of closing of the Second Sponsor Alliance, the promissory notes issued by the Company to the first Sponsor, consisting of promissory notes (x) dated March 16, 2022, in a principal amount of $450,000, (y) dated November 8, 2023, in a principal funded amount of $120,000, and (z) dated January 30, 2023, in a principal funded amount of $290,000, were canceled by the Sponsor. This $860,000 adjustment was reflected in the changes in shareholders’ equity (capital deficiency) section of the Company’s financial statements.

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 6 - RELATED PARTY TRANSACTIONS (continued):

On May 17, 2024, the Company issued an unsecured promissory note to the Company’s third sponsor, ARWM Inc Pte. Ltd. (the “Lender”) with a principal amount up to $500,000 (the “Note”). The Note is repayable in full upon the earlier of (a) November 1, 2024, (b) the date of the consummation of the Company’s initial business combination or (c) the date of the liquidation of the Company (such earlier date, the “Maturity Date”). The Note bears no interest, however, an establishment fee, a line fee and an exit fee totaling in aggregate 9.0% per annum are payable on the Maturity Date. At the option of Lender, at any time on or prior to the Maturity Date, any unpaid principal amount outstanding under this Note may be converted into whole warrants of the Company to purchase common stock of the Company at a conversion price equal to $1.00 per Warrant. If Lender elects such conversion, the terms of such Warrants shall be identical, with the exception of the exercise price, to the warrants issued in connection with Company’s initial public offering that closed on November 02, 2021 (the “Private Placement Warrants”).

During May and June, 2024, the Lender advanced $151,000 to the Company under the Note. If the Company does not consummate an initial business combination by the Maturity Date the Note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.

Second Sponsor Alliance

On February 9, 2024, a sponsor securities purchase agreement was executed between the Company’s first sponsor, Cactus Healthcare Management, L.P. (“Cactus LP”) and the Company's second sponsor, EVGI Limited (“EVGI”), pursuant to which, on February 23, 2024, Cactus LP transferred to EVGI (a) an aggregate of 2,530,000 founders’ shares (“Founders’ Shares”), consisting of 2,529,999 Class A ordinary shares, par value $0.0001 of the Company (“Class A ordinary shares”) and one Class B ordinary share, par value $0.0001, of the Company (“Class B ordinary share”), and (b) 3,893,334 private placement warrants (“Private Warrants”) that had been purchased by the first sponsor concurrently with the Company’s initial public offering in November 2021 (the “IPO”). The transferred securities collectively constituted 80% of the securities of the Company owned by the first sponsor prior to the transaction. The first Sponsor has retained 632,500 Founders’ Shares and 973,333 Private Warrants.

In connection with the Second Sponsor Alliance, the Company, Cactus LP and EVGI entered into a joinder agreement (the “Registration Rights Joinder Agreement”) to the registration rights agreement, dated November 2, 2021, by and among the Company, the first Sponsor and any other holders of the Company’s securities who become party thereto from time to time (the “Registration Rights Agreement”) whereby (i) the first Sponsor assigned its rights under the Registration Rights Agreement with respect to the Transferred Securities to the Purchaser, and (ii) the Purchaser became party to the Registration Rights Agreement. Also, in connection with the Transfer, the Company waived the transfer restrictions applicable to the Transferred Securities under the letter agreement, dated October 28, 2021 (the “Letter Agreement”), by and among the Company, the first Sponsor and the original officers and directors of the Company, in order to allow for the Transfer by the first Sponsor to the Purchaser of the Founders’ Shares and Private Warrants (the “Letter Agreement Waiver”).

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 6 - RELATED PARTY TRANSACTIONS (continued):

In addition, in connection with the closing of the transferred securities, the Company obtained a waiver from the representatives of the underwriters of the Company’s IPO, with respect to the underwriters’ respective entitlement to the payment of any deferred underwriting commissions under the terms of the Underwriting Agreement, dated October 28, 2021, by and between the Company and the underwriters of the IPO.

On February 23, 2024, the parties completed the closing of the Second Sponsor Alliance and as part of the closing, the Company introduced a change in management and the board of directors of the Company upon the closing, and new directors and management were appointed to the Board.

