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Item 1. Financial Statements

2026-08-11 compared with 2026-05-15 · 803 added, 449 removed, 37 unchanged (97% of the section changed)

Financial Statements

CARTESIAN GROWTH CORPORATION III

CONDENSED BALANCE SHEETS

FACTORIAL ENERGY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share and per share data)

June 30, 2026 December 31, 2025

Current assets:

Prepaid insurance - current

Prepaid expenses

Cash and cash equivalents $ 112,831 $ 28,891

Receivables under collaboration agreements (includes $ 0 and $ 1,000 as related party as of June 30, 2026 and December 31, 2025, respectively)

Deferred transaction costs — 1,423

Prepaid expenses and other current assets (includes $ 720 and $ 1,110 as related party as of June 30, 2026, and December 31, 2025, respectively)

Total current assets 115,601 32,891

Prepaid insurance – long term

Investments held in Trust Account

Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit

Restricted cash 886 881

Property and equipment, net 19,218 21,276

Operating lease right-of-use assets, net 6,949 7,576

Other non-current assets (related party) — 160

Total Assets $ 142,654 $ 62,784

Liabilities, Redeemable Convertible Preferred Stock & Stockholders’ Equity (Deficit)

Current liabilities:

Accrued offering costs

Accounts payable (includes $ 2 and $ 190 as related party, as of June 30, 2026, and December 31, 2025, respectively)

Accrued expenses 4,435 2,981

Operating lease liabilities, current portion 1,445 1,357

Total current liabilities 6,600 5,079

Deferred underwriting fee

Operating lease liabilities, net of current portion 6,439 7,180

Convertible promissory notes – related parties, at fair value — 18,889

Warrant liabilities for Series B-1 and Series D redeemable convertible preferred stock (includes $ 2,770 to related parties as of December 31, 2025)

Warrant liability for Series A Common Stock 44,616 —

Total liabilities 57,655 34,526

Commitments and contingencies (Note 9)

Class A ordinary shares subject to possible redemption, 27,600,000 shares at redemption value of approximately $ 10.36 and $ 10.27 per share as of March 31, 2026 and December 31, 2025, respectively

Shareholders’ Deficit

Preference shares, $ 0.0001 par value;

1,000,000 shares authorized;

none issued and outstanding

Class A ordinary shares, $ 0.0001 par value;

Redeemable convertible preferred stock (Note 10):

Series A-1 redeemable convertible preferred stock, $ 0.00001 par value;

4,528,900 shares authorized, issued and outstanding as of December 31, 2025.

Liquidation preference of $ 3,000 as of December 31, 2025.

Series A-2 redeemable convertible preferred stock, $ 0.00001 par value;

8,665,524 shares authorized, issued and outstanding as of December 31, 2025.

Liquidation preference of $ 6,000 as of December 31, 2025.

Series B-1 redeemable convertible preferred stock, $ 0.00001 par value;

10,045,799 shares authorized;

none issued and outstanding (excluding 27,600,000 shares subject to possible redemption as of March 31, 2026 and December 31, 2025, respectively)

Class B ordinary shares, $ 0.0001 par value;

9,972,682 shares issued and outstanding as of December 31, 2025, and 2025 Liquidation preference of $ 22,166 as of December 31, 2025.

Series C-1 redeemable convertible preferred stock, $ 0.00001 par value;

13,098,851 shares authorized, issued and outstanding as of December 31, 2025.

Liquidation preference of $ 28,423 as of December 31, 2025.

Series C-2 redeemable convertible preferred stock, $ 0.00001 par value;

9,221,245 shares authorized, issued and outstanding as of December 31, 2025, and 2025.

Liquidation preference of $ 26,857 as of December 31, 2025.

FACTORIAL ENERGY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)

(In thousands, except share and per share data)

June 30, 2026 December 31, 2025

Series D redeemable convertible preferred stock, $ 0.00001 par value;

27,974,242 shares authorized;

6,900,000 shares issued and outstanding as of March 31, 2026 and December 31, 2025

21,827,755 shares issued and outstanding as of December 31, 2025.

Liquidation preference of $ 202,385 as of December 31, 2025.

Total redeemable convertible preferred stock — 249,652

Stockholders’ equity (deficit):

Preferred stock, $ 0.00001 par value, 100,000,000 shares authorized, and no shares issued or outstanding as of June 30, 2026.

No shares were authorized, issued, or outstanding as of December 31, 2025.

Series A Common Stock, $ 0.00001 par value;

600,000,000 and 32,000,000 shares authorized as of June 30, 2026 and December 31, 2025, respectively.

91,510,501 and 18,486,699 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively.

Series B Common Stock, $ 0.00001 par value;

50,000,000 shares authorized as of June 30, 2026.

15,512,742 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively.

Additional paid-in capital 361,299 34,625

Accumulated deficit ( 275,492 ) ( 255,576 )

( 14,009,286 )

Accumulated other comprehensive loss ( 819 ) ( 445 )

Total stockholders’ equity (deficit) 84,999 ( 221,394 )

Total Liabilities, Redeemable Convertible Preferred Stock & Stockholders’ Equity (Deficit) $ 142,654 $ 62,784

See accompanying notes to the unaudited condensed consolidated financial statements.

FACTORIAL ENERGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

(In thousands, except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Total Shareholders’ Deficit

Operating expenses:

Research and development, net (includes $ 10 and $ 140 for the three months ended June 30, 2026 and 2025, respectively;

and $ 10 and $ 165 for the six months ended June 30, 2026 and 2025, respectively, of related party research and development reimbursement)

$ ( 6,582 ) $ ( 6,745 ) $ ( 8,524 ) $ ( 13,499 )

Selling, general and administrative (includes $ 65 and $ 44 for the three months ended June 30, 2026 and 2025, respectively;

and $ 153 and $ 88 for the six months ended June 30, 2026 and 2025, respectively, of related party expenses)

( 6,379 ) ( 4,657 ) ( 10,928 ) ( 11,025 )

Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit

The accompanying notes are an integral part of these unaudited condensed financial statements.

CARTESIAN GROWTH CORPORATION III

CONDENSED STATEMENTS OF OPERATIONS

For the Three Months Ended March 31,

General and administrative costs

Total operating expenses ( 12,961 ) ( 11,402 ) ( 19,452 ) ( 24,524 )

Loss from operations ( 12,961 ) ( 11,402 ) ( 19,452 ) ( 24,524 )

Other income:

Interest earned on investments held in Trust Account

Net income (loss)

Basic weighted average shares outstanding, Class A ordinary shares subject to redemption

Basic and diluted net income (loss) per share, Class A ordinary shares subject to redemption

Basic and diluted weighted average shares outstanding, Class B ordinary shares

Basic and diluted net income (loss) per share, Class B ordinary shares

The accompanying notes are an integral part of these unaudited condensed financial statements.

CARTESIAN GROWTH CORPORATION III

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2026

Ordinary Shares

Shareholders’

Balance – December 31, 2025

( 13,197,985 )

( 13,197,295 )

Remeasurement of Class A ordinary shares to redemption amount

( 2,491,718 )

Other income (expense), net:

Financing costs related to issuance of convertible promissory notes – related parties — — ( 37 ) —

Change in fair value of convertible promissory notes – related parties ( 2,384 ) — ( 3,791 ) —

Change in fair value of convertible promissory notes ( 964 ) — ( 1,264 ) —

Change in fair value of Series B-1 and Series D warrant liabilities (includes related party loss of $ 229 and $ 0 for the three months ended June 30, 2026 and 2025, respectively;

and $ 262 and $ 0 for the six months ended June 30, 2026 and 2025, respectively)

( 293 ) — ( 399 ) —

Change in fair value of warrant liability for Series A Common Stock 4,738 — 4,738 —

Other income, net 523 833 289 1,085

Total other income (expenses), net 1,620 833 ( 464 ) 1,085

Loss before income taxes $ ( 11,341 ) $ ( 10,569 ) $ ( 19,916 ) $ ( 23,439 )

Income tax expense — — — —

Net loss $ ( 11,341 ) $ ( 10,569 ) $ ( 19,916 ) $ ( 23,439 )

Net loss attributable to common stockholders - basic $ ( 11,341 ) $ ( 10,569 ) $ ( 19,916 ) $ ( 23,439 )

Net loss attributable to common stockholders - diluted $ ( 16,079 ) $ ( 10,569 ) $ ( 24,654 ) $ ( 23,439 )

Net loss per share attributable to common stockholders - basic $ ( 0.61 ) $ ( 0.57 ) $ ( 1.07 ) $ ( 1.27 )

Net loss per share attributable to common stockholders - diluted $ ( 0.85 ) $ ( 0.57 ) $ ( 1.32 ) $ ( 1.27 )

Weighted-average common stock outstanding - basic 18,594,006 18,423,699 18,571,685 18,486,699

Weighted-average common stock outstanding - diluted 18,934,279 18,423,699 18,742,761 18,486,699

Other comprehensive loss:

Foreign currency translation adjustments ( 76 ) ( 182 ) ( 374 ) ( 174 )

Comprehensive loss $ ( 11,417 ) $ ( 10,751 ) $ ( 20,290 ) $ ( 23,613 )

See accompanying notes to the unaudited condensed consolidated financial statements.

