CARTICA ACQUISITION CORP ANNOUNCES CONTRIBUTION TO TRUST ACCOUNT FOR EXTENSION AMENDMENT

Rhea-AI Summary

Cartica Acquisition Corp announces a cash contribution of $40,000 per month to its trust account in connection with a shareholder vote to extend the date for completing an initial business combination. The contribution will be made by Cartica Acquisition Partners, until January 7, 2025, if approved.

Insights

Financial Analyst

The announcement by Cartica Acquisition Corp regarding the Sponsor's commitment to contribute cash to the trust account in anticipation of a Charter Extension has notable implications for shareholders and potential investors. The cash infusion is designed to support the company's financial stability during the extended period for completing an initial business combination. In terms of immediate financial impact, the additional funds may reassure investors of the company's liquidity, potentially influencing stock stability or attractiveness in the short term.

However, the dilutive effect on per-share value after redemptions should be carefully considered. The detailed calculation provided, showing the impact of redemptions on per-share value, is critical for investors calculating potential returns. The conditionality of the contribution on the approval of the Charter Extension is also a significant contingency that stakeholders must factor into their assessments. The potential for liquidation if a business combination is not completed by the new deadline introduces a layer of risk that must be weighed against the temporary financial bolstering provided by the Sponsor's contributions.

Market Research Analyst

From a market perspective, Cartica's strategy to extend the deadline for an initial business combination reflects a broader trend within the SPAC (Special Purpose Acquisition Company) market, where sponsors sometimes seek more time to find a suitable merger target. This extension, if approved, could affect investor sentiment, as it suggests that Cartica has yet to secure a business combination, which can be perceived as a lack of viable targets or challenges in finalizing a deal.

The announcement also indicates a mechanism to protect shareholder value through contributions that increase the redemption amount, albeit marginally. This strategy could be interpreted as an incentive for shareholders to remain invested during the extended search period. The nuanced impact on redemption values, depending on the number of public shares redeemed, underscores the complex dynamics at play in SPAC transactions and the importance of shareholder actions in influencing individual investment outcomes.

Legal Expert

The legal implications of Cartica's proposed Charter Extension and the Sponsor's conditional contribution are rooted in the governance structure of SPACs. The requirement for shareholder approval highlights the importance of corporate governance and shareholder rights in such entities. The company's discretion in extending the search period up to January 7, 2025, without accruing interest on the contributions, reflects a contractual agreement between the Sponsor and the company that investors should examine closely.

Additionally, the announcement serves as a reminder of the legal framework governing SPACs, where a failure to complete a business combination within the stipulated timeframe necessitates liquidation. The Sponsor's obligation to contribute additional funds is contingent upon the Charter Extension's approval, emphasizing the role of shareholder voting in determining the company's financial trajectory. The legal stipulations regarding the repayment of the contribution upon a successful business combination or liquidation provide clarity on the Sponsor's exit strategy and the finite nature of the commitment.

NEW YORK, March 22, 2024 /PRNewswire/ -- Cartica Acquisition Corp ("Cartica" or the "Company") (Nasdaq: "CITE", "CITEU", "CITEW") announced today that Cartica Acquisition Partners, LLC (the "Sponsor") will make a cash contribution of an aggregate of $40,000 to Cartica's trust account for each month (as further detailed below), in connection with the shareholder vote to approve an amendment to its charter to extend the date by which Cartica has to complete an initial business combination from April 7, 2024 to January 7, 2025, or such earlier date as determined by the Company's board of directors (the "Charter Extension").