Third Sponsor Alliance

On April 29, 2024, a subsequent sponsor securities purchase agreement was executed between EVGI, the Company’s second sponsor, and ARWM Pte Limited (“ARWM”), the Company’s third sponsor, pursuant to which, EVGI agreed to transfer to ARWM on the closing (a) an aggregate of 2,360,000 founders’ shares, consisting of 2,359,999 Class A ordinary shares of the Company, or 46.50% of the outstanding Class A Ordinary Shares, and 1 Class B ordinary share of the Company (“Class B Ordinary Share”), or 100% of the outstanding Class B Ordinary Shares and (b) 3,893,334 private placement warrants (“Private Warrants”) that had been purchased by the first Sponsor concurrently with the Company’s IPO. Prior to the closing of the Third Sponsor Alliance, 170,000 Class A Ordinary Shares owned by EVGI were transferred to EVGI designees. The transferred securities collectively constituted 100% of the securities of the Company owned by EVGI prior to transaction.

On May 16, 2024, the parties completed the closing and as part of the closing of the Third Sponsor Alliance, the Company introduced a change in management and the board of directors of the Company.

Heads of Agreement

On April 2, 2024, the Company entered into a non-binding heads of agreement with Tembo e-LV B.V.(Tembo), a private company incorporated under the laws of the Netherlands, regarding a potential business combination transaction. The Company’s Chief Executive Officer is also the Chief Operating Officer and Chief Financial Officer of VivoPower International PLC, which owns 100% of Tembo (noting his role is administrative in nature and he is recused from any decision making in relation to any proposed business combination).

See Note 9 Subsequent Event for additional information on Heads of Agreement.

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 7 – PROMISSORY NOTE:

On March 25, 2024, the Company issued an unsecured promissory note to Energi Holding Limited (the “Lender”) , not a related party, with a principal amount up to $600,000 (the “Note”). The Note is repayable in full upon the earlier of (a) November 1, 2024, (b) the date of the consummation of the Company’s initial business combination or (c) the date of the liquidation of the Company (such earlier date, the “Maturity Date”). The Note bears no interest, however, an establishment fee, a line fee and an exit fee totaling in aggregate 9.0% per annum, are payable on the Maturity Date.

On March 25, 2024, the Lender advanced $600,000 to the Company under the Note. If the Company does not consummate an initial business combination by the Maturity Date, the Note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.

As an inducement for the Lender to fund the Note, EVGI Limited (“EVGI”), the second sponsor, and the Lender agreed that (a) Sponsor and the Lender shall enter into an agreement pursuant to which the Lender may elect upon forfeiture of its rights to payment of amounts outstanding under the Note to receive a number of the Company’s Class A Ordinary Shares held of record by the Sponsor to be determined in such agreement and (b) Sponsor shall transfer to the Lender 600,000 of the Company’s Class A ordinary shares held of record by Sponsor, or subsequent sponsors, for no consideration at such time and on such terms as shall be agreed. The Sponsor's inducement was recognized as a deduction from the $600,000 note in an amount of $246,000, which will be recognized in subsequent periods as finance expenses. The $246,000 value was determined based on a market approach methodology with a probability of acquisition assessment, using a stock price of $10.00 and assigning a probability of acquisition of 15%. This $246,000 value consideration is reflected as an increase to additional paid in capital and a reduction to the note liability for debt issuance costs.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Underwriters’ Deferred Compensation

Under the Underwriting Agreement, the Company was obligated to pay an additional fee (the “Deferred Underwriting Compensation”) of 3.5% ($4,428 thousand) of the gross proceeds of the Public Offering. payable upon the Company’s completion of the initial Business Combination. The Deferred Underwriting Compensation will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes the Initial Business Combination. The Underwriting Compensation has been recorded as a deferred liability on the balance sheet as of June 30, 2023 as management has deemed the consummation of a Business Combination to be probable at the issuance date.

In connection with the closing of the Sponsor Alliance on February 23, 2024, the Company obtained a waiver with respect to the underwriters’ payment of the deferred underwriting compensation additional fee.