FACTORIAL ENERGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) ( UNAUDITED )

(In thousands, except share data)

Preferred Stock

$ 0.00001 Par Value

Series A Common Stock

$ 0.00001 Par Value

Series B Common Stock

$ 0.00001 Par Value

Additional Paid-In Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders’

Equity (Deficit)

Shares Amount Shares Amount Shares Amount

Balance, December 31, 2025, as recast for the reverse recapitalization 67,314,957 $ 249,652 2,973,957 $ — 15,512,742 $ 2 $ 34,625 $ ( 255,576 ) $ ( 445 ) $ ( 221,394 )

Issuance of Series A Common Stock from stock option exercises — — 107,308 — — — 90 — — 90

Stock based compensation — — — — — — 1,534 — — 1,534

Foreign currency translation adjustments — — — — — — — — ( 298 ) ( 298 )

Net loss — — — — — — — ( 8,575 ) — ( 8,575 )

Balance, March 31, 2026 67,314,957 $ 249,652 3,081,265 $ — 15,512,742 $ 2 $ 36,249 $ ( 264,151 ) $ ( 743 ) $ ( 228,643 )

( 14,009,286 )

( 14,008,596 )

FOR THE THREE MONTHS ENDED MARCH 31, 2025

Ordinary Shares

Shareholders’

Balance – January 1, 2025 (1)(2)

Conversion of redeemable convertible preferred stock into Series A Common Stock ( 67,314,957 ) ( 249,652 ) 67,314,957 7 — — 249,645 — — 249,652

Issuance of common stock in connection with reverse recapitalization and PIPE Financing, net of issuance costs — — 21,114,279 2 — — 123,721 — — 123,723

Reclassification of warrant liability for Series A Common Stock from equity — — — — — — ( 49,354 ) — — ( 49,354 )

Stock based compensation — — — — — — 1,038 — — 1,038

Foreign currency translation adjustments — — — — — — — — ( 76 ) ( 76 )

Net loss — — — — — — — ( 11,341 ) — ( 11,341 )

Balance, June 30, 2026 — $ — 91,510,501 $ 9 15,512,742 $ 2 $ 361,299 $ ( 275,492 ) $ ( 819 ) $ 84,999

Preferred Stock

$ 0.00001 Par Value

Series A Common Stock

$ 0.00001 Par Value

Series B Common Stock

$ 0.00001 Par Value

Additional Paid-In Capital Accumulated

Deficit Accumulated

Comprehensive

Income (Loss) Total

Stockholders’

Shares Amount Shares Amount Shares Amount

Balance, December 31, 2024, as recast for the reverse recapitalization 67,314,957 $ 249,652 2,888,163 $ — 15,512,742 $ 2 $ 25,157 $ ( 181,731 ) $ 76 $ ( 156,496 )

Issuance of Series A Common Stock from stock option exercises — — 1,101 — — — 2 — — 2

Stock based compensation — — — — — — 3,857 — — 3,857

Foreign currency translation adjustments — — — — — — — — 8 8

Net loss — — — — — — — ( 12,870 ) — ( 12,870 )

Balance, March 31, 2025 67,314,957 $ 249,652 2,889,264 $ — 15,512,742 $ 2 $ 29,016 $ ( 194,601 ) $ 84 $ ( 165,499 )

(1) On May 1, 2025, pursuant to a share recapitalization, the Company issued an additional 1,150,000 founder shares to the Sponsor (with DirectorCo waiving its entitlement to be issued additional founder shares in connection therewith and directing its allotment to be issued to the Sponsor), resulting in the Company’s initial shareholders holding an aggregate of 6,900,000 founder shares.

All share and per share data have been retrospectively presented.

(2) Includes an aggregate of up to 900,000 founder shares that were subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option was exercised.

On May 2, 2025, the underwriters exercised their over-allotment option in full, which was settled as part of the closing of the Initial Public Offering.

As such, 900,000 founder shares are no longer subject to forfeiture by the Sponsor.

The accompanying notes are an integral part of these unaudited condensed financial statements.

CARTESIAN GROWTH CORPORATION III

CONDENSED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Issuance of Series A Common Stock from stock option exercises — — 3,977 — — — 4 — — 4

Stock based compensation — — — — — — 1,749 — — 1,749

Foreign currency translation adjustments — — — — — — — — ( 182 ) ( 182 )

Net loss — — — — — — — ( 10,569 ) — ( 10,569 )

Balance, June 30, 2025 67,314,957 $ 249,652 2,893,241 $ — 15,512,742 $ 2 $ 30,769 $ ( 205,170 ) $ ( 98 ) $ ( 174,497 )

See accompanying notes to the unaudited condensed consolidated financial statements.

FACTORIAL ENERGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

Six Months Ended June 30,

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Payment of operation costs through promissory note

Interest earned on marketable securities held in Trust Account

( 2,491,718 )

Net loss $ ( 19,916 ) $ ( 23,439 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 1,802 4,385

Non-cash lease expenses and amortization 627 593

Stock-based compensation 2,571 5,606

Change in fair value of convertible promissory notes 1,264 —

Change in fair value of convertible promissory notes – related parties 3,791 —

Change in fair value of warrant liabilities for Series B-1 and Series D redeemable convertible preferred stock 399 —

Change in fair value of warrant liability for Series A Common Stock ( 4,738 ) —

Loss (gain) on disposal of property and equipment 36 ( 12 )

Unrealized foreign exchange loss (gain) 584 ( 611 )

Non-cash interest — 75

Changes in operating assets and liabilities:

Prepaid expenses

Long term prepaid insurance

Receivables under collaboration agreements 1,049 449

Prepaid expenses and other current assets ( 1,262 ) 37

Other non-current assets 160 —

Accounts payable ( 21 ) 583

Accrued expenses 2,916 ( 164 )

Operating lease liabilities ( 653 ) ( 590 )

Net cash used in operating activities ( 11,391 ) ( 13,088 )

Cash flows from investing activities:

Property and equipment expenditures ( 556 ) ( 185 )

Advances on property and equipment ( 22 ) —

Net cash used in investing activities ( 578 ) ( 185 )

Cash flows from financing activities:

Net cash used in financing activities

Net Change in Cash

Cash - Beginning of period

Cash - End of period

Proceeds received from reverse recapitalization and PIPE Financing, net of $ 20,064 of transaction costs

Issuance of convertible promissory notes, net 5,340 —

Proceeds from stock option exercises 90 6

Principal paid on finance lease liability — ( 414 )

Deferred transaction costs paid ( 1,335 ) —

Net cash provided by (used in) financing activities 96,091 ( 408 )

Effects of exchange rate change on cash, cash equivalents and restricted cash ( 177 ) ( 4 )

Net change in cash, cash equivalents and restricted cash 83,945 ( 13,685 )

Beginning cash, cash equivalents and restricted cash 29,772 51,421

Ending cash, cash equivalents and restricted cash $ 113,717 $ 37,736

Supplemental disclosures:

Cash paid during the year for:

Interest $ — $ 146

Leases $ 986 $ 975

Non-cash investing and financing activities:

Prepaid services contributed by Sponsor through promissory note – related party

Remeasurement of Class A ordinary shares to redemption value

Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares

Deferred costs included in accrued offering costs

Deferred offering costs paid through promissory note – related party

Deferred offering costs applied to prepaid expense

Deferred underwriting fee payable

The accompanying notes are an integral part of these unaudited condensed financial statements.

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Cartesian Growth Corporation III (the “Company”) is a blank check company incorporated as a Cayman Islands exempted corporation on October 29, 2024.

The Company was incorporated for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (the “Business Combination”).

Prior to the consummation of its initial public offering (“Initial Public Offering”), the Company had not, nor had anyone on its behalf, engaged in any substantive discussions, directly or indirectly, with any Business Combination target with respect to an initial Business Combination with the Company.

As of March 31, 2026, the Company has not commenced any operations.

All activity for the period from October 29, 2024 (inception) through March 31, 2026 relates to the Company’s formation and the Initial Public Offering, which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination.

The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest.

Subsequent to the Initial Public Offering, the Company generates non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering, which have been placed in the Trust Account (as defined below).

The Company has selected December 31 as its fiscal year end.

The Company’s Sponsor is CGC III Sponsor LLC (the “Sponsor”).

