Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

References in this Quarterly Report on Form 10-Q (the "Quarterly Report") to "we," "us" or the "Company" refer to Cartesian Growth Corporation II. References to our "management" or our "management team" refer to our officers and directors, and references to the "sponsor" refer to CGC II Sponsor LLC. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the completion of an initial Business Combination (as defined below), the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company's annual report on Form 10-K for the fiscal year ended December 31, 2025 (the "2025 Annual Report") filed with the U.S. Securities and Exchange Commission (the "SEC"), on March 31, 2026. The Company's securities filings can be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company incorporated in the Cayman Islands on October 13, 2021 formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or engaging in any other similar business combination with one or more businesses or entities (the "business combination").

We may pursue our initial business combination in any business industry or sector; however, we have focused on seeking high-growth businesses with proven or potential transnational operations or outlooks in order to capitalize on the experience, reputation, and network of our management team. Furthermore, we seek target businesses where we believe we will have an opportunity to drive ongoing value creation after our initial business combination is completed.

We intend to effectuate our initial business combination using cash from the net proceeds of our initial public offering, the sale of the private placement warrants, the sponsor loan (as defined below), our share capital or a combination of cash, share capital and debt.

We expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete an initial business combination will be successful.

Nasdaq Delisting

On May 6, 2025, we received a letter from the Listing Qualifications Department of The Nasdaq Stock Market ("Nasdaq") stating that Nasdaq had determined that (i) our securities would be delisted from Nasdaq, (ii) trading of our Class A ordinary shares, warrants, and units would be suspended at the opening of business on May 13, 2025 and (iii) a Form 25-NSE will be filed with the SEC, which would remove our securities from listing and registration on Nasdaq, as a result of our failure to complete our initial business combination, within 36 months of the effectiveness of our initial public offering registration statement, or May 5, 2025. We did not appeal Nasdaq's determination to delist our securities. On July 15, 2025, our securities were delisted from Nasdaq and have since been quoted on the over-the-counter market.

First Extension

On November 6, 2023, our shareholders approved an amendment to our amended and restated memorandum and articles of association (the "First Extension Charter Amendment"). The First Extension Charter Amendment extended the date by which we had to consummate a business combination for up to an additional twelve months, from November 10, 2023 to up to November 10, 2024, by electing to extend the date to consummate an initial business combination on a monthly basis for up to twelve times by an additional one month each time, unless the closing of the Company's initial business combination has occurred (which we refer to as the "First Extension" and such applicable later date), without the need for any further approval of our shareholders, provided that the sponsor (or its affiliates or permitted designees) deposited into the trust account for each such one-month extension (the "First Charter Amendment Extension Payments") the lesser of (a) an aggregate of $150,000 and (b) $0.02 per public share that remained outstanding and was not redeemed prior to any such one-month extension, in exchange for a non-interest bearing promissory note payable upon consummation of an initial business combination.

In connection with the votes to approve the First Extension Charter Amendment, the holders of 7,129,439 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.86 per share, for an aggregate redemption amount of approximately $77.4 million, leaving approximately $172.4 million in the trust account following the First Extension Charter Amendment.

Second Extension

On November 6, 2024, our shareholders approved an amendment to our amended and restated memorandum and articles of association (the "Second Extension Charter Amendment" and, together with the First Extension Charter Amendment, the "First and Second Extension Charter Amendments"). The Second Extension Charter Amendment extended the date by which we have to consummate a business combination for up to an additional twelve months, from November 10, 2024 to up to November 5, 2025, by electing to extend the date to consummate an initial business combination on a monthly basis for up to twelve times by an additional one month each time, (other than the first period, which shall consist of 25 days), unless the closing of our initial business combination has occurred (such applicable later date), without the need for any further approval of our shareholders, provided that the sponsor (or its affiliates or permitted designees) will deposit into the trust account (x) for each such one-month period (other than the first period, which shall consist of 25 days) from November 10, 2024 (exclusive) to May 5, 2025, the lesser of (i) an aggregate of $150,000 and (ii) $0.03 per public share that remains outstanding and is not redeemed prior to such one-month (other than the first period, which shall consist of 25 days) extension; and (y) for each such one-month period from May 5, 2025 (exclusive) to November 5, 2025, the lesser of (i) an aggregate of $250,000 and (ii) $0.05 per public share that remains outstanding and is not redeemed prior to such one-month extension (the "Second Charter Amendment Extension Payments"), unless the closing of our initial business combination has occurred, in exchange for a non-interest bearing promissory note payable upon consummation of an initial business combination.