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CACTUS ACQUISITION CORP. 1 LIMITED

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (continued)

NOTE 9 - SUBSEQUENT EVENT :

Heads of Agreement

On July 2 and July 29, 2024, the Company executed one-month extensions to July 31, 2024 and August 31, 2024, respectively, of its exclusive non-binding heads of agreement with Tembo regarding a potential business combination transaction. The extension is intended to provide additional time to finalize the definitive business combination agreement relating to the proposed transaction with Tembo as well as the completion of an independent fairness opinion.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a blank check company incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We completed our initial public offering in November 2021, and since that time, we have engaged in discussions with potential business combination target companies; we have not, however, as of yet, reached a definitive agreement with a specific target company with respect to an initial business combination with us. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement of the private warrants, our shares, debt or a combination of cash, shares and debt.

The issuance of additional ordinary shares in a business combination (by our company, or by a target company that will serve as the public company following the business combination and in which target company shareholders may possess a majority interest):

●

may significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions of the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;

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may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;

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could cause a change of control if a substantial number of our (or the target company’s) ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

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may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and

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may adversely affect prevailing market prices for our Class A ordinary shares and/or warrants.

Similarly, if we or the target company issue(s) debt securities or otherwise incur significant indebtedness, it could result in:

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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;

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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is issued and outstanding;

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our inability to pay dividends on our ordinary shares;

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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

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As indicated in the accompanying financial statements, at December 31, 2023 we had $78,000 of cash and a $468,000 working capital deficit (net of Sponsor loan). Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.

Extension of our Combination Period

First extension

We initially had until May 2, 2023, or 18 months from the closing of the IPO, to consummate our initial business combination. On April 20, 2023, we held the first extension meeting in lieu of our 2023 annual general meeting. At the first extension meeting our shareholders voted to approve the first extension. At the first extension meeting 10,185,471 Class A ordinary shares were redeemed, resulting in 2,464,529 publicly-held Class A ordinary shares outstanding. Accordingly, on May 1, 2023, $106,733,855 was distributed from trust account to the shareholders who redeemed their shares.

In connection with the first extension meeting, we and our original sponsor entered into the first NRAs with the first extension non-redeeming shareholders. Pursuant to the first NRAs, the first extension non-redeeming shareholders agreed not to redeem an aggregate of 2,000,000 Class A ordinary shares in connection with the first extension. In exchange for the foregoing commitment, our original sponsor agreed to transfer an aggregate of 130,000 Class B ordinary shares held by our original sponsor to the first extension non-redeeming shareholders immediately following, and subject to, consummation of an initial business combination.

In addition, in connection with the shareholders’ approval of the first extension, we and our original sponsor committed to contribute up to $240,000 to our trust account, consisting of $40,000 on or before May 2, 2023, and $40,000 on or before the 2nd day of each subsequent calendar month until (but excluding) November 2, 2023 or such earlier date on which (a) our Board determines to liquidate us or (b) an initial business combination is completed.

Second extension

On November 2, 2023, we held the second extension meeting, at which our shareholders voted to approve the second extension. At the second extension meeting a total of 347,980 Class A ordinary shares were redeemed in connection with the second extension, resulting in 5,074,870 Class A ordinary shares outstanding, consisting of 1,912,371 publicly-held Class A ordinary shares and 3,162,499 Class A ordinary shares comprising founders shares. Accordingly, on November 10, 2023, $3,813,082 was distributed from trust account to the shareholders who redeemed their shares.

In connection with the second extension meeting, we and our original sponsor entered into the second NRAs with the second extension non-redeeming shareholders. Pursuant to the second NRAs, the second extension non-redeeming shareholders agreed not to redeem an aggregate of 1,849,900 Class A ordinary shares related to the shareholder vote on the second extension.

In exchange for the foregoing commitment, our original sponsor agreed to transfer an aggregate of 184,990 founders shares (which were converted from Class B ordinary shares to Class A ordinary shares) held by our original sponsor to the Second Non-Redeeming Shareholders immediately following, and subject to, consummation of a business combination.

In addition to transfer of founders shares, we and our original sponsor committed, in connection with the shareholders’ approval of the second extension, to contribute to our trust account, on a monthly basis until November 2, 2024, the lesser of (i) $20,000 and (ii) $0.01 per publicly-held Class A ordinary share multiplied by the number of publicly-held Class A ordinary shares outstanding. Monthly contributions are to be made on the 15^th day of each calendar month during the second extension period, beginning in November 2023 and until (but not including) November 2024. Given the 1,912,371 publicly-held Class A ordinary shares that were not redeemed, the contributions over the course of the twelve-month second extension period are expected to amount to approximately $19,124 per month, or up to $229,485 in the aggregate. Our original sponsor contributions will cease on such earlier date on which (a) the Board determines to liquidate the company or (b) a business combination is completed. Pursuant to the sponsor purchase agreement, the successor sponsor has agreed to make such contributions from the closing of the sponsor alliance.