The registration statements for the Company’s Initial Public Offering became effective on May 1, 2025.

On May 5, 2025, the Company consummated the Initial Public Offering of 27,600,000 units (the “Units”), which includes the full exercise by the underwriters of their over-allotment option of 3,600,000 Units, at $ 10.00 per Unit, generating gross proceeds of $ 276,000,000 .

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 6,800,000 Private Placement Warrants (the “Private Placement Warrants”) to the Sponsor and Cantor Fitzgerald & Co.

(“Cantor”), the representative of the underwriters of the Initial Public Offering, at a price of $ 1.00 per warrant, generating gross proceeds of $ 6,800,000 .

Of those 6,800,000 Private Placement Warrants, the Sponsor purchased 4,400,000 Private Placement Warrants and Cantor purchased 2,400,000 Private Placement Warrants.

Each Unit consists of one Class A ordinary share and one -half of one redeemable warrant.

Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $ 11.50 per share.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the Private Placement Warrants, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination (less deferred underwriting commissions).

Transaction costs amounted to $ 18,821,468 , consisting of $ 4,800,000 of cash underwriting fee, $ 13,140,000 of deferred underwriting fee and $ 881,468 of other offering costs.

The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80 % of the net balance in the Trust Account (excluding the amount of deferred underwriting discounts held and taxes payable on the income earned on the Trust Account) at the time of the signing an agreement to enter into a Business Combination.

However, the Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50 % or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

There is no assurance that the Company will be able to successfully effect a Business Combination.

Following the closing of the Initial Public Offering on May 5, 2025, an amount of $ 276,000,000 ($ 10.00 per Unit) from the net proceeds of the sale of the Units, and a portion of the net proceeds from the sale of the Private Placement Warrants, was placed in a trust account (the “Trust Account”) and initially invested only in U.S.

government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S.

government treasury obligations;

the holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended Business Combination.

To mitigate the risk that the Company might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that the Company holds investments in the Trust Account, the Company may, at any time (based on the management team’s ongoing assessment of all factors related to the Company’s potential status under the Investment Company Act), instruct the trustee to liquidate the investments held in the Trust Account and instead to hold

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

the funds in the Trust Account in cash or in an interest bearing demand deposit account at a bank.

Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the proceeds from the Initial Public Offering and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (i) the completion of the Company’s initial Business Combination, (ii) the redemption of the Company’s public shares if the Company is unable to complete the initial Business Combination within 24 months from the closing of the Initial Public Offering, or by such earlier date as the Company’s board of directors may approve, or such other time period in which the Company must complete an initial Business Combination pursuant to an amendment to the Company’s amended and restated memorandum and articles of association (the “Articles”) approved by the Company’s shareholders (the “Completion Window”), subject to applicable law, or (iii) the redemption of the Company’s public shares properly submitted in connection with a shareholder vote to amend the Articles to (A) modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100 % of the Company’s public shares if the Company has not consummated an initial Business Combination within the Completion Window or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity.

The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public shareholders.

The Company will provide the Company’s public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination either (i) in connection with a general meeting called to approve the initial Business Combination or (ii) without a shareholder vote by means of a tender offer.

The decision as to whether the Company will seek shareholder approval of a proposed initial Business Combination or conduct a tender offer will be made by the Company, solely in its discretion.

The public shareholders will be entitled to redeem their shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account (less taxes payable, but without deduction for any excise or similar tax that may be due or payable), divided by the number of then-outstanding public shares.

The amount in the Trust Account is initially anticipated to be $ 10.00 per public share.

The ordinary shares subject to redemption were recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.”

The Company will have only the duration of the Completion Window to complete the initial Business Combination.

However, if the Company is unable to complete its initial Business Combination within the Completion Window, the Company will as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (less taxes payable, but without deduction for any excise or similar tax that may be due or payable, and less up to $ 100,000 of interest to pay dissolution expenses), divided by the number of then-outstanding public shares, which redemption will constitute full and complete payment for the public shares and completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to the Company’s obligations under Cayman Islands law to provide for claims of creditors and subject to the other requirements of applicable law.

The Sponsor, CGC III Sponsor DirectorCo LLC (“DirectorCo”), and the Company’s officers and directors have entered into letter agreements with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination;

(ii) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to the Articles;

(iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete the initial Business Combination within the Completion Window, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within the Completion Window and to liquidating distributions from assets outside the Trust Account;

and (iv) vote any founder shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions, aside from shares they may purchase in compliance with the requirements of Rule 14e-5 under the Securities

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

Exchange Act of 1934, as amended (the “Exchange Act”), which would not be voted in favor of approving the Business Combination) in favor of the initial Business Combination.

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company (except for the Company’s independent registered public accounting firm), or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $ 10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $ 10.00 per share due to reductions in the value of the trust assets, less taxes payable (but without deduction for any excise or similar tax that may be due or payable), provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).

However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company.

Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reclassification of warrant liability for Series A Common Stock from equity $ ( 49,354 ) $ —

Conversion of convertible promissory notes and accrued interest - related parties into Series A Common Stock $ 22,681 $ —

Conversion of convertible promissory notes and accrued interest into Series A Common Stock $ 6,604 $ —

Conversion of warrant liabilities for Series B-1 and Series D into Series A Common Stock $ 3,378 $ —

Deferred transaction costs included in accrued expenses $ 1,423 $ —

The following table presents the Company’s cash, cash equivalents and restricted cash by category in the Company’s Condensed Consolidated Balance Sheets:

Cash and cash equivalents $ 112,831 $ 34,533

Restricted cash 886 3,203

Total cash, cash equivalents and restricted cash $ 113,717 $ 37,736

See accompanying notes to the unaudited condensed consolidated financial statements.

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

NOTE 1 — THE COMPANY

Nature of Operations

Factorial Energy Inc.

(“Factorial”, the “Company”, or “we”), formerly known as Cartesian Growth Corporation III (“CGC”), is a developer and manufacturer of advanced battery energy storage technologies and solid-state battery (“SSB”) technology.

The technologies developed are expected to create a more sustainable future with high-performance batteries for electric vehicles, homes, and critical applications.

de-SPAC Transaction

On December 17, 2025, CGC, Fenway MS, Inc., a Delaware corporation (“Merger Sub”), and Factorial Inc.

(“Legacy Factorial”), entered into a Business Combination Agreement (as amended, the “BCA”).

CGC, a publicly traded special purpose acquisition company (“SPAC”) was listed on the Nasdaq Capital Market under the ticker symbol “CGCT”.

On June 5, 2026 (the "Closing Date"), the Merger Sub, a wholly-owned subsidiary of CGC, merged with and into Legacy Factorial, with Legacy Factorial surviving the merger as a wholly-owned subsidiary of CGC (the “Merger”).

In connection with the Merger, CGC was renamed Factorial Energy Inc.

The Company became listed on the Nasdaq Capital Market under the new ticker symbol “FAC” (“de-SPAC Transaction”) and subsequently upgraded to the Nasdaq Global Market (together with the Nasdaq Capital Market, “Nasdaq”).

The Company received gross proceeds of approximately $ 112.1 million in connection with the de-SPAC Transaction and the sale of a private placement (the “PIPE Financing”) of Class A ordinary shares of CGC, par value $ 0.0001 per share (the “CGC Class A Shares”), prior to the payment of transaction expenses (“de-SPAC and PIPE Proceeds”) of $ 20.1 million.

As discussed in Note 3 - Reverse Recapitalization , the de-SPAC Transaction was accounted for as a reverse recapitalization with Factorial being the accounting acquirer, and CGC identified as the acquired company for accounting purposes.

Accordingly, prior to the Closing Date, all historical financial information presented in the unaudited condensed consolidated financial statements represents the balances and activity of Legacy Factorial.

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the U.S.

Securities and Exchange Commission (“SEC”).

Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.

Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows.

In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 23, 2026.

The interim results for the three months ended March 31, 2026 and 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future periods.

Liquidity and Capital Resources and Going Concern

The Company’s liquidity needs up to March 31, 2026 had been satisfied through the loan from the Sponsor under an unsecured promissory note (the “Sponsor Promissory Note”) of up to $ 250,000 (see Note 5).

As of March 31, 2026, the Company had $ 396,210 cash and a working capital deficit of $ 877,955 .

In order to fund finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).

If the Company completes a Business Combination, the Company would repay the Working Capital Loans.

Up to $ 1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $ 1.00 per warrant at the option of the lender.

The warrants would be identical to the Private Placement Warrants.

As of March 31, 2026 and December 31, 2025, the Company had no borrowings under the Working Capital Loans.

In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Codification (“ASC”) 205-40, “Presentation of Financial Statements - Going Concern,” management has determined that the Company’s liquidity

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

condition raises substantial doubt about the Company’s ability to continue as a going concern.