In connection with the votes to approve the Second Extension Charter Amendment, the holders of 8,620,849 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $11.55 per share, for an aggregate redemption amount of $99,613,642, leaving approximately $83,770,196 in the trust account following the Second Extension Charter Amendment.

Third Extension

On November 3, 2025, our shareholders approved an amendment to our amended and restated memorandum and articles of association (the "Third Extension Charter Amendment"). The Third Extension Charter Amendment extended the date by which we have to consummate a business combination from November 5, 2025 to August 5, 2026. In connection with the votes to approve the Third Extension Charter Amendment, the holders of 4,173,618 Class A Ordinary Shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $12.27 per share, for an aggregate redemption amount of $51,219,981.36, leaving $37,750,814.08 in the trust account immediately following the Third Extension Charter Amendment.

Fourth Extension

On July 30, 2026, the Company held an extraordinary general meeting of shareholders (the "Extraordinary Meeting"). The Company's shareholders approved an amendment (the "Fourth Extension Charter Amendment") to the Company's Amended and Restated Memorandum and Articles of Association (as amended, the "Charter"), which became effective solely upon the approval by the Company's shareholders thereof. The Fourth Charter Amendment extended the Termination Date from August 5, 2026 to August 5, 2027. In connection with the votes to approve the Fourth Extension Charter Amendment, the holders of 2,601,058 shares of Class A Ordinary Shares of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $12.50 per share, for an aggregate redemption amount of $32.5 million, leaving $5,940,297.03 in the trust account immediately following the Fourth Extension Charter Amendment.

Removal of Redemption Limitation

On November 6, 2024, our shareholders also approved an amendment to our amended and restated memorandum and articles of association to eliminate (i) the limitation that we shall not redeem the Class A ordinary shares to the extent that such redemption would result in our failure to have net tangible assets of at least $5,000,001, upon consummation of our initial business combination (such limitation, the "Redemption Limitation"), and (ii) the requirement that we shall not consummate an initial business combination unless the Redemption Limitation is not exceeded.

Trust Agreement Amendment

On October 7, 2024, we and the Trustee entered into an amendment to the Investment Management Trust Agreement, dated as of May 5, 2022, to permit the Trustee to hold funds in our trust account in an interest-bearing bank demand deposit account, in addition to investing such funds in U.S. government treasury obligations having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, that invest only in Treasury Obligations. In connection therewith, we directed the Trustee to move the funds held within the trust account, which were previously invested in Treasury Obligations, into an interest-bearing bank demand deposit account.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception through June 30, 2026 were organizational activities and those necessary to prepare for our initial public offering, and since our initial public offering, our activity has been limited to identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We generate non-operating income in the form of interest income on interest-bearing demand deposit held in the trust account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, our initial business combination.

For the three months ended June 30, 2026, we had net loss of $699,615 which consists of a change in the fair value of warrant liabilities of $497,000 and operating costs of $527,434, offset by the interest earned on interest-bearing demand deposit held in the trust account of $235,555 and a change in the fair value of the convertible promissory notes - related party of $89,264.

For the three months ended June 30, 2025, we had net loss of $152,231 which consists of change in the fair value of warrant liabilities of $656,040 and operating costs of $262,245, offset by interest earned on cash and marketable securities held in the trust account of $689,016 and change in the fair value of the convertible promissory note - related party of $77,038.