We may seek to further extend the combination period in accordance with our amended and restated memorandum and articles of association and consistent with applicable laws, regulations and stock exchange rules. Such an extension would require the approval of our shareholders, who would, as previously, be provided the opportunity to redeem all or a portion of their Class A ordinary shares. Such redemptions will likely have a material adverse effect on the amount held in our trust account, our capitalization, principal shareholders and other impacts on us or our management team, such as our ability to maintain our listing on Nasdaq.

Founder Share Conversion

On May 30, 2023, we held the articles amendment meeting. At the articles amendment meeting, our shareholders approved, by way of special resolution, a proposal to amend the amended and restated memorandum and articles of association to provide that the existing restriction under the amended and restated memorandum and articles of association that prevents the issuance of additional shares that would vote together with the publicly-held Class A ordinary shares on a proposal to approve our initial business combination will not apply to the issuance of Class A ordinary shares upon conversion of Class B ordinary shares where the holders of the converted shares waive their rights to proceeds from our trust account. The requisite voting majority was achieved for approval.

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On October 24, 2023, our original sponsor converted 3,162,499 of the 3,162,500 founders shares from Class B ordinary shares to Class A ordinary shares, leaving only 1 Class B ordinary share outstanding.

Nasdaq Compliance – MVLS Rule

On June 29, 2023, we received a written notice from Nasdaq indicating that we were not in compliance with the MVLS Rule, which requires us to have at least $50 million MVLS for continued listing on the Nasdaq Global Market.

In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the notice stated that we had 180 calendar days, or until December 26, 2023, in which to regain compliance with the MVLS Rule. The notice stated that if at any time before December 26, 2023, our MVLS closes at $50 million or more for a minimum of ten consecutive business days, the Nasdaq staff will provide written confirmation that we have regained compliance with the MVLS Rule.

On February 15, 2024 we received notice from Nasdaq that we were once again in compliance with the MVLS Rule.

Nasdaq Compliance - Minimum Total Holders Rule

On September 8, 2023, we, received an additional written notice from Nasdaq indicating that we were not in compliance with the Minimum Total Holders Rule, which requires us to maintain at least 400 total holders for continued listing on the Nasdaq Global Market. In accordance with Nasdaq Listing Rule 5810(c)(2)(A)(i), the notice stated that we had 45 calendar days, or until October 23, 2023, to submit a plan to regain compliance with the Minimum Total Holders Rule.

October 23, 2023, we submitted a plan to regain compliance with the Minimum Total Holders Rule. Nasdaq accepted our plan, and in doing so Nasdaq granted us an extension until March 6, 2024 (subsequently extended to March 11, 2024) to evidence compliance with the Minimum Total Holders Rule.

On March 12, 2024, we received notice from Nasdaq that we were once again in compliance with the Minimum Total Holders Rule.

Recent Developments

Second Sponsor Alliance

On February 9, 2024, we entered into a sponsor securities sponsor purchase agreement with our original sponsor and the second sponsor pursuant to which, on February 23, 2024, our original sponsor transferred to our second sponsor (a) an aggregate of 2,530,000 founders’ shares, consisting of 2,529,999 Class A ordinary shares and 1 Class B ordinary share and (b) 3,893,334 private warrants that had been purchased by our original sponsor concurrently with the our IPO. The sponsor transferred securities collectively constituted 80% of our securities owned by our original sponsor prior to the sponsor transfer. Our original sponsor has retained 632,500 Class A Ordinary Shares and 973,333 Private Warrants. The sponsor transfer, all agreements executed in connection with the sponsor transfer (including the transactions contemplated therein) and the changes to management described below are referred to as the “second sponsor alliance.”