No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Completion Window.

Segment Reporting

The Company complies with ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses among other disclosure requirements.

The Company adopted ASU 2023-07 on January 1, 2024.

The amendments will be applied retrospectively to all prior periods presented in the accompanying unaudited condensed financial statements (see Note 9).

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s financial statement with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

The accompanying interim condensed consolidated financial statements and notes to the condensed consolidated financial statements have been prepared in accordance with accounting standards generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information as organized in the Accounting Standards Codification (“ASC”) administrated by the Financial Accounting Standards Board (“FASB”).

The accompanying interim Condensed Consolidated Balance Sheet as of June 30, 2026, the interim Condensed Consolidated Statements of Operations and Comprehensive Loss, Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2026 and 2025, and the interim Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025, are unaudited.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in management’s opinion, include adjustments consisting of only normal recurring adjustments, excluding the de-SPAC Transaction described in Note 3 - Reverse Recapitalization , necessary for the fair statement of the Company’s financial position as of June 30, 2026 and its result of operations for the three and six months ended June 30, 2026 and 2025 are not necessarily indicative of the results to be expected for the full fiscal year or any other period.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s audited annual consolidated financial statements for the year ended December 31, 2025, included in the proxy statement/prospectus filed by CGC on May 6, 2026.

The accounting policies applied in the preparation of these interim condensed consolidated financial statements are consistent with those disclosed in the Company’s audited consolidated financial statements and accompanying notes.

The disclosures provided herein include only those policies that have been newly adopted or updated during the interim period, if any.

Prior to the receipt of the de-SPAC and PIPE Proceeds, the Company determined that its existing liquidity was not sufficient to fund operations for at least twelve months from the date of issuance of its audited annual consolidated financial statements, which raised substantial doubt about the Company’s ability to continue as a going concern.

The Company has experienced net losses and negative cash flows from operations since its inception.

The Company expects it will continue to incur significant costs including research and development expenses related to its ongoing operations until it successfully develops a commercial product and achieves revenues adequately to support the Company’s operations.

However, Factorial believes that its cash on hand, including the net proceeds from the de-SPAC and PIPE Proceeds, will be

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

sufficient to meet its working capital and capital expenditure requirements for a period of at least twelve months from the date of this filing.

Accordingly, management has concluded that the substantial doubt about the Company’s ability to continue as a going concern has been alleviated.

Factorial may, however, need additional cash resources due to changed business conditions or other developments, including unanticipated delays in negotiations with Original Equipment Manufacturers (“OEMs”) and tier-one automotive suppliers or other suppliers, supply chain challenges, competitive pressures, and regulatory or permitting developments, among other possible developments.

To the extent that Factorial’s current resources are insufficient to satisfy its cash requirements, Factorial may need to seek additional equity or debt financing.

If the financing is not available, or if the terms of financing are less desirable than Factorial expects, Factorial may be forced to decrease its level of investment in product development or scale back its operations.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

All intercompany accounts and transactions have been eliminated in the preparation of the consolidated financial statements in accordance with the provisions under ASC Topic 810 Consolidation .

Use of Estimates

The preparation of the unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.

Accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company had $ 396,210 and $ 624,163 in cash and no cash equivalents as of March 31, 2026 and December 31, 2025, respectively.

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

Investments Held in Trust Account

As of March 31, 2026 and December 31, 2025, the assets held in the Trust Account, amounting to $ 285,868,994 and $ 283,377,276 , respectively, were held in mutual funds primarily invested in U.S.

Treasury Bills with a maturity of 185 days or less.

Investments held in the Trust Account are presented at fair value at each condensed balance sheet date, with unrealized gains and losses resulting from changes in fair value included in earnings as a component of interest and dividend income earned on investments held in the Trust Account in the accompanying statements of operations.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000.

Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

Offering Costs

The Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering.

FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components.

The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between Class A ordinary shares and warrants, using the relative fair value method by allocating Initial Public Offering proceeds first to assigned value of the warrants and then to the Class A ordinary shares.

Offering costs allocated to the Class A ordinary shares were charged to temporary equity and offering costs allocated to the public warrants and Private Placement Warrants were charged to shareholder’s deficit as public warrants and Private Placement Warrants after management’s evaluation were accounted for under equity treatment.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets, primarily due to its short-term nature.

The Company accounts for income taxes under ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes.

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

As of March 31, 2026 and December 31, 2025, there were no unrecognized tax benefits and no amounts accrued for interest and penalties.

The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.

As such, the Company’s tax provision was zero for the periods presented.

Class A Ordinary Shares Subject to Possible Redemption

The public shares contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, or if there is a shareholder vote or tender offer in connection with the Company’s initial Business Combination.

In accordance with ASC 480-10-S99, the Company classifies public shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company.

The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period.

Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption value.

The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and then to accumulated deficit.

Accordingly, as of March 31, 2026 and December 31, 2025, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed balance sheets.

As of March 31, 2026 and December 31, 2025, the Class A ordinary shares subject to possible redemption reflected in the condensed balance sheets are reconciled in the following table:

Gross proceeds

Proceeds allocated to public warrants

The preparation of the financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the amounts of expenses during the reporting period.

On an ongoing basis, the Company’s management evaluates its estimates, judgments, and methodologies.

Significant estimates and assumptions in the consolidated financial statements include those related to warrant liabilities, convertible promissory notes and stock-based compensation.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Actual results may differ materially from these estimates under different assumptions or conditions.

Changes in estimates are reflected in reported results in the period in which they become known.

Collaboration Arrangements and Partnership Agreements

The Company enters into collaborative arrangements with various parties individually through joint development agreements (“JDAs”) to evaluate and test its technology.

The agreements are executed in anticipation of entering into either a purchasing agreement for the Company’s sellable products or jointly developing a commercialized product.

As part of the JDAs, the counterparty may either reimburse the Company for certain costs incurred through a fixed fee payment or per unit payment or share certain costs with the Company.

The Company assesses each collaborative arrangement to determine whether it is in scope for ASC Topic 808, Collaborative Arrangements (“ASC 808”).

In making the determination, the Company considers whether the arrangement involves joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities.

All of the JDAs entered into by the Company have been concluded to be arrangements within the scope of ASC 808.

As a result, payments received/paid from/to the counterparties have been netted against the research and development expenses incurred by the Company.

The Company assesses each collaborative arrangement to determine whether it is in scope for ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

In making the determination, the Company considers if some or all aspects of the arrangement represent a transaction with a customer.

All of the JDAs entered into by the Company to date have been concluded to be arrangements outside the scope of ASC 606.

As a result, no revenue has been recognized by the Company.

For the three months ended June 30, 2026, and 2025, the Company recognized approximately $ 0.2 million and $ 0.2 million, respectively, and for the six months ended June 30, 2026 and 2025, the Company recognized $ 3.6 million and $ 0.2 million, respectively, in expense reimbursements from arrangements, which are recorded net within research and development expenses on the unaudited condensed consolidated statements of operations and comprehensive loss.

In February 2026, the Company entered into a new development agreement with PowerCo SE (“PowerCo”).

The development agreement has various terms and conditions and has a term of fifteen months ;

however, PowerCo has the right to terminate under certain conditions.

The Company entered into this development agreement for purposes of assessing its technology through evaluation and testing of its batteries.

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

In January 2026, the Company entered into a partnership agreement with a note holder as further described in Note 8- Convertible Promissory Note .

The partnership agreement includes up to $ 0.9 million of consideration for the performance of research and development services to the note holder.

Deferred Transaction Costs

The Company complies with the requirements of ASC 340, Other Assets and Deferred Costs , with regards to transaction costs.

Prior to the completion of the transaction (potential business combination with Cartesian Growth Corporation III), direct transaction costs are capitalized as deferred transaction costs.

If the transaction is completed, the deferred transaction costs are charged to additional paid-in capital and offset the proceeds received from the potential business combination.

As of June 30, 2026, the Company has completed the Merger, and all deferred transaction costs have been recognized.

Convertible Promissory Notes, Fair Value

In August 2025, the Company entered into Convertible Promissory Note Agreements with existing investors (“August 2025 Notes” or “Convertible Promissory Notes – Related parties”) where they can receive a total of $ 10.0 million.

In January 2026, the Company entered into Note Purchase Agreements and a Convertible Promissory Note Agreement pursuant to which it could receive proceeds up to $ 5.3 million (the “January 2026 Notes” or “Convertible Promissory Notes”) from new investors.

The Company determined that it is eligible for the fair value option election in connection with the Convertible Promissory Notes – Related Parties and the Convertible Promissory Notes.

Both the Convertible Promissory Notes – Related Parties and the Convertible Promissory Notes meet the definition of a “recognized financial liability” which is an acceptable financial instrument eligible for the fair value option under ASC Topic 825 Financial Instruments (“ASC 825”).