For the six months ended June 30, 2026, we had net income of $2,395,143 which consists of interest earned on interest-bearing demand deposit held in the trust account of $466,156, change in the fair value of warrant liabilities of $2,650,667 and a change in the fair value of the convertible promissory notes - related party of $48,186, partially offset by operating costs of $769,866.

For the six months ended June 30, 2025, we had net income of $407,633 which consists of interest earned on cash and marketable securities held in the trust account of $1,361,827 and change in the fair value of the convertible promissory note - related party of $81,614, offset by change in the fair value of warrant liabilities of $578,176 and operating costs of $457,632.

Liquidity and Capital Resources

Until the consummation of our initial public offering, our only source of liquidity was an initial purchase of Class B ordinary shares, par value $0.0001 per share by the sponsor and loans from the sponsor.

On May 10, 2022, we consummated the initial public offering of 23,000,000 units, including the full exercise by underwriters of their over-allotment option, at a purchase price of $10.00 per unit, generating total gross proceeds of $230,000,000. Simultaneously with the closing of the initial public offering, we consummated the sale of 8,900,000 private placement warrants, each exercisable to purchase one Class A ordinary share at a price of $11.50 per share, at a price of $1.00 per private placement warrant in a private placement to the sponsor, Cantor Fitzgerald & Co. and Piper Sandler & Co., generating gross proceeds of $8,900,000.

Simultaneously with the consummation of the initial public offering, the sponsor loaned us $4,600,000 at no interest (the "sponsor loan"). The sponsor loan will be repaid or converted into sponsor loan warrants (the "sponsor loan warrants") at a conversion price of $1.00 per sponsor loan warrant, at the sponsor's discretion. The sponsor loan warrants will be identical to the private placement warrants. If we do not complete a business combination, we will not repay the sponsor loan from amounts held in the trust account, and the proceeds held in the trust account will be distributed to the holders of the Class A ordinary shares.

A total of $236,900,000 ($10.30 per unit) of the net proceeds from the initial public offering, including the full exercise of the over-allotment option, the sale of the private placement warrants and the sponsor loan, was placed in the trust account. Transaction costs of the initial public offering amounted to $16,804,728, consisting of $4,600,000 of underwriting commissions, $11,500,000 of deferred underwriting commissions and $704,728 of other offering costs.

For the six months ended June 30, 2026, cash used in operating activities was $263,836. Net income of $2,395,143 was affected by interest earned on interest-bearing demand deposit held in the trust account of $466,156, change in the fair value of warrant liabilities of $2,650,667 and a change in the fair value of the convertible promissory notes - related party of $48,186. Changes in operating assets and liabilities was affected by $506,030 of cash provided for operating activities.

For the six months ended June 30, 2025, cash used in operating activities was $257,068. Net income of $407,633 was affected by interest earned on cash and marketable securities held in the trust account of $1,361,827, change in the fair value of warrant liabilities of $578,176 and a change in the fair value of the convertible promissory note - related party of $81,614. Changes in operating assets and liabilities was affected by $200,564 of cash provided for operating activities.

As of June 30, 2026, we had interest-bearing demand deposit held in the trust account of $38,380,594 (including approximately $25,550,779 of interest income). We may withdraw interest from the trust account to pay taxes, if any. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less any taxes payable), to complete our initial business combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of June 30, 2026, we had cash held outside of the trust account of $149,017 available for working capital needs. We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from 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, and to pay for directors and officers liability insurance premiums.

In order to fund working capital deficiencies or finance transaction costs in connection with a business combination, the sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required (the "working capital loans"). If we complete a business combination, we would repay such loaned amounts. In the event that a business combination does not close, we may use a portion of the funds held outside the trust account to repay such loaned amounts but no proceeds from the trust account would be used for such repayment. Up to $1,500,000 of the working capital loans may be converted into warrants at a price of $1.00 per warrant at the option of the lender. The warrants will be identical to the private placement warrants, including, as to exercise price, exercisability and exercise period. As of June 30, 2026 and December 31, 2025, we had no borrowings under any working capital loans.