CARTICA ACQUISITION CORP ANNOUNCES CONTRIBUTION TO TRUST ACCOUNT FOR EXTENSION AMENDMENT

As a result of the above change, if the Charter Extension is approved and implemented, the Sponsor or its designees will contribute to the Company as a loan (the "Contributions") an aggregate of $40,000 for each month (commencing on April 7, 2024 and on the 7th day of each subsequent month) until January 7, 2025 (the "Extension Period"), or portion thereof, that is needed to complete an initial business combination, which amount will be deposited into the trust account. Accordingly, the amount paid per share will be reduced proportionately as the amount of public shares which remain outstanding increases after redemptions in connection with the Charter Extension. For example, if Cartica completes an initial business combination on July 7, 2024, which would represent three (3) months and no public shares are redeemed in connection with the Charter Extension, then the aggregate amount deposited per share will be approximately $0.028 per share, with the aggregate maximum contribution to the Trust Account being $120,000. However, if 2,214,415 public shares are redeemed and 2,000,000 public shares remain outstanding after redemptions in connection with the Charter Extension, then the amount deposited per share for such three-month period will be approximately $0.06 per share. Accordingly, if Cartica completes an initial business combination on July 7, 2024, the redemption amount per share at the meeting for an initial business combination or Cartica's subsequent liquidation will be approximately $11.098 (plus any applicable interest accrued) if all of public shares remain outstanding after redemptions, or approximately $11.13 per share (plus any applicable interest accrued) if 2,214,415 public shares are redeemed and 2,000,000 public shares remain outstanding, in comparison to the current redemption amount of approximately $11.07 per share (which amount includes interest not previously released to the Company to pay its taxes).

Any Contribution is conditioned upon the implementation of the Charter Extension. No Contribution will occur if the Charter Extension is not approved or is not completed. The amount of each Contribution will not bear interest and will be repayable by the Company to the Sponsor or its designees upon consummation of its initial business combination. The Company will have the sole discretion whether to continue extending for additional months until January 7, 2025. If the Company opts not to utilize any remaining portion of the Extension Period, then the Company will liquidate and dissolve promptly in accordance with its charter, and its Sponsor's obligation to make additional contributions will terminate.

About Cartica Acquisition Corp

Cartica Acquisition Corp is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.

Forward-Looking Statements

This press release includes forward-looking statements that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. These forward-looking statements and factors that may cause such differences include, without limitation, uncertainties relating to the Company's shareholder approval of the Charter Extension, its inability to complete an initial business combination within the required time period or, and other risks and uncertainties indicated from time to time in filings with the SEC, including Cartica's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 under the heading "Risk Factors" and other documents Cartica has filed, or to be filed, with the SEC. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Cartica expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

Participants in the Solicitation

Cartica and its directors, executive officers, other members of management and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies from the securityholders of Cartica in favor of the approval of the Charter Extension. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of Cartica's directors and officers in the definitive proxy statement dated March 5, 2024 (the "Extension Proxy Statement"), which, when available, may be obtained free of charge from the sources indicated above.

No Offer or Solicitation

This press release shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Charter Extension. This communication shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act or an exemption therefrom.

Additional Information and Where to Find It

Cartica urges investors, shareholders and other interested persons to read the Extension Proxy Statement as well as other documents filed by Cartica with the SEC, because these documents will contain important information about Cartica and the Charter Extension. When available, shareholders may obtain copies of the Extension Proxy Statement, without charge, at the SEC's website at www.sec.gov or by directing a request to: Cartica Acquisition Corporation, c/o Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, 11th Fl. New York, NY 10105.

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SOURCE Cartica Acquisition Corp

FAQ

What is Cartica Acquisition Corp announcing regarding its trust account?

Cartica Acquisition Corp announced a cash contribution of $40,000 per month to its trust account in connection with a shareholder vote to extend the date for completing an initial business combination.

Who will make the cash contribution to Cartica's trust account?

The cash contribution will be made by Cartica Acquisition Partners,

Until when will the cash contributions be made to the trust account?

The cash contributions will be made until January 7, 2025, if approved.

What happens if the Charter Extension is not approved or completed?

No Contribution will occur if the Charter Extension is not approved or is not completed.

Will the Contributions bear interest?

The Contributions will not bear interest and will be repayable by the Company to the Sponsor or its designees upon the consummation of its initial business combination.