At the date of issuance, the fair value of the Convertible Promissory Notes – Related Parties and Convertible Promissory Notes were derived using the scenario-based method (“SBM”) as further described in Note 4 – Fair Value Measurements .

The fair value option election was made to enhance the relevance and transparency of information presented related to the features embedded in the Convertible Promissory Notes.

Changes in the fair value of the Convertible Promissory Notes – Related Parties and the Convertible Promissory Notes are recorded as gains or losses in the Company’s consolidated statements of operations and comprehensive loss within other (expense) income, net, until the date of the Merger.

At the Closing Date, all convertible promissory notes and accrued interest were exchanged as part of the de-SPAC Transaction, see Note 3 – Reverse Recapitalization , Note 4 – Fair Value Measures , Note 7 - Convertible Promissory Notes – Related Parties , and Note 8 - Convertible Promissory Notes , for further details.

Warrant Instruments

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own shares of Series A common stock $ 0.00001 per share (the “Series A Common Stock”) and whether warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end-date while the warrants are outstanding.

For issued or modified warrants that meet all the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance.

For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Changes in the estimated fair value of warrants classified as liabilities are recognized as a non-cash gain or loss on Company’s condensed consolidated statements of operations and comprehensive loss within other (expense) income, net.

Series B-1 and Series D Warrants

Series B-1 and Series D Warrants for the purchase of shares of redeemable convertible preferred stock are classified as liabilities on the condensed consolidated balance sheets at fair value upon issuance because the underlying shares of redeemable convertible preferred stock are redeemable outside of the control of Company.

The initial liability recorded is

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

adjusted for changes in the fair value at each reporting date and recorded as other income/expense in the accompanying Company’s condensed consolidated statements of operations and comprehensive loss.

The Company continued to adjust the convertible preferred stock warrant liability for changes in fair value until the exercise of the warrants, at which time the liability was reclassified to redeemable convertible preferred stock, and is reflected in the Company’s condensed consolidated statements of operations and comprehensive loss.

The redeemable convertible preferred stock warrant liabilities increased or decreased each period based on the fluctuations of the fair value of the underlying security.

The fair value of the Series B-1 and Series D redeemable convertible preferred stock warrants are estimated using a Probability Weighted Equity Return Method (“PWERM”).

Under this approach, the Company develops multiple scenarios and ascribes a probability weighting to each scenario and related estimated fair value.

Key inputs and assumptions in the PWERM include the probability and the estimated value of the security in each liquidity scenario, in addition to scenario specific assumptions.

Public and Private Warrants

The Company accounts for the Public Warrants and Private Warrants (as defined below) in accordance with U.S.

GAAP, under which the 13,800,000 redeemable public warrants for Series A Common Stock (“Public Warrants) and 6,800,000 redeemable private placement warrants for Series A Common Stock (the “Private Warrants”) were issued by CGC in connection with its initial public offering.

Upon completion of the Merger, such warrant agreements were amended and remained outstanding as warrants of the Company.

The Company evaluated the amended terms of the Public Warrants and concluded that equity classification remains appropriate.

The amended terms of the Private Warrants provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder, and, because the holder of a Private Warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provision precluded the Private Warrants from being classified in equity.

Accordingly, the Company reclassified the Private Warrants from equity to a liability and measured the Private Warrants at fair value.

At the end of each reporting period, the Company will adjust the fair value of the Private Warrants using a Black-Scholes option pricing model whereby the expected volatility was estimated based on the historical volatility of a group of comparable publicly traded companies over a period commensurate with the expected remaining term of the warrants, as the Company’s common stock and Public Warrants do not have sufficient trading history to estimate volatility on a stand-alone basis.

Recently Adopted Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date.

After the completion of the re-recapitalization described in Note 3 – Reverse Recapitalization , the Company is considered an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “Jobs Act”).

The Jobs Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards.

Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

The Company has elected to avail itself of this extended transition period and, as a result, the Company will not be required to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”).

ASU 2025-05 provides optional practical expedients intended to simplify the application of the current expected credit loss model to current trade accounts receivable and current contract assets arising from revenue transactions under Topic 606.

The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance.

The Company adopted the guidance effective January 1, 2026.

The adoption did not have a material impact on its accounting policies, financial position, results of operations, or cash flows, as the Company has no trade receivables and contract assets.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements (Topic 815).

The amendments in this ASU update the FASB Accounting Standards Codification for a broad range of Topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements.

The amendments in this ASU are effective for all entities for annual periods beginning after December 15, 2026, with early adoption permitted.

The Company early adopted ASU 2025-12 and the adoption did not have a material impact on its condensed consolidated financial statements.

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

New Accounting Pronouncements — Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE) (“ASU 2024-03”), requiring additional disclosure of the nature of expenses included in the income statement.

The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

The amendment in this update applies to all public business entities and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

The Company is currently evaluating the provisions of the amendments and the impact on its disclosures.

In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270):

Narrow-Scope Improvements.

This standard clarifies current interim reporting requirements on Topic 270 and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

This standard will be effective for fiscal years beginning after December 15, 2027, with the option to apply it retrospectively.

Early adoption is allowed.

Currently, the Company is assessing the potential impact of this guidance on its financial statement disclosures.

NOTE 3 — REVERSE RECAPITALIZATION

Immediately prior to the de-SPAC Transaction described in Note 1 – The Company , CGC issued and sold to investors in the PIPE Financing 7,519,404 shares of its common stock for gross proceeds of $ 64.7 million.

In connection with the de-SPAC Transaction, the Company received a total for $ 47.4 million in proceeds from the trust account previously held by CGC (the “Trust Account”).

The Company incurred $ 1.3 million in transaction costs paid in cash prior to the Closing Date of the Merger, which are recorded to additional paid-in capital.

On the Closing Date of the Merger, the Company incurred de-SPAC Transaction costs of $ 20.1 million, consisting of legal, accounting, and other professional fees, which were recorded to additional paid-in capital as a reduction of the deemed proceeds from the reverse recapitalization, the PIPE Financing, and the Trust Account.

The Company accounted for the Merger, described in Note 1 - The Company , under ASC 805, Business Combinations, and related guidance and determined that Legacy Factorial is the accounting acquirer for financial reporting purposes.

Accordingly, these unaudited condensed consolidated financial statements of the Company are presented as a continuation of the financial statements of Legacy Factorial, except for the legal capital structure, which was retroactively recast to reflect the equity structure of the Company.

The de-SPAC Transaction is presented as the issuance of common stock by the Company for the net assets of CGC and proceeds from the PIPE Financing, accompanied by a recapitalization and a change in the reporting entity.

The net assets of CGC were recorded at historical cost as of the Closing date, with no goodwill or other intangible assets recognized.

All shares and per-share amounts for periods prior to the Merger have been retroactively recast, where applicable, to reflect the exchange ratio established in the BCA of approximately 3.6684 (“Consideration Ratio”).

Upon the effective time of the Merger (“Merger Effective Time”), the following occurred with respect to the equity of Legacy Factorial:

• At the Merger Effective Time, each share of common stock of Legacy Factorial (“Legacy Factorial Common Stock”) that was issued and outstanding as of immediately prior to the Merger Effective Time (excluding treasury shares, dissenting shares and shares held by Dr.

Siyu Huang, Factorial’s Co-Founder and Chief Executive Officer and Dr.

Alex Yu, Factorial’s Co-Founder and Chief Technology Officer (together, the “Legacy Factorial Founders”) was automatically canceled and converted into the right to receive a corresponding number of shares of Series A Common Stock equal to the Consideration Ratio and each share of Legacy Factorial’s capital stock that was issued and outstanding as of immediately prior to the Merger Effective Time held by the Legacy Factorial Founders was automatically canceled and converted into the right to receive a corresponding number of shares of Factorial’s Series B common stock, par value $ 0.00001 per share (the “Series B Common Stock,” and together with the Series A Common Stock, the “Factorial Energy Common Stock”) equal to the Consideration Ratio;

• The number of shares of Legacy Factorial Common Stock set forth in the above gave effect to:

◦ The conversion of each outstanding convertible debt instrument including accrued interest (including the Convertible Promissory Notes - Related Parties and Convertible Promissory Notes (together the “Legacy Factorial Convertible Notes”)) into Legacy Factorial Common Stock pursuant to its terms, see Note 7 - Convertible Promissory Notes - Related Parties and Note 8 - Convertible Promissory Notes for details;

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

◦ The conversion of each issued and outstanding share of Series A-1, Series A-2, Series B-1, Series C-1, Series C-2, and Series D redeemable convertible preferred stock (together the “Legacy Factorial Preferred Stock”) into a number of shares of Legacy Factorial Common Stock in accordance with the terms of Section 5.1 of the Factorial Certificate of Incorporation in effect immediately prior to the Merger Effective Time;

