Cartiga, LLC and Alchemy Investments Acquisition Corp 1 Announce Business Combination: Key Details, Financials, and Implications for Investors

Overview of the Transaction

Cartiga, LLC, a leading originator and manager of litigation-linked assets, is set to combine with Alchemy Investments Acquisition Corp 1 (“Alchemy”), a publicly listed special purpose acquisition company (SPAC). The transaction is structured as a business combination, with Alchemy intending to file a Registration Statement on Form S-4 with the SEC, which will include detailed proxy materials for shareholders’ consideration.

Key Points for Investors

• Transaction Structure and Valuation: The combined entity will have a pro forma enterprise value of approximately \$633.8 million. The transaction is funded through \$8.7 million in trust cash (assuming no redemptions), a \$40 million PIPE (convertible at \$7.00 per share), and \$540 million in equity consideration to Cartiga members. Pro forma equity value is set at \$582.1 million, with \$120 million in pro forma debt and \$68.3 million in pro forma cash.
• Shareholder Breakdown: Post-combination, Cartiga shareholders will own 93%, Alchemy public shareholders 1%, and Alchemy sponsor & affiliates 6% of the combined company, assuming no redemptions.
• Performance and Financial Highlights:
  • Cartiga has originated over \$2.0 billion in litigation-linked assets, with estimated total lifetime settlement values exceeding \$20 billion.
  • It boasts a 25+ year track record, generating a blended unlevered asset-level IRR of 20%+ on \$1.8B+ of realized investments and strong DPI (Distributions to Paid-In Capital) across vintages.
  • In the last twelve months as of December 31, 2025, Cartiga reported \$16.7 million in EBITDA and \$23.8 million in Adjusted EBITDA. Net income for the period was \$4.7 million with \$11.8 million in adjusted net income. Revenue-earning assets stood at \$520.8 million, and total member equity at \$229.9 million.
  • The company’s origination, realization, and fee revenue from litigation investments have shown strong compound annual growth rates (CAGR) of 56.4%, 12.0%, and 5.3% respectively in recent years.
• Business Model and Market Opportunity:
  • Cartiga focuses on the single-event claim market within the U.S. litigation finance space, targeting collateral-driven investments with managed duration and downside protection.
  • The U.S. legal services market is estimated at \$400 billion (~1.5% of GDP), with total litigation finance assets at only ~\$16 billion, indicating significant room for market penetration and growth.
  • The company leverages a proprietary database containing outcomes for over 250,000 individual claims and scores for over 8,000 attorneys, building machine learning and AI-driven decision-making tools to enhance origination and underwriting.
  • Cartiga positions itself as a consolidator in the rapidly institutionalizing litigation finance market, with a robust pipeline of acquisition targets and a compliance-centric, technology-enabled platform.
• Product Lines:
  • Law Firm Financing: Provides full-recourse working capital loans to law firms, secured by legal fee receivables from portfolios of contingency cases. Historical net charge-offs are below 2% across 20+ years, and realized asset-level IRRs are 18%+, with typical loan sizes ranging from \$25,000 to \$20 million.
  • Consumer Claim Advances: Non-recourse advances to plaintiffs in single-event tort claims, typically at less than 10% LTV. These investments have generated asset-level IRRs of 20%+, with an average advance size of ~\$6,000 and a 28-month average term.
  • Equity Participation via Cartiga Legal, LLC: Through its licensed Arizona law firm, Cartiga can directly participate in case outcomes as co-counsel, giving it direct economic exposure beyond lending returns. It is also exploring MSO (Managed Services Organization) structures to extend its reach and deepen integration with law firms.
• Technology & Data Moat: Cartiga’s platform offers cash flow forecasting, scenario analysis, AI-driven document intelligence, and portfolio analytics. The company is developing a multi-agent AI underwriting engine, expected to launch in FY 2026, which will further automate and streamline the process.
• Regulatory and Institutionalization: Cartiga welcomes greater regulation and aims to set industry standards in compliance and transparency. The company believes institutional capital, technology, and data-driven tools will drive more rational and transparent litigation outcomes, benefitting both plaintiffs and capital providers.
• Management Team: Cartiga and Alchemy bring together seasoned professionals with decades of experience in financial services, asset management, private equity, and litigation finance.

Important Shareholder Considerations & Price-Sensitive Factors

• Transaction Approval and Closing Risks: The business combination is subject to shareholder and regulatory approval. Any significant redemptions, failure to secure approvals, or adverse legal/regulatory developments could impact the likelihood or timing of closing the deal.
• Market Opportunity: Cartiga’s strong historical performance and significant addressable market in the U.S. legal sector may be viewed as highly attractive to investors, potentially supporting higher share valuations post-combination.
• Potential for Consolidation and Growth: The company’s strategy to act as a consolidator in the litigation finance space, combined with its proprietary technology and data capabilities, positions it for further growth and potential accretive acquisitions.
• Financial Transparency: The company discloses that its non-GAAP financial metrics (EBITDA, Adjusted EBITDA, Adjusted Net Income) are not directly comparable to GAAP and may differ from those used by peers. Investors should carefully review reconciliations and understand the limitations of these measures.
• Forward-Looking Risks: The presentation includes forward-looking statements about growth, synergies, and financial projections, all of which are subject to material risks and uncertainties. Factors such as legal proceedings, market changes, regulatory developments, and competition could materially affect outcomes.
• Redemption Risk: The pro forma ownership structure assumes no redemptions from Alchemy public shareholders. Significant redemptions could alter the ownership mix and available capital.
• PIPE Structure: The \$40 million PIPE is structured as a convertible security with a conversion price below the pro forma share price, potentially resulting in dilution if converted.
• Regulatory Environment: Cartiga’s embrace of regulation and compliance may be a competitive advantage as the market matures, but regulatory risks remain.

Conclusion

The proposed business combination between Cartiga, LLC and Alchemy Investments Acquisition Corp 1 represents a significant event in the litigation finance sector, offering investors exposure to a rapidly growing, technology-enabled asset class with a long track record of strong returns and cash generation. The transaction’s outcome, as well as the company’s ability to execute its growth and consolidation strategy, will be key factors to monitor and could have a material impact on share value.

Disclaimer

This article is for informational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any securities. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Investors should refer to official filings and consult with their financial advisors before making any investment decisions.

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