Cartica Swings to Profit Amidst Trust Account Shrinkage

TL;DR

**Cartica's profit is a mirage from warrant revaluations; the shrinking trust account and extended deadline scream 'find a deal or liquidate'.**

AI Summary

Cartica Acquisition Corp (CAC) reported a net income of $2,714,017 for the nine months ended September 30, 2025, a significant improvement from a net loss of $7,815,226 in the same period of 2024. This turnaround was primarily driven by a positive change in the fair value of warrant liabilities, which contributed $3,288,000 in income for the nine months ended September 30, 2025, compared to a $3,403,000 expense in 2024. Revenue, in the form of interest earned on the Trust Account, decreased to $514,927 for the nine months ended September 30, 2025, from $1,264,295 in 2024. Operating and formation costs also saw a substantial reduction, falling to $1,088,910 from $5,676,521 year-over-year. The company's cash held in the Trust Account declined from $26,355,736 as of December 31, 2024, to $16,794,222 as of September 30, 2025, largely due to redemptions of Class A ordinary shares totaling $10,561,755 during the nine-month period. Total assets decreased from $26,378,456 to $16,797,306 over the same period, while total liabilities decreased from $14,614,600 to $12,881,188. The company extended its Combination Period to February 7, 2026, indicating ongoing efforts to find a business combination.

Why It Matters

For investors, Cartica's shift to a net income of $2.7 million for the nine months ended September 30, 2025, is a positive sign, though largely driven by non-operating warrant revaluations. The significant reduction in the Trust Account from $26.3 million to $16.7 million due to redemptions signals waning investor confidence or a lack of compelling acquisition targets, which could impact the viability of a future business combination. The extension of the Combination Period to February 7, 2026, provides more time but also prolongs uncertainty, potentially making it less attractive compared to other SPACs with clearer paths or stronger trust balances. This competitive context means Cartica needs to secure a high-quality target soon to retain remaining capital and deliver value.

Risk Assessment

Risk Level: high — The company's cash held in the Trust Account decreased significantly from $26,355,736 at December 31, 2024, to $16,794,222 at September 30, 2025, primarily due to $10,561,755 in redemptions. This substantial reduction in available capital increases the risk of not being able to complete a sufficiently sized or attractive business combination. Furthermore, the extension of the Combination Period to February 7, 2026, indicates ongoing difficulty in securing a target, raising concerns about the company's long-term prospects.

Analyst Insight

Investors should exercise extreme caution and consider exiting their positions given the substantial redemptions and the prolonged search for a business combination. The positive net income is largely non-operational, masking underlying challenges in capital retention and deal sourcing. Monitor for any definitive business combination announcements, but assume a high risk of liquidation.

Financial Highlights

debt To Equity

N/A

revenue

$514,927

operating Margin

N/A

total Assets

$16,797,306

total Debt

$12,881,188

net Income

$2,714,017

eps

N/A

gross Margin

N/A

cash Position

$16,794,222

revenue Growth

-59.3%

Revenue Breakdown

Key Numbers

• $2.71M — Net Income (For nine months ended September 30, 2025, a swing from a $7.82M loss in 2024.)
• $16.79M — Cash in Trust Account (As of September 30, 2025, down from $26.36M at December 31, 2024.)
• $10.56M — Redemptions (Cash withdrawn from Trust Account for redemptions during the nine months ended September 30, 2025.)
• $3.29M — Change in Fair Value of Warrant Liabilities (Positive impact on net income for nine months ended September 30, 2025.)
• $1.09M — Operating and Formation Costs (For nine months ended September 30, 2025, significantly reduced from $5.68M in 2024.)
• 5,677,559 — Class A Ordinary Shares Outstanding (As of November 14, 2025.)
• 1,348,096 — Class A Ordinary Shares Subject to Redemption (As of September 30, 2025, down from 2,249,422 at December 31, 2024.)
• $12.46 — Redemption Value per Share (As of September 30, 2025.)
• February 7, 2026 — Combination Period End Date (Extended deadline for completing a business combination.)