In connection with the sponsor alliance, we, our original sponsor and our second sponsor entered into the registration rights joinder agreement, whereby (a) our original sponsor assigned its rights under the registration rights agreement with respect to the sponsor transferred securities to our second sponsor and (b) our second sponsor became party to the registration rights agreement. Also, in connection with the second sponsor alliance, we entered into a letter agreement waiver by which we waived the transfer restrictions applicable to the sponsor transferred securities under the letter agreement in order to allow for the sponsor transfer by our original sponsor to our second sponsor of the sponsor transferred securities. In addition, in connection with the closing of the second sponsor alliance, we obtained the deferred underwriting fee waivers from the representatives of the underwriters of the IPO, with respect to the underwriters’ respective entitlement to the payment of any deferred underwriting commissions under the terms of the underwriting agreement.

As part of the closing of the second sponsor alliance on February 23, 2024, we introduced a change in management and the Board as follows:

•

Ofer Gonen resigned as Chief Executive Officer;

•

Stephen T. Wills tendered his resignation as Chief Financial Officer;

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Nachum (Homi) Shamir, a director and Chairman of the Board, and Dr. Hadar Ron, a director, resigned as members of the Board; and

•

each of Emmanuel Meyer, Joseph C. Thomassen and Huiyan Geng were appointed to the Board by our successor sponsor.

On February 23, 2024, the parties completed the closing of the second sponsor alliance after all closing conditions were met or waived, including but not limited to: (a) the surrender by our original sponsor to us for cancelation of the promissory notes issued by us to our original sponsor, consisting of promissory notes dated (i) March 16, 2022, in a principal amount of $450,000, (ii) November 8, 2023, in a principal amount of $120,000 and (iii) January 30, 2023, in a principal amount of $290,000 funded, as evidenced by a note termination agreement, (b) our having obtained the deferred underwriting fee waivers and (c) the termination of the administrative support services agreement.

In addition, with effect from on April 11, 2024, upon the expiration of all applicable waiting periods under Section 14(f) of the Exchange Act and Rule 14f-1 thereunder:

•

each of Dr. David Sidransky, Dr. David J. Shulkin and Mr. Gonen has tendered his resignation as a director;

•

Gary Challinor was appointed Chief Executive Officer; and

•

Stephen T. Wills was re-appointed Chief Financial Officer.

Designees of our successor sponsor now constitute the entire Board and its executive officers.

Third Sponsor Alliance

On April 29, 2024, we entered into a subsequent sponsor securities purchase agreement (the “Second Purchase Agreement”) with the Company’s sponsor, EVGI and ARWM Pte Limited (the “Second Purchaser” or “ARWM”), pursuant to which, EVGI has agreed to transfer to the Second Purchaser on the closing under the Second Purchase Agreement (a) an aggregate of 2,360,000 founders’ shares (“Founders’ Shares”), consisting of 2,359,999 Class A ordinary shares, par value $0.0001, of the Company (“Class A Ordinary Shares”), or 46.50% of the outstanding Class A Ordinary Shares, and 1 Class B ordinary share, par value $0.0001, of the Company (“Class B Ordinary Share”), or 100% of the outstanding Class B Ordinary Shares and (b) 3,893,334 private placement warrants (“Private Warrants”) that had been purchased by the Original Sponsor concurrently with the Company’s IPO (collectively, the “Second Transferred Securities”). The Second Transferred Securities collectively constituted 93.3% of the securities of the Company owned by the Purchaser prior to the Second Transfer (as defined below). 170,000 Class A Ordinary Shares, or 3.36% of the outstanding Class A Ordinary Shares were transferred where earlier transferred to the Purchaser’s Designees (as defined below). The Original Sponsor has retained 632,500 Class A Ordinary Shares, or 12.46% of the outstanding Class A Ordinary Shares, and 973,333 Private Warrants. The transfer of the Second Transferred Securities to the Second Purchaser pursuant to the Second Purchase Agreement is referred to as the “Third Transfer.” The Second Transfer, all agreements executed in connection with the Second Transfer are referred to as the “Third Sponsor Alliance.”

As part of the closing of the Sponsor Alliance on May 16, 2024, the Company introduced a change in management (the “Management Change”) and the board of directors of the Company (“Board”) as follows: (i) Stephen T. Wills tendered his resignation as Chief Financial Officer, initially effective upon the closing but subsequently extended to May 31, 2024; and (ii) , Emmanuel Meyer, Joep Thomassen and Huiyan Geng resigned as members of the Board of Directors, effective upon the closing. Also, effective as of the closing on May 16, 2024, Adam John Ridgway, Jeffrey Brian LeBlanc and Terry Allan Farris (collectively, the “New Directors”) were appointed to the Board by the Purchaser, as the holder of the sole outstanding Class B ordinary share.

