CHENGHE ACQUISITION III CO. FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2026
Chenghe Acquisition III Co. (the “Company”) filed its Form 10-Q for the quarter ended March 31, 2026. The Company reported a net loss of $1.4 million for the quarter, primarily due to operating expenses of $1.3 million. As of March 31, 2026, the Company had cash and cash equivalents of $14.4 million and a total shareholders’ deficit of $12.6 million. The Company’s condensed balance sheet as of March 31, 2026, showed total assets of $16.8 million and total liabilities of $29.4 million. The Company’s management’s discussion and analysis of financial condition and results of operations highlights the Company’s focus on identifying and acquiring a target business, as well as its efforts to reduce operating expenses and conserve cash.
Overview
The report provides an overview of a blank check company, also known as a special purpose acquisition company (SPAC), that was formed in June 2024 for the purpose of completing a merger, asset acquisition, or similar business combination with another company. The company recently completed its initial public offering (IPO) in September 2025, raising $126.5 million by selling 12.65 million units at $10 per unit. Each unit consists of one Class A ordinary share and one-half of one redeemable warrant.
Recent Developments
The key recent developments include:
- Completion of the IPO on September 17, 2025, raising $126.5 million.
- Simultaneous sale of 408,000 private placement units at $10 per unit, raising an additional $4.08 million.
- Total transaction costs of $9.07 million, including underwriting fees and other offering costs.
- Announcement on November 10, 2025 that the company’s units would begin trading separately as Class A ordinary shares and warrants.
Results of Operations
The company has not yet engaged in any operations or generated any revenue. Its activities have been limited to organizational tasks, preparing for the IPO, and identifying potential acquisition targets. The company reported:
- Net income of $884,748 for the three months ended March 31, 2026, primarily due to interest earned on the cash held in the trust account.
- Net loss of $19,632 for the three months ended March 31, 2025, consisting of formation, general, and administrative costs.
Liquidity and Capital Resources
As of March 31, 2026, the company had:
- $128.9 million in the trust account, including $1.06 million in interest income.
- $593,663 in cash outside the trust account, with working capital of $453,294.
- An accumulated deficit of $4.61 million and shareholders’ deficit of $4.61 million.
The company plans to use the funds in the trust account to complete its initial business combination. It may also receive loans from the co-sponsors, officers, directors, or their affiliates to fund working capital needs or transaction costs, which would be repaid upon the completion of a business combination.
The report notes that the company’s current lack of liquidity raises substantial doubt about its ability to continue as a going concern, and it plans to consummate a business combination before the mandatory liquidation date.
Off-Balance Sheet Arrangements and Contractual Obligations
The company has no off-balance sheet arrangements. Its only significant contractual obligation is an agreement to pay $15,000 per month for office space, secretarial, and administrative services until the completion of its initial business combination or liquidation.
The underwriters of the IPO are also entitled to a deferred underwriting commission payable upon the closing of a business combination, which could create potential conflicts of interest.
Critical Accounting Policies and Recent Accounting Standards
The company’s critical accounting policies and estimates are not yet significant, as it has not commenced operations. The report also discusses the company’s evaluation of recent accounting standards, including those related to expense disaggregation disclosures, which are not expected to have a material impact on the financial statements.