◦ The conversion of each issued and outstanding Series B-1 and Series D warrants (together the “Legacy Factorial Warrants”) into a number of shares of Legacy Factorial Common Stock in accordance with the terms of the corresponding warrant agreements, see Note 12 - Warrants for details;

• Each share of Legacy Factorial Common Stock held immediately prior to the Merger Effective Time by Legacy Factorial as treasury stock was automatically cancelled and extinguished, and no consideration was paid with respect thereto;

• Each share of capital stock of Merger Sub issued and outstanding immediately prior to the Merger Effective Time was automatically cancelled and extinguished and converted into one share of Factorial Energy Common Stock;

• Each outstanding and unexercised vested and unvested option to purchase shares of Legacy Factorial Common Stock (each, a “Legacy Factorial Option”) to purchase shares of Legacy Factorial Common Stock became a Factorial Option containing the same terms, conditions, vesting and other provisions as were historically applicable to such Legacy Factorial Options and each resulting Factorial Option became exercisable for the number of shares of Series A Common Stock equal to the Consideration Ratio multiplied by the number of shares of Legacy Factorial Common Stock subject to the Legacy Factorial Option as of immediately prior to the Merger Effective Time, rounded down to the nearest whole share, at an exercise price equal to the per share exercise price of the Legacy Factorial Option divided by the Consideration Ratio, rounded up to the nearest whole cent;

• Each restricted stock unit award with respect to Legacy Factorial Common Stock (each, a “Legacy Factorial RSU”) that was outstanding was cancelled in exchange for a restricted stock unit award with respect to Series A Common Stock (“Factorial RSU”) under the Factorial Energy Inc.

2026 Equity Incentive Plan (the “2026 Plan”) containing the same terms, conditions, vesting and other provisions as were historically applicable to such Legacy Factorial RSU, and each resulting Factorial RSU will settle into a number of shares of Series A Common Stock equal to a number of shares of Series A Common Stock as set forth on an allocation schedule, rounded down to the nearest whole share.

As a result of the Merger, the following shares were issued at the Merger Effective Time, exclusive of Legacy Factorial Common Stock and Legacy Factorial Preferred Stock that were converted into Series A Common Stock and Series B Common Stock were reflected retroactively for all periods presented:

Amount Series A Common Stock

Legacy Factorial Convertible Notes and accrued interest $ 29,284 2,811,447

Series B-1 and Series D warrants 3,777 362,625

Issuance of Series A Common Stock in connection with the reverse recapitalization and PIPE Financing, net of issuance costs 90,624 17,940,207

Total $ 123,685 21,114,279

Immediately after the Merger, the Company’s outstanding common stock included the following components:

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

Total Combined Shares Series A Common Stock Series B Common Stock

CGC's Public Shareholders (1)

4,548,687 4,548,687 —

Class A ordinary shares issuance cost

Sponsor and Director Co (2)

5,810,000 5,810,000 —

Remeasurement of carrying value to redemption value

Class A ordinary shares subject to possible redemption, December 31, 2025

Remeasurement of carrying value to redemption value

Class A ordinary shares subject to possible redemption, March 31, 2026

Warrant Instruments

The Company accounted for the public warrants and Private Placement Warrants issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in FASB ASC Topic 815, “Derivatives and Hedging”.

Accordingly, the Company evaluated and classified the warrant instruments under equity treatment at their assigned values.

Net Income (Loss) per Ordinary Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of shares of ordinary shares outstanding for the period.

The Company has two classes of ordinary shares, which are referred to as redeemable Class A ordinary shares and non-redeemable Class A and Class B ordinary shares.

Remeasurement associated with the redeemable shares of Class A ordinary shares is excluded from income (loss) per ordinary share as the redemption value approximates fair value.

The calculation of diluted income (loss) per ordinary share does not consider the effect of the warrants issued in connection with the Initial Public Offering and the Private Placement Warrants since the exercise of the warrants is contingent upon the occurrence of future events.

The warrants are exercisable to purchase 20,600,000 Class A Ordinary Shares in the aggregate.

As of March 31, 2026 and December 31, 2025, the Company did no t have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares that then share in the earnings of the Company.

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts):

For the Three Months Ended March 31,

Basic and diluted net income (loss) per ordinary share

Allocation of net income (loss)

Basic and diluted weighted average shares outstanding

Basic and diluted net income (loss) per ordinary share

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statement.

INITIAL PUBLIC OFFERING

Pursuant to the Initial Public Offering on May 5, 2025, the Company sold 27,600,000 Units, which includes a full exercise by the underwriters of their over-allotment option of 3,600,000 Units at a purchase price of $ 10.00 per Unit, generating gross proceeds of $ 276,000,000 .

Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant.

Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $ 11.50 per share, subject to adjustment.

Each warrant will become exercisable 30 days after the completion of the initial Business Combination and will expire five years after the completion of the initial Business Combination, or earlier upon redemption or liquidation.

Warrants — As of March 31, 2026 and December 31, 2025, there were 20,600,000 warrants outstanding, including 13,800,000 public warrants and 6,800,000 Private Placement Warrants.

Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $ 11.50 per share, subject to adjustment as discussed herein.

The warrants cannot be exercised until 30 days after the completion of the initial Business Combination, and will expire at 5:00 p.m., New York City time, five years after the completion of the initial Business Combination or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current.

No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

PIPE Institutional Investor (3)

6,340,000 6,340,000 —

PIPE Sponsor Investor (4)

1,179,404 1,179,404 —

Factorial Shareholders (5)

89,083,034 73,570,292 15,512,742

Cantor Advisory Fee (6)

62,118 62,118 —

Total shares outstanding 107,023,243 91,510,501 15,512,742

(1) Reflects redemption of 23,051,313 CGC Class A Shares out of the 27,600,000 CGC Class A Shares available for redemption by CGC Public Shareholders prior to the Closing.

Note that the 4,548,687 shares presented herein include an aggregate of 3,470,764 CGC Class A Shares (the “NRA Shares”) that a certain institutional investor (the “Institutional Investor”) and an affiliate of CGC III Sponsor LLC, a Cayman Islands limited liability company (the “Sponsor” and such affiliate, the “Sponsor Investor”) purchased prior to the Closing to partially satisfy their PIPE Financing obligations.

(2) Amount includes 5,710,000 Class B ordinary shares of CGC, par value $ 0.0001 per share (the “Founder Shares”) held by the Sponsor and 100,000 Founder Shares held by CGC III Sponsor DirectorCo LLC, a Cayman limited liability company managed by the Sponsor(in which, each of CGC’s independent directors hold an interest in 30,000 Founder Shares).

(3) Amount includes (i) the Institutional Investor’s subscription for 5,500,000 shares of Series A Common Stock at a subscription price of $ 10.00 per share;

plus (ii) the constructive transfer at the Closing of an aggregate of 750,000 shares of Series A Common Stock from the Sponsor to the Institutional Investor;

and plus (iii) an aggregate of 90,000 shares of Series A Common Stock constructively transferred to the Institutional Investor by the Sponsor as part of a certain letter agreement.

The effective subscription price of the Institutional Investor is $ 8.68 per share, taking into account the foregoing transfers from the Sponsor.

(4) Amount includes (i) the Sponsor Investor’s subscription for 929,404 shares of Series A Common Stock at a subscription price equal to the redemption price of $ 10.42 per share;

plus (ii) the constructive transfer at the Closing of an aggregate of 250,000 shares of Series A Common Stock from the Sponsor to the Sponsor Investor.

The effective subscription price of the Sponsor Investor is $ 8.21 per share, taking into account the foregoing transfer from the Sponsor.

(5) Includes (i) an aggregate of 3,081,263 shares of Series A Common Stock issued to holder of Legacy Factorial Common Stock from conversion of Legacy Factorial Common Stock based upon the Consideration Ratio;

(ii) an aggregate of 15,512,742 shares of Series B Common Stock issued to the Factorial Founders from the exchange of shares of Legacy Factorial Common Stock based upon the Consideration Ratio;

(iii) an aggregate of 67,314,957 shares of Series A Common Stock issued to holders of Legacy Factorial Preferred Stock from the exchange of shares of Legacy Factorial Preferred Stock;

(iv) an aggregate of 2,811,447 shares of Series A Common Stock issued to holders of the Legacy Factorial Convertible Notes from conversion of the Legacy Factorial Convertible Notes along with accrued interest into shares of Legacy Factorial Common Stock immediately before the Merger and the subsequent exchange into shares of Series A Common Stock;

and (v) an aggregate of 362,625 shares of Series A Common Stock issued to holders of the Legacy Factorial Warrants from their cashless exercise of the warrants for shares of Legacy Factorial Preferred Stock and converted into shares of Legacy Factorial Common Stock immediately before the Merger and subsequent exchange for Series A Common Stock.