Promissory Note

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Heads of Agreement

April 2, 2024, we entered into a non-binding heads of agreement with Tembo e-LV B.V., a private company incorporated under the laws of the Netherlands, regarding a potential business combination transaction. The Company’s Chief Executive Officer is also Chief Operating Officer and Chief Financial Officer of VivoPower International PLC, which owns 100% of Tembo (noting his role is administrative in nature and he is recused from any decision making in relation to any proposed business combination).

Listing Rules

On May 7, 2024, we received a written notice (the “Notice”) from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that the Company was not in compliance with Listing Rule 5450(b)(2)(C) (the “MVPHS Rule”), which requires listed securities to maintain a minimum Market Value of Publicly Held Shares (MVPHS) of $15,000,000. Based upon Nasdaq’s review of the Company’s MVPHS, the Company no longer meets this requirement. Consequently, a deficiency exists with regard to the MVPHS Rule. However, in accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Notice states that the Company has 180 calendar days, or until November 4, 2024, in which to regain compliance with the MVPHS Rule. The Notice states that if at any time before November 4, 2024, the Company’s MVPHS closes at $15,000,000 or more for a minimum of ten (10) consecutive business days, the Nasdaq staff will provide written confirmation that the Company has regained compliance with the MVPHS Rule.

We will continue to monitor its MVPHS and consider its available options to regain compliance with the MVPHS Rule. If compliance is not achieved by November 4, 2024, the Company expects to apply to Nasdaq to transfer the Company’s securities to The Nasdaq Capital Market.

Results of Operations

We have not engaged in any revenue-generating operations to date. Our only activities since inception have been organizational activities, preparations for our initial public offering, and, subsequent to our initial public offering, searching for, and due diligence related to, potential target companies with which to consummate a business combination transaction. We have not and we will not generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of interest income on funds held in our trust account after our initial public offering. There has been no significant change in our financial or trading position since the June 30, 2024 date of our financial statements contained in this Quarterly Report. After our initial public offering, which was consummated in November 2021, we have been incurring increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses related to our search for a target company.

Liquidity and Capital Resources

As of June 30, 2024, we had $35,000 in our operating bank account, and a working capital deficit of $546,000 (not including the sponsor loan).

Our liquidity needs to date have been satisfied through loans primarily from our sponsors, plus third-parties to cover certain operating expenses.

On May 24, 2021, our original sponsor agreed to lend us up to $300,000 to be used for a portion of the expenses of our initial public offering; our obligation to repay those loans was reflected in a $300,000 promissory note (the “IPO promissory note”) that we issued to our original sponsor. The loans under that note were non-interest bearing, unsecured and were due at the earlier of December 31, 2021 or the close of our initial public offering. The loans were repaid upon the closing of the offering on November 2, 2021 out of the offering proceeds not held in our trust account and no amounts were outstanding under the IPO promissory note issued to our original sponsor.

In addition, in order to finance transaction costs leading up to, and in connection with, our potential initial business combination, on March 16, 2022, our original sponsor, together with three primary limited partners of our original sponsor (Clal Biotechnology Industries, Israel Biotech Fund and Consensus Business Group (via its affiliate, Kalistcare Ltd.)), have committed to funding us up to $450,000, as may be required by us. In March 2023, we requested, and received from our original sponsor, the full $450,000 amount that may be loaned to us under a promissory note that represents that loan commitment.

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On November 8, 2023, our original sponsor, together with three primary limited partners of our original sponsor (Clal Biotechnology Industries, Israel Biotech Fund and Consensus Business Group (via its affiliate, Kalistcare Ltd.)), committed to funding us up to $120,000, as may be required by us. On November 8, 2023, we requested, and received from our original sponsor, the full $120,000 amount that may be loaned to us under a promissory note that represents that loan commitment.

On January 30, 2024, we issued a convertible promissory note to our original sponsor under which we can borrow up to a $330 thousand principal amount from the original sponsor, which will be funded equally by the primary three limited partners of the original Sponsor ($110,000 each), to fund costs and expenses related to our operations and the potential business combination. On January 31, 2024, we requested from our original sponsor that $290 thousand of the $330 thousand promissory note be funded. The requested amount of $290,000 was received by us on February 5, 2024.