On October 12, 2023, January 19, 2024, July 12, 2024, November 6, 2024, December 16, 2024, May 27, 2025, November 19, 2025, December 29, 2025 and May 5, 2026, the Company issued an unsecured promissory note in the principal amount of $500,000 (the "October 2023 Note"), $250,000 (the "January 2024 Note"), $250,000 (the "July 2024 Note"), $250,000 (the "November 2024 Note"), $250,000 (the "December 2024 Note"), $250,000 (the "May 2025 Note"), $250,000 (the "November 2025 Note"), $200,000 (the "December 2025 Note") and $250,000 (the "May 2026 Note" and collectively "Sponsor Notes") respectively, to the Sponsor. The Sponsor Notes do not bear interest and the principal balance will be payable on the earlier to occur of (i) the date on which the Company consummates its initial business combination and (ii) the date that the winding up of the Company is effective (such earlier date, the "Maturity Date"). In the event the Company consummates its initial business combination, the Sponsor has the option on the Maturity Date to convert all or any portion of the principal outstanding under the note into that number of warrants equal to the portion of the principal amount of the note being converted divided by $1.00, rounded up to the nearest whole number.

In connection with the First Charter Amendment Extension Payments described above, on November 6, 2023, we issued an unsecured promissory note in the principal amount of up to $1,800,000, dated November 6, 2023, by the Company in favor of the sponsor (the "First Extension Note"). The First Extension Note bears no interest and the principal balance is payable on the date of the consummation of our initial business combination. The First Extension Note is not convertible into private placement warrants and the principal balance may be prepaid at any time. From November 2023 through October 2024, the Board approved twelve monthly extensions of the Business Combination Period. In connection with the extensions from November 10, 2023 through November 10, 2024, the Company drew an aggregate of $1,800,000 ($150,000 at each extension date) from the First Extension Note which was deposited into the trust account.

In connection with the Second Charter Amendment Extension Payments described above, on November 6, 2024, we issued an unsecured promissory note to the sponsor in the aggregate amount of $2,400,000 ("Second Extension Note"). The Second Extension Note bears no interest and the principal balance is payable on the date of the consummation of our initial business combination. The Second Extension Note is convertible into private placement warrants and the principal balance may be prepaid at any time.

From November 2024 through October 2025, the Board approved twelve monthly extensions of the time period during which the Company may consummate an initial business combination. In connection with the extensions from November 10, 2024 through November 5, 2025, the Company drew an aggregate $2,400,000 ($150,000 at each of the first 6 extension dates and $250,000 at each of the last 6 extensions dates) from the Second Extension Note which was deposited into the trust account.

Going Concern

In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board's ("FASB") Accounting Standards Codification ("ASC") Subtopic 205-40, "Presentation of Financial Statements - Going Concern," management has determined that our liquidity condition and liquidation date raise substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after the applicable Extended Date.

As of June 30, 2026, we had $149,017 in our operating bank account, $38,380,594 in interest-bearing demand deposit held in the trust account to be used for the completion of a business combination and/or for the redemption of the public shares if we are unable to complete a business combination by the applicable extended date (subject to applicable law), and working capital deficit of $5,888,898.

Until the consummation of a business combination or the Company's mandatory liquidation date of August 5, 2027, we will use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from 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, and to pay for directors and officers liability insurance premiums.

In addition, in order to finance transaction costs in connection with a business combination, the sponsor or an affiliate of the sponsor, or certain of our officers and directors may, but are not obligated to, loan us working capital loans.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2026.

Contractual Obligations

We do not have any long-term debt obligations, capital lease obligations, operating lease obligations or other long-term liabilities, other than an agreement to pay the sponsor a sum of $10,000 per month for office space, utilities, secretarial support and administrative services. We began incurring these fees on May 5, 2022 and will continue to incur these fees on a monthly basis until the earlier of the completion of an initial business combination and our liquidation. In addition, the Sponsor or its affiliates may provide the Company with working capital loans pursuant to promissory notes or convertible promissory notes to finance operating and transaction costs and working capital needs. Such loans may be repaid upon consummation of a business combination or, at the lender's discretion, converted into warrants or other securities of the post-business combination entity.