Key Players & Entities

• Cartica Acquisition Corp (company) — registrant
• Cartica Acquisition Partners, LLC (company) — Sponsor
• Continental Stock Transfer & Trust Company (company) — trustee for the Trust Account
• SEC (regulator) — U.S. Securities and Exchange Commission
• $2,714,017 (dollar_amount) — Net income for nine months ended September 30, 2025
• $7,815,226 (dollar_amount) — Net loss for nine months ended September 30, 2024
• $16,794,222 (dollar_amount) — Cash held in Trust Account as of September 30, 2025
• $26,355,736 (dollar_amount) — Cash held in Trust Account as of December 31, 2024
• $10,561,755 (dollar_amount) — Cash withdrawn from Trust Account in connection with redemptions for nine months ended September 30, 2025
• February 7, 2026 (date) — Extended Combination Period deadline

FAQ

Risk Factors

• Dependence on Business Combination [high — financial]: Cartica Acquisition Corp. is a blank check company with no commercial operations. Its success is entirely dependent on identifying and completing a business combination. The company has extended its Combination Period to February 7, 2026, indicating ongoing efforts and potential challenges in finding a suitable target.
• Redemptions Impacting Trust Account [high — financial]: Shareholders redeemed $10,561,755 of Class A ordinary shares during the nine months ended September 30, 2025. This significantly reduced the cash held in the Trust Account from $26,355,736 to $16,794,222, impacting the company's available capital for a business combination.
• Fair Value of Warrant Liabilities [medium — financial]: The net income for the nine months ended September 30, 2025, was significantly influenced by a $3,288,000 gain from the change in fair value of warrant liabilities. This is a non-cash item and its volatility can lead to unpredictable earnings.
• High Operating and Formation Costs [medium — operational]: Despite a reduction, operating and formation costs for the nine months ended September 30, 2025, were $1,088,910, down from $5,676,521 in the prior year. These costs, while reduced, still represent a significant outflow of capital.
• Shareholder Deficit [medium — financial]: The company has a total shareholders' deficit of $12,878,105 as of September 30, 2025. This indicates that the company's liabilities and redemptions have exceeded its paid-in capital and accumulated earnings.

Industry Context

Cartica Acquisition Corp. operates within the Special Purpose Acquisition Company (SPAC) sector. This industry is characterized by companies formed to raise capital through an IPO for the purpose of acquiring an existing company. The SPAC market has seen significant volatility, with increased regulatory scrutiny and a challenging environment for completing business combinations within mandated timelines.

Regulatory Implications

SPACs face evolving regulatory landscapes, including increased scrutiny from the SEC regarding disclosures, financial reporting, and potential conflicts of interest. Cartica Acquisition Corp.'s extension of its combination period and the significant redemptions highlight the pressures SPACs face to execute deals under these conditions.

What Investors Should Do

1. Monitor Business Combination Progress
2. Assess Impact of Redemptions
3. Understand Warrant Liability Volatility

Key Dates

• 2025-09-30: Nine Months Ended — Reported net income of $2.71M, a significant swing from a $7.82M loss in the prior year, driven by warrant liability fair value changes.
• 2025-09-30: Cash in Trust Account — Decreased to $16.79M from $26.36M at year-end 2024, primarily due to $10.56M in redemptions.
• 2025-11-14: Class A Ordinary Shares Outstanding — 5,677,559 shares outstanding as of this date.
• 2026-02-07: Combination Period End Date — Extended deadline for Cartica Acquisition Corp. to complete a business combination, indicating ongoing search and potential challenges.

Glossary

Trust Account

A segregated account, typically holding proceeds from an IPO, used by special purpose acquisition companies (SPACs) to fund a business combination and protect investor capital. (The primary asset of Cartica Acquisition Corp., generating interest income and subject to redemptions.)

Class A Ordinary Shares Subject to Redemption

Shares that holders can elect to redeem for a pro-rata share of the Trust Account balance upon certain events, typically a business combination or liquidation. (Redemptions of these shares significantly reduced the Trust Account balance and impacted the company's capital.)

Warrant Liabilities

Financial instruments that give the holder the right, but not the obligation, to purchase shares of the company at a specified price within a certain timeframe. Changes in their fair value can impact net income. (A significant driver of the net income swing, contributing $3.29M in income for the period.)

Combination Period

The timeframe within which a SPAC must complete a business combination. If not completed, the SPAC typically liquidates. (The extension of this period to February 7, 2026, signals the company's continued efforts to find a target.)

Shareholders' Deficit

A situation where a company's total liabilities exceed its total assets, resulting in a negative equity position. (Cartica Acquisition Corp. has a substantial shareholders' deficit of $12.88M as of September 30, 2025.)