On March 25, 2024, we issued an unsecured promissory note to Energi Holding Limited (the “Lender”) , not a related party, with a principal amount up to $600,000 (the “Note”). The Note is repayable in full upon the earlier of (a) November 1, 2024, (b) the date of the consummation of the Company’s initial business combination or (c) the date of the liquidation of the Company (such earlier date, the “Maturity Date”). The Note bears no interest, however, an establishment fee, a line fee and an exit fee totaling in aggregate 9.0% per annum, are payable on the Maturity Date.

On March 25, 2024, the Lender advanced $600,000 to us under the Note. If we do not consummate an initial business combination by the Maturity Date, the Note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.

On May 17, 2024, we issued an unsecured promissory note to our third sponsor, ARWM Inc Pte. Ltd. (the “Lender”) with a principal amount up to $500,000 (the “Note”). The Note is repayable in full upon the earlier of (a) November 1, 2024, (b) the date of the consummation of the Company’s initial business combination or (c) the date of the liquidation of the Company (such earlier date, the “Maturity Date”). The Note bears no interest, however, an establishment fee, a line fee and an exit fee totaling in aggregate 9.0% per annum are payable on the Maturity Date. At the option of Lender, at any time on or prior to the Maturity Date, any unpaid principal amount outstanding under this Note may be converted into whole warrants of the Company to purchase our common stock at a conversion price equal to $1.00 per Warrant.

During May and June, 2024, the Lender advanced $151,000 to us under the Note. If we do not consummate an initial business combination by the Maturity Date the Note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.

We intend to use substantially all of the funds held in our trust account, including any amounts representing interest earned on our trust account (which interest shall be net of taxes payable), minus amounts paid out to redeeming shareholders, as consideration to complete our initial business combination. To the extent that our ordinary shares or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in our trust account (less any amounts paid out to redeeming shareholders) will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

Prior to our initial business combination, we are using the proceeds held outside of our 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 a business combination, pay for administrative and support services, and pay taxes to the extent the interest earned on our trust account is not sufficient to pay our taxes. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.

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As of June 30, 2024, only approximately $35,000 is available to us outside of the trust account to fund our working capital requirements. Because of the anticipated costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination, as noted above, we have requested and are seeking additional loans from several third parties, but to date have not secured any additional funding. While, if obtained, we anticipate that these loans will suffice for the period leading up to our initial business combination, we have not yet obtained, and there can be no assurance that the loans will ever be obtained, and, even if they are, that the costs of identifying a target business, undertaking in-depth due diligence and negotiating and consummating an initial business combination may be greater than what we currently estimate would be needed to do so. Consequently, it is likely that we may have insufficient funds available to operate our business prior to our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate our trust account. That required liquidation date would be less than 12 months after the date of this Annual Report. That, among other factors, raises substantial doubt about our ability to continue as a going concern. See “Item 1 - Risk Factors – Risks Relating to our Search for, and Consummation of or Inability to Consummate, a Business Combination - Because the funds being held outside of the trust account are insufficient to allow us to operate for the remainder of the combination period , that could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, as we will depend on additional loans third parties to fund those activities” in our 2023 Annual Report.

Moreover, given the significant percentage of our public shareholders that have elected to redeem their shares in connection with our first extension meeting, our second extension meeting and our article amendment meeting, and may elect to redeem at a meeting to approve a business combination, thereby reducing our cash resources, we likely will need to secure third party financing in order to successfully effect such a business combination and there can be no assurance that it will be available to us on terms acceptable to us or at all. Subject to compliance with applicable securities laws, we would only raise financing by issuing additional securities simultaneously with the completion of our business combination. We cannot assure you that our plans for that financing or to consummate an initial business combination will be successful.

Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results

As of December 31, 2023, we did not have any off-balance sheet arrangements as described in Item 303 of Regulation S-K and did not have any commitments for capital expenditures or contractual obligations. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Critical Accounting Estimates

None.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The net proceeds from our initial public offering and the sale of the private warrants held in the trust account, after reduction for payments made for the redemption of a portion of the public shares in connection with the first extension meeting, conversion amendment meeting and second extension meeting, are invested in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 (the “Investment Company Act”), which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our chief executive officer and chief financial officer, whom we refer to as our certifying officers, the effectiveness of our disclosure controls and procedures as of June 30, 2024, pursuant to Rule 13a-15(b) or Rule 15d-15(b) under the Exchange Act. Based upon that evaluation, our certifying officers concluded that, as of June 30, 2024 our disclosure controls and procedures were effective.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS.

