8-K: Alchemy SPAC Unveils Cartiga Merger Investor Presentation

Alchemy Investments Acquisition Corp. 1 filed an investor presentation detailing its proposed business combination with Cartiga, LLC, a leading litigation finance company.

Summary

• Alchemy Investments Acquisition Corp. 1 (a SPAC) is pursuing a business combination with Cartiga, LLC, a data-driven, tech-forward asset management platform.
• Cartiga specializes in investing in legal claims and law firms, operating in a market estimated to be over $300 billion.
• The company's business segments include Law Firm Finance (backed by claims & other legal receivables) and Purchase of Consumer Claim Proceeds.
• Cartiga is supported by over $280 million in committed equity from top global asset managers and institutional investors.
• Key financial metrics for the nine months ended June 30, 2025, include Revenue of $61.292 million, EBITDA of $14.986 million, Adjusted EBITDA of $19.230 million, and Net Income of $5.984 million.
• Cartiga boasts over $1.6 billion in lifetime originations and estimated total settlement values exceeding $20 billion.
• The company reports a blended asset-level Internal Rate of Return (IRR) of 20%+ on realized litigation investments.
• The proposed transaction involves the filing of a Registration Statement on Form S-4 with the SEC, which will include a preliminary proxy statement/prospectus.

Sentiment

Score: 8

Explanation: The filing presents a strong case for Cartiga's business model, market opportunity, and financial performance, highlighting its competitive advantages and growth potential in the context of a proposed SPAC merger. While risks are disclosed, the overall tone and content are highly positive regarding Cartiga's prospects.

Positives

• Cartiga operates in a large and underpenetrated legal services market, estimated at over $300 billion, representing significant growth potential.
• The company benefits from a strong equity base with over $280 million in committed capital from top global asset managers and institutional investors.
• A proprietary claims database with over 10 million data points from 250,000+ outcomes, coupled with advanced analytics, provides a significant competitive advantage and 'data moat'.
• Cartiga has a proven track record of over 20 years in litigation finance, supported by a long-tenured management team with specialized expertise.
• The business model delivers high risk-adjusted returns, with a blended asset-level IRR of 20%+ on realized litigation investments.
• Cartiga's assets exhibit historically low correlations to broader financial markets, offering portfolio diversification benefits.
• The company demonstrated resilience during the COVID-19 pandemic, managing extended asset durations without a significant increase in credit losses, with average durations now returning to 18 months.
• Cartiga maintains a proactive and leadership stance on industry regulation, with a board member on the American Legal Finance Association (ALFA) board and membership in the Alliance for Responsible Consumer Legal Funding (ARC).
• The company utilizes an innovative and scalable technology platform that drives efficiency across customer acquisition, underwriting, asset management, and monetization.

Negatives

• The proposed business combination is subject to various conditions, including shareholder and regulatory approvals, and may not be completed.
• Forward-looking statements contained in the presentation are subject to inherent uncertainties, risks, and changes in circumstances, meaning actual results may differ materially.
• The initial letter of intent for the business combination is non-binding, allowing parties to cease discussions for any reason.
• There is a risk that shareholder redemptions could impact the minimum cash requirement for the Business Combination Agreement, potentially necessitating replacement financing.
• The financial information presented is unaudited and may be adjusted in future SEC filings, and such differences could be material.

Risks

• The occurrence of any event, change, or other circumstances that could give rise to the termination of the Business Combination Agreement.
• The outcome of any legal proceedings that may be instituted against Alchemy or Cartiga following the announcement of the Business Combination Agreement.
• The inability to complete the proposed Business Combination due to failure to obtain approval of the shareholders of Alchemy or members of Cartiga, certain regulatory approvals, or satisfy other conditions to closing.
• The failure to meet the minimum cash requirement of the Business Combination Agreement due to Alchemy shareholder redemptions and the failure to obtain replacement financing.
• The inability to obtain or maintain the listing of Alchemy's ordinary shares on Nasdaq following the proposed Business Combination.
• The risk that the proposed Business Combination disrupts current plans and operations as a result of its announcement and consummation.
• The ability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by competition, Cartiga's ability to grow and manage growth profitably, and retain its key employees.
• Costs related to the proposed Business Combination.
• Changes in applicable laws or regulations.
• The possibility that Alchemy or Cartiga may be adversely affected by other economic, business, and/or competitive factors.
• Risks relating to the uncertainty of the projected financial information with respect to Pubco (the combined company).
• Risks related to the organic and inorganic growth of Cartiga's business and the timing of expected business milestones.
• The amount of redemption requests made by Alchemy's shareholders.