(6) Amount includes 62,118 shares of Series A Common Stock issued to Cantor pursuant to the financial advisor engagement letter as outlined in the Company’s the S-4 filed on June 11, 2026.

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

NOTE 4 — FAIR VALUE MEASURES

The Company’s financial assets are subject to fair value measurements on a recurring basis.

The following table presents information about the Company’s financial assets and liabilities measured at fair value and the level of input utilized to determine such fair values (in thousands):

Fair value measurements as of June 30, 2026

Total Level 1 Level 2 Level 3

Money market (included in cash and cash equivalents) $ 95,492 $ 95,492 $ — $ —

Money market (included in restricted cash) 886 886 — —

Total Assets $ 96,378 $ 96,378 $ — $ —

Warrant liability for Series A Common Stock $ 44,616 $ — $ — $ 44,616

Accrued private issuance liability (included in accrued expenses) 1,109 1,109 — —

Total Liabilities $ 45,725 $ 1,109 $ — $ 44,616

Fair value measurements as of December 31, 2025

Total Level 1 Level 2 Level 3

Money market (included in cash and cash equivalents) $ 14,152 $ 14,152 $ — $ —

Money market (included in restricted cash) 881 881 — —

Total Assets $ 15,033 $ 15,033 $ — $ —

Warrant liability Series B-1 $ 608 $ — $ — $ 608

Warrant liability Series D 2,770 — — 2,770

Convertible promissory notes – related parties 18,889 — — 18,889

Total Liabilities $ 22,267 $ — $ — $ 22,267

Certain of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as accounts payable, accrued expenses, and other current liabilities.

Level 3 Financial Instruments

The following table sets forth a summary of the changes in the estimated fair value of the Company’s warrants for Series A Common Stock, redeemable convertible preferred stock warrants, and convertible promissory note, which represents financial instruments with valuations classified as Level 3.

When a determination is made to classify a financial instrument within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement.

However, Level 3 financial instruments typically include, in addition to the unobservable inputs, observable inputs (that is, components that are actively quoted and can be validated to external sources).

Accordingly, the gain or loss in the table below includes changes in fair value due in part to observable factors that are part of the Level 3 methodology recognized in the condensed consolidated statements of operations and comprehensive loss as a component of other income (expense), net as appropriate (in thousands):

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

Warrant Liabilities Convertible Promissory Notes

Series D Warrants for Series A Related Party Notes Notes

December 31, 2025 $ 608 $ 2,770 $ — $ 18,889 $ —

Reclassification of Warrant liability for Series A Common Stock from equity to liability — — 49,354 — —

Issuance of convertible promissory notes — — — — 5,340

Change in fair value 1

137 262 ( 4,738 ) 3,791 1,264

Conversion to shares of Series A Common Stock ( 745 ) ( 3,032 ) — ( 22,680 ) ( 6,604 )

June 30, 2026 $ — $ — $ 44,616 $ — $ —

1 Upon the closing of the Merger, the conversion price and number of shares issuable for the Series B-1 Warrants, Series D Warrants, Convertible Promissory Notes – Related Parties, and Convertible Promissory Notes were determined based on the price per share paid in the Merger, an observable input, rather than the unobservable inputs used in the PWERM for the warrants and the SBM for the convertible promissory notes as of December 31, 2025.

Accordingly, no further Level 3 fair value estimate was required at the conversion date;

the final fair value was determined directly from the Merger's per-share price applied to the conversion formula set forth in in Note 7 – Convertible Promissory Notes – Related Parties .

Upon the completion of the Company’s Merger in June 2026, warrants exercised for redeemable convertible preferred stock and convertible promissory notes were automatically exchanged for shares of Series A Common Stock based on the Consideration Ratio.

See Note 7 – Convertible Promissory Notes – Related Parties , Note 8 - Convertible Promissory Notes , and Note 12 – Warrants for further details.

Series B-1 and Series D Warrant Liabilities

To estimate the fair value of the Series B-1 and D Warrant Agreements, the Company applied the PWERM.

Under this approach, the Company develops multiple scenarios and ascribes a probability weighting to each scenario and related estimated fair value.

Key inputs and assumptions in the PWERM include the probability and the estimated value of the security in each liquidity scenario, in addition to scenario specific assumptions.

The two scenarios used in the valuation of the Series B-1 and D Warrant Agreements are a SPAC Exit scenario and Option Pricing Method scenario (the “OPM scenario”).

The Company applied a 75 % weighting to the SPAC Exit Scenario and 25 % to the OPM scenario as of December 31, 2025.

As of the Merger date there were no further assumptions and the fair market value was equal to the conversion value per the terms of the agreement based on the SPAC redemption value, adjusted by the Consideration Ratio to a value of $ 10.42 per converted share of Series A Common Stock.

The following are assumptions used in valuing the Series B-1 and D Warrant Agreements in the SPAC Exit scenario, as of December 31, 2025:

Series B-1 Series D

Discount rate 25 % 25 %

Expected life 0.38 0.38

Future projected price per share $ 37.76 $ 37.76

Strike price $ 0.08 $ 27.21

The significant unobservable inputs used in the fair value measurement of the Series B-1 and D warrant liability in the SPAC Exit scenario are the discount rate and the expected life.

The future projected price per share is estimated based on the SPAC purchase price as outlined in the Company’s BCA.

The discount rate reflects current market assessments of the time of value of money and the risks specific to the Company given its stage of development.

The expected life is based upon the fact that the Warrant Agreements would not persist through a liquidity event, and therefore the expected life is based upon management’s estimated holding period to an exit/liquidity event.

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

The following are the assumptions used in valuing the Series B-1 and D Warrant Agreements in the OPM scenario, as of December 31, 2025:

Series B-1 Series D

Share value $ 18.14 $ 33.71

Assumed volatility 90 % 37 %

Assumed risk-free interest rate 3.5 % 3.5 %

Expected life 2 2

Expected dividends — —

The significant unobservable inputs used in the fair value measurement of the Series B-1 and D warrant liability in the OPM scenario are the equity value of the Company, the expected life and assumed volatility.

The equity value of the Company is derived from a discounted cash flow analysis based on the Company’s best estimates of future cash flows.

The assumptions underlying these valuations include projected future revenue and cash flows, discount rates, market adjustments and multiples, selection of comparable companies, the lack of marketability of our equity, and probability of possible future events, including the expected time to liquidity.

These underlying assumptions represent our best estimates at the time they were made, which involves inherent uncertainty and the application of judgment.

Changes to the key assumptions and estimates used in the valuations could result in materially different fair values of our common and preferred stock at each valuation date.

The expected volatility is based upon observed historical volatilities of a cohort of guideline public companies.

Equity allocation mechanics are based upon the distribution waterfall as outlined in the Company’s operating agreement.

Significant increases (decreases) in the equity value, the expected life, or the assumed volatility, could result in significantly higher (lower) fair value measurements.

Warrant Liability for Series A Common Stock

The Private Warrants are valued using a Black-Scholes model, which resulted in a Level 3 fair value measurement.

The primary unobservable input utilized in determining the fair value of the Private Warrants is the expected volatility of the Company’s common stock.

The expected volatility was estimated based on the historical volatility of a group of comparable publicly traded companies over a period commensurate with the expected remaining term of the warrants, as the Company’s common stock does not have sufficient trading history to estimate volatility on a stand-alone basis.

As of June 30, 2026, the fair value of outstanding Private Warrants of approximately $ 44.6 million is recorded as warrant liability.

The following table presents the changes in the fair value of warrant liability:

June 30, 2026

Warrant liability for Private Placement as of December 31, 2025 $ —

Reclassification of Warrant liability for Series A Common Stock from equity to liability 49,354

Change in fair value ( 4,738 )

Warrant liability for Private Placement as of June 30, 2026 $ 44,616

As of the issuance date, the fair value of the Private Warrants was estimated using the following assumptions:

Exercise price $ 11.50

Share price $ 11.90

Volatility 68.5 %

Remaining contractual term 4.99

Risk Free Rate 4.25 %

Dividend yield — %

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

As of June 30, 2026, the fair value of the Private Warrants was estimated using the following assumptions:

June 30, 2026

Exercise price $ 11.50

Share price $ 11.09

Volatility 68.7 %

Remaining contractual term 4.93

Risk Free Rate 4.1 %

Dividend yield — %

Convertible Promissory Notes – Related Parties

To estimate the fair value of the August 2025 Notes, the Company applied the SBM.

The fair value of the August 2025 Notes includes an estimate of the value of accrued interest.

The significant unobservable inputs used in the fair value measurement of the August 2025 Notes are the underlying share value, the expected life, assumed volatility, assumed discount rate, share value, and the probability of scenarios.