The underwriters of our initial public offering are entitled to a deferred underwriting commission of $0.50 per unit, or $11,500,000 in the aggregate. Subject to the terms of the underwriting agreement for our initial public offering, (i) the deferred underwriting commission was placed in the trust account and will be released to the underwriters only upon the consummation of our initial business combination and (ii) the deferred underwriting commission will be waived by the underwriters in the event that we do not complete a business combination.

We have engaged a legal advisor to provide services related to the consummation of an initial business combination. In connection with this agreement, we may be required to pay the legal advisor's fees in connection with its services contingent upon a successful initial business combination. If a business combination does not occur, we would not be required to pay these contingent fees. There can be no assurance that we will complete a business combination.

Critical Accounting Policies and Estimates

Management's discussion and analysis of our results of operations and liquidity and capital resources are based on our financial information. We describe our significant accounting policies in Note 2 - Summary of Significant Accounting Policies, of the Notes to Financial Statements included in this report. Our financial statements have been prepared in accordance with U.S. GAAP. Certain of our accounting policies require that management apply significant judgments in defining the appropriate assumptions integral to financial estimates. On an ongoing basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. Judgments are based on historical experience, terms of existing contracts, industry trends and information available from outside sources, as appropriate. Some of the more significant estimates are in connection with determining the fair value of the warrant liabilities and convertible promissory notes - related party. However, by their nature, judgments are subject to an inherent degree of uncertainty, and, therefore, actual results could differ from our estimates.

Warrant Liabilities

We account for the warrants issued in connection with the initial public offering, which are discussed in Note 3, Note 4, Note 8 and Note 9 to the financial statements, in accordance with FASB ASC Topic 815-40, "Derivatives and Hedging, Contracts in Entity's Own Equity." Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, we classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement of operations.

Convertible Promissory Notes - Related Party

We account for the Sponsor Loan and Sponsor Notes issued pursuant to convertible promissory note at no interest and a convertible promissory note issued on October 12, 2023 to Sponsor under ASC Topic 815-15-25, "Derivates and Heading - Recognition" ("ASC 815-15-25"). Under ASC 815- 15-25, at the inception of the convertible promissory note, the Company elected to account for such financial instrument under the fair value option. Under the fair value option, convertible promissory notes are required to be recorded at their fair value on the date of issuance, each drawdown date, and at each balance sheet date thereafter. Differences between the face value of the note and the fair value of the note at each drawdown date are recognized as either an expense in the statements of operations (if issued at a premium) or as a capital contribution (if issued at a discount). Changes in the estimated fair value of the notes are recognized as non-cash gains or losses in the statements of operations. The fair value of the conversion option embedded in the convertible promissory notes was valued utilizing the Monte Carlo model. See Note 9 to the financial statements.

Ordinary Shares Subject to Possible Redemption

In accordance with FASB ASC 480-10-S99, redemption provisions not solely within our control require ordinary shares subject to redemption to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity's equity instruments, are excluded from the provisions of FASB ASC 480-10-S99. All of the 3,076,094 Class A ordinary shares contain a redemption feature which allows for the redemption of such public shares in connection with our liquidation, if there is a shareholder vote or tender offer in connection with an initial Business Combination and in connection with certain amendments to our amended and restated memorandum and articles of association. Accordingly, at June 30, 2026, all Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of shareholders' deficit on the balance sheets.

We recognize changes in redemption value immediately as they occur and adjust the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.

Net (Loss) Income Per Ordinary Share

We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share," pursuant to which net (loss) income per share is computed by dividing net (loss) income by the weighted average number of ordinary shares outstanding during the period. We have two classes of shares, which are referred to as redeemable Class A Ordinary Shares and non-redeemable Class A and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. Remeasurement associated with the redeemable Class A ordinary shares is excluded from (loss) income per ordinary share as the redemption value approximates fair value.

Recent Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.

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