Year-Over-Year Comparison

Cartica Acquisition Corp. has shown a dramatic improvement in net income, swinging from a $7.82 million loss in the first nine months of 2024 to a $2.71 million profit in the same period of 2025. This turnaround is largely attributable to a $3.29 million gain from the change in fair value of warrant liabilities, compared to a $3.40 million expense in the prior year. Revenue from interest earned on the Trust Account decreased by 59.3% to $514,927, reflecting the impact of redemptions. Operating and formation costs were significantly reduced, falling from $5.68 million to $1.09 million, which also contributed to the improved net income. Total assets and cash in the Trust Account have decreased substantially due to shareholder redemptions.

Key Financial Figures

• $0.0001 — ,559 Class A ordinary shares, par value $0.0001 per share, and 1,000,000 Class B ordina

Filing Documents

• cite-20250930x10q.htm (10-Q) — 1349KB
• cite-20250930xex31d1.htm (EX-31.1) — 13KB
• cite-20250930xex31d2.htm (EX-31.2) — 13KB
• cite-20250930xex32d1.htm (EX-32.1) — 7KB
• cite-20250930xex32d2.htm (EX-32.2) — 7KB
• 0001104659-25-112480.txt ( ) — 6929KB
• cite-20250930.xsd (EX-101.SCH) — 62KB
• cite-20250930_cal.xml (EX-101.CAL) — 20KB
• cite-20250930_def.xml (EX-101.DEF) — 287KB
• cite-20250930_lab.xml (EX-101.LAB) — 436KB
• cite-20250930_pre.xml (EX-101.PRE) — 386KB
• cite-20250930x10q_htm.xml (XML) — 1106KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements . Condensed Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 1 Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 2 Condensed Statements of Changes in Shareholders' Deficit for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 3 Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) 4 Notes to Condensed Financial Statements (Unaudited) 5

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

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . 30

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk . 37

Controls and Procedures

Item 4. Controls and Procedures . 37

- OTHER INFORMATION

PART II - OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings . 38

Risk Factors

Item 1A. Risk Factors . 38

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds . 38

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities . 38

Mine Safety Disclosures

Item 4. Mine Safety Disclosures . 39

Other Information

Item 5. Other Information . 39

Exhibits

Item 6. Exhibits . 40

SIGNATURES

SIGNATURES 41 Table of Contents

- FINANCIAL INFORMATION

PART I- FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. CARTICA ACQUISITION CORP CONDENSED BALANCE SHEETS September 30, 2025 December 31, 2024 (unaudited) Assets Current assets Cash $ 1,942 $ 1,927 Prepaid expenses 1,142 20,793 Total Current Assets 3,084 22,720 Cash held in Trust Account 16,794,222 26,355,736 Total Assets $ 16,797,306 $ 26,378,456 Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders' Deficit Current liabilities Accounts payable and accrued expenses $ 5,480,438 $ 5,058,100 Promissory notes – related party 3,290,750 2,158,500 Total Current Liabilities 8,771,188 7,216,600 Warrant liabilities 4,110,000 7,398,000 Total Liabilities 12,881,188 14,614,600 Commitments and Contingencies (Note 6) Class A ordinary shares subject to possible redemption 1,348,096 and 2,249,422 shares at redemption value of $ 12.46 and $ 11.72 as of September 30, 2025 and December 31, 2024, respectively 16,794,223 26,355,736 Shareholders' Deficit Preference shares, $ 0.0001 par value; 1,000,000 shares authorized; none issued or outstanding — — Class A ordinary shares, $ 0.0001 par value; 300,000,000 shares authorized; 4,750,000 issued and outstanding (excluding 1,348,096 and 2,249,422 shares subject to possible redemption) at September 30, 2025 and December 31, 2024, respectively 475 475 Class B ordinary shares, $ 0.0001 par value; 30,000,000 shares authorized; 1,000,000 shares issued and outstanding at September 30, 2025 and December 31, 2024 100 100 Additional paid-in capital 363,493 1,363,735 Accumulated deficit ( 13,242,173 ) ( 15,956,190 ) Total Shareholders' Deficit ( 12,878,105 ) ( 14,591,880 ) Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders' Deficit $ 16,797,306 $ 26,378,456 The accompanying notes are an integral part of the unaudited condensed financial statements. 1 Table of Contents CARTICA ACQU

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