There have been no material changes with respect to the risk factors disclosed in our 2023 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Unregistered Sales

In May 2021, our original sponsor purchased an aggregate of 2,875,000 of our Class B ordinary shares for an aggregate purchase price of $25,000. In October 2021, we effected a share dividend of 0.1 shares for each share then outstanding, thereby resulting in 3,162,500 Class B ordinary shares outstanding and held by our original sponsor. The sale of the Class B ordinary shares was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. On October 24, 2023, our original sponsor converted 3,162,499 of the 3,162,500 founders shares from Class B ordinary shares to Class A ordinary shares, leaving only 1 Class B ordinary share outstanding. The remaining Class B ordinary shares will automatically convert into Class A ordinary shares at the time of our initial business combination on a one-for-one basis, subject to the adjustments described herein.

Substantially concurrent with the closing of the initial public offering, we effected a private placement of 4,866,667 private warrants to our original sponsor at a price of $1.50 per warrant, or $7,300,000 in the aggregate. The purchase of the private warrants provided additional funds that are necessary to maintain in our trust account $10.20 per unit sold to the public, as well as funds outside of our trust account for our working capital requirements. The private warrants are identical to the warrants sold to the public as part of the units, except that the private warrants will not be redeemable. The sale of the private warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

In the case that additional Class A ordinary shares, or equity-linked securities convertible or exercisable for Class A ordinary shares, are issued or deemed issued in excess of the amounts issued in our initial public offering and related to the closing of our initial business combination, the ratio at which Class B ordinary shares will convert into Class A ordinary shares will be adjusted (subject to waiver by holders of a majority of the Class B ordinary shares then in issue) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of our ordinary shares issued and outstanding upon the completion of our initial public offering plus the number of Class A ordinary shares and equity-linked securities issued or deemed issued in connection with our initial business combination (net of redemptions), excluding any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination and any private warrants issued to our original sponsor, a partner or affiliate of our original sponsor, or any of our officers or directors. This is different than certain other blank check companies in which the sponsor shareholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to our initial business combination.

Use of Proceeds

On November 2, 2021, we consummated the closing of our initial public offering, selling 12,650,000 units, to the public and generating aggregate gross proceeds of $126,500,000. Each unit consists of one Class A ordinary share and one-half warrant, each warrant entitling the holder thereof to purchase one Class A ordinary share for $11.50 per share.

Substantially concurrent with the closing of the initial public offering, we completed the private sale of 4,866,667 warrants to our original sponsor, Cactus Healthcare Management LP, at a purchase price of $1.50 per Private Placement Warrant, generating aggregate gross proceeds to us of $7,300,000.

Following the respective closings, a total of $129,030,000 was placed in a U.S.-based trust account at Bank of America, N.A. maintained by Continental Stock Transfer & Trust Company, acting as trustee.

At the first extension meeting held on April 20, 2023, a total of 10,185,471 Class A ordinary shares were redeemed; accordingly, on May 1, 2023, $106,733,855 was distributed from trust account to the shareholders who redeemed their shares. See “Item 2 - Extension of our Combination Period - First extension” above.

At the second extension meeting held on November 2, 2023, a total of 347,980 Class A ordinary shares were redeemed; accordingly, on November 10, 2023, $3,813,082 was distributed from trust account to the shareholders who redeemed their shares. See “Item2 - Extension of our Combination Period - Second extension” above.

Other than described above, there has been no material change in the planned use of proceeds from such use as described in our final prospectus (File No. 333-258042), dated October 28, 2021, for which the related registration statement on Form S-1 was declared effective by the SEC on October 28, 2021.

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

No.		Description of Exhibit
31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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.

**	Furnished herewith.

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SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Cactus Acquisition Corp. 1 Limited

Date: August 14, 2024	By:	/s/ Gary Challinor
	Name:	Gary Challinor
	Title:	Chief Executive Officer and Principal Financial Officer

SEC Form 10-Q filed by Cactus Acquisition Corp. 1 Limited