Future Outlook

The combined company anticipates achieving significant benefits from the Business Combination, including expected synergies, revenue opportunities, and continued growth in financial and operating performance. Cartiga plans to expand its data and service product offerings, pursue industry consolidation by acquiring smaller platforms, enhance sophisticated lead generation capabilities, and launch new funds. Future innovations include attorney practice enhancement tools, deployment of AI, and subscription models for practice management solutions, all aimed at accelerating the scale of its multi-product asset base.

Management Comments

• Our Mission: To power outstanding results for law firms and their clients.
• Cartiga is one of the strongest capitalized companies in the Litigation Finance sector.
• The senior management team is composed of experienced legal industry and finance professionals, with its CFO bringing public company CFO experience.
• We welcome the introduction of regulation, seeing it as a positive step that will bring more legitimacy and continued growth to the industry, create a level playing field, and protect our long-term interests.

Industry Context

The litigation finance industry is experiencing outsized growth and demonstrates low correlation to major asset classes, making it an attractive sector. The legal services industry, despite its substantial contribution to GDP, remains significantly underpenetrated by traditional financial markets. Cartiga positions itself to capitalize on this 'white-space' by providing essential capital, technology, and data-driven insights to law firms and plaintiffs, thereby leveling the playing field against well-capitalized insurance companies.

Comparison to Industry Standards

• Cartiga's assets deliver high risk-adjusted returns (20%+ blended asset-level IRR) which are presented as outperforming the Merrill Lynch High-Yield Bond Index.
• The company's asset yields are benchmarked against various securities including US 2-Year Treasuries, Single-A Bond Index, High Yield Bond Index, LC Consumer Loans, BDCs, and Burford Capital.
• Cartiga's capital base of over $280 million in committed equity is highlighted as positioning it among the strongest capitalized companies in the litigation finance sector when compared to other publicly traded entities.
• The predictability of Cartiga's cash gains on litigation finance receipts is compared to publicly disclosed data from Burford Capital (NYSE: BUR) and Omni Bridgeway Ltd. (ASX: OBL).

Corporate Governance

Legal Proceedings

• The filing identifies a risk of 'any legal proceedings that may be instituted against the Parent or the Company following the announcement of the Business Combination Agreement and the transactions contemplated therein.' This is a forward-looking risk associated with the merger announcement, not a current proceeding.

Stakeholder Impact

• Shareholders of Alchemy Investments Acquisition Corp. 1 will vote on the Business Combination and will become shareholders of the combined entity, subject to potential dilution or redemption risks.
• Shareholders of Cartiga, LLC will become shareholders of the combined public entity.
• Law firms, as Cartiga's clients, will benefit from enhanced access to capital, technology, and data-driven insights to cover litigation costs, pursue growth, and optimize their practices, potentially leading to higher success rates and better financial management.
• Plaintiffs, as Cartiga's clients, will gain access to non-recourse advances, enabling them to avoid low-ball settlement offers and pursue fair outcomes, potentially realizing higher net proceeds from litigation.
• Employees of Cartiga will be impacted by the combined company's ability to grow profitably and retain key personnel, which is a factor in the success of the Business Combination.
• Regulatory bodies are acknowledged, with Cartiga actively participating in industry trade organizations to promote responsible regulation, indicating a positive relationship with regulators.

Next Steps

• Alchemy intends to file a Registration Statement on Form S-4, including a preliminary proxy statement/prospectus, with the SEC.
• Alchemy will mail a definitive proxy statement and proxy card to shareholders for a Special Meeting relating to the transaction.
• Cartiga plans to expand its data and service products, pursue industry consolidation, expand sophisticated lead generation, and launch funds.
• Future innovations include attorney practice enhancement, AI tools, and subscription models for practice management solutions.

Key Dates

Recommendation

The proposed business combination with Cartiga presents a compelling investment opportunity. Cartiga operates in a large, underpenetrated market with a proven, tech-driven business model delivering high risk-adjusted returns (20%+ IRR) and strong financial performance (YTD Revenue $61.3M, Adjusted EBITDA $19.2M). The company's proprietary data, strong capital base, and experienced management team provide significant competitive advantages and a clear path for future growth through product innovation and industry consolidation. While the merger is subject to customary approvals and risks, the underlying business fundamentals and market position of Cartiga are highly attractive.

Keywords

Alchemy Investments Acquisition Corp 1, Cartiga LLC, SPAC, Business Combination, Litigation Finance, Legal Claims Investment, Asset Management, Financial Technology, SEC Filing, Form 8-K, Investor Presentation, Merger, De-SPAC