As of the Merger date, there were no further assumptions and the fair market value was equal to the conversion value per the terms of the agreement and SPAC redemption value, adjusted by the Consideration Ratio to a value of $ 10.42 .

The assumptions used in determining the fair value of the August 2025 Notes under the SBM as of December 31, 2025, were as follows:

December 31, 2025

SPAC Exit Scenario 75.0 %

Qualified Financing Scenario 15.0 %

Dissolution Scenario 10.0 %

Assumed volatility 40.0 %

Assumed risk-free interest rate 3.5 %

Expected life 0.75

Assumed discount rate 20.0 %

Share value $ 34.47

To estimate the share value of the Series D redeemable convertible preferred stock at December 31, 2025, we used a PWERM.

The two scenarios used in the estimation of the Series D redeemable convertible preferred stock are a SPAC Exit scenario and Option Pricing Method scenario.

Convertible Promissory Notes

To estimate the fair value of the January 2026 Notes, the Company applied the SBM.

The fair value of the January 2026 Notes includes an estimate of the value of accrued interest.

The significant unobservable inputs used in the fair value measurement of the January 2026 Notes are the expected life, assumed discount rate, and the probability of scenarios.

As of the Merger date there were no further assumptions and the fair market value was equal to the conversion value per the terms of the agreement and weighted average PIPE investment price, adjusted by the Consideration Ratio to a value of $ 10.06 .

The assumptions used in determining the fair value of the January 2026 Notes under the SBM were as follows:

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

January 26, 2026

SPAC Exit Scenario 80 %

Qualified Financing Scenario 10 %

Dissolution Scenario 10 %

Expected life 0.68

Assumed discount rate 20 %

NOTE 5 — PROPERTY AND EQUIPMENT

Property and equipment, net consists of the following (in thousands):

June 30, 2026 December 31, 2025

Leasehold improvements $ 10,151 $ 10,680

Machinery and equipment 15,733 16,315

Furniture and fixtures 395 419

Computer and software 210 216

Buildings 1,145 1,227

Building Fixtures 1,240 1,206

Land 3,155 3,382

Advances on purchases of property and equipment* 634 632

Total $ 32,663 $ 34,077

Accumulated depreciation ( 13,445 ) ( 12,801 )

Total $ 19,218 $ 21,276

*Advances on purchases of property and equipment are payments made before the related asset (such as machinery and equipment) are delivered and are not depreciated until the asset is placed in service.

Depreciation expense related to property and equipment is as follows:

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Total $ 920 $ 1,987 $ 1,802 $ 3,971

NOTE 6 — ACCRUED EXPENSES

Accrued expenses consisted of the following (in thousands):

June 30, 2026 December 31, 2025

Accrued compensation and benefits $ 1,150 $ 760

Accrued legal and professional 1,404 239

Accrued private issuance liability 1,109 —

Accrued transaction costs — 1,423

Accrued other 772 559

Total accrued expenses $ 4,435 $ 2,981

NOTE 7 — CONVERTIBLE PROMISSORY NOTES — RELATED PARTIES

On August 1, 2025, the Company entered into the August 2025 Notes where they can receive a total of $ 10.0 million.

The August 2025 Notes, were issued to related parties with initial principal balances as follows, Stellantis $ 2.0 million,

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

Mercedes-Benz $ 2.0 million, and Gatemore Capital Management controlled entities $ 6.0 million.

The August 2025 Notes bore interest of 15 % per annum, compounded monthly, and had a maturity date of August 1, 2028.

The accrued interest balance was included in the fair value estimate of the August 2025 Notes liability.

No payments were due until maturity.

The August 2025 Notes principal and interest were convertible into the most senior preferred security at the time of conversion.

The August 2025 Notes provided the holders with certain conversion features including:

a mandatory conversion upon a qualified financing event, an optional conversion upon a non-qualified financing event and an optional conversion upon an acquisition of the Company.

The August 2025 Notes included an automatic conversion event in connection with a qualified financing event.

The principal amount and any unpaid interest on the August 2025 Notes would automatically be converted into shares of the same class and type of securities issued in the qualified financing.

The number of shares issued would be calculated by dividing the greater of either i) 110 % of the original August 2025 Note or ii) the total outstanding principal and accrued interest of the August 2025 Note, by 50 % of the cash price per share paid by investors in the qualified financing (excluding conversions of August 2025 Notes or other convertible instruments).

This resulting share total would be rounded down to the nearest whole number of shares, and the conversion price per share would not exceed $ 34.0131 .

A “qualified financing” means the issuance and sale, in a single transaction or series of related transactions, of the Company’s equity securities resulting in aggregate proceeds to the Company of equal to or more than $ 20.0 million (including the conversion of the August 2025 Notes, less any Interest) in exchange for cash.

The mandatory conversion feature upon a qualified financing event would automatically convert into stock of the same class and series (the “New Equity”) of the Company’s securities that is issued by the Company in the qualified financing.

A “non-qualified financing” means the issuance and sale, in a single transaction or series of related transactions of the Company’s equity securities resulting in aggregate proceeds to the Company of less than $ 20.0 million (including the conversion of the August 2025 Notes, less any Interest) in exchange for cash.

An “acquisition event” means a Deemed Liquidation Event as defined in the Company’s Certificate of Incorporation, as amended from time to time.

Upon the consummation of the Merger, all principal and accrued interest of $ 1.3 million in respect to the August 2025 Notes was automatically converted into 2,177,459 shares of Series A Common Stock at price of $ 10.42 per share for a value of $ 22.7 million (share figure was 593,574 shares prior to the application of the merger exchange ratio in the Merger, which was closed on June 5, 2026).

NOTE 8 — CONVERTIBLE PROMISSORY NOTES

During January 2026, the Company issued the January 2026 Notes pursuant to which it could receive proceeds up to $ 5.3 million.

The January 2026 Notes bore interest of 5 % per annum and had a maturity dates of either August 1, 2028 or January 1, 2029.

The January 2026 Notes provided the holders with certain conversion features including:

a mandatory conversion upon a qualified financing event, an optional conversion upon a non-qualified financing event and an optional conversion upon an acquisition of the Company.

Concurrently with the issuance of the January 2026 Notes, the Company entered into a partnership agreement with a note holder.

Pursuant to the partnership agreement, the Company could receive up to $ 2.2 million in total consideration.

The deliverables of the partnership agreement coincided with payments to the Company on the convertible note.

Deliverables under the partnership agreement were aligned with, and contingent upon, funding milestones under the convertible note, which provided for up to $ 1.3 million in aggregate principal funding to the Company of which $ 1.3 million of proceeds have been received as of June 30, 2026.

The note holder had the option to request funding in part or in full.

In addition, the partnership agreement includes up to $ 0.9 million of consideration for the performance of research and development services to the note holder.

Upon the consummation of the Merger, all principal and accrued interest in respect to the January 2026 Notes was automatically converted into 633,988 shares of Series A Common Stock at price of $ 10.06 per share for a value of $ 6.6 million (share figure was 172,823 shares prior to the application of the merger exchange ratio in the Merger, which was closed on June 5, 2026).

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

NOTE 9 — COMMITMENTS AND CONTINGENCIES

The Company’s leases include various operating leases for offices, laboratory space, and storage space, expiring at various dates through November 2032.

Many leases include one or more options to renew.

The Company does not assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably certain.

The Company’s finance lease for the facility in Methuen, Massachusetts was terminated in October 2025.

Fixed rent generally escalates each year, and the Company is responsible for a portion of the landlords’ operating expenses such as property tax, insurance, and common area maintenance.

For additional information, please read Note 8, Commitments and Contingencies , to the audited financial statements included in the Company’s audited annual consolidated financial statements for the year ended December 31, 2025, included in the proxy statement/prospectus filed by CGC on May 6, 2026.

Private Issuance

The Company entered into an agreement with Clear Street LLC (“Clear Street”) in June 2026, pursuant to which Clear Street agreed to act as capital markets advisor to the Company for a term of twelve months .

As consideration for these services, the agreement provides for the issuance to Clear Street of 100,000 shares of the Company’s Series A Common Stock.

As of June 30, 2026, certain awards covering 100,000 shares of common stock remained subject to pending authorization of the underlying shares.

Because the grant-date criteria under ASC Topic 718, Compensation—Stock Compensation (“ASC 718”).

had not been satisfied, the awards were accounted for as liability-classified awards and remeasured to fair value at June 30, 2026.

As of June 30, 2026, the Company has recorded a $ 1.1 million liability within accrued expenses on the Company’s condensed consolidated balance sheet.

The liability is subject to remeasurement under ASC 718 until the shares are authorized and issued.

Legal Proceedings

From time to time, the Company may be subject to legal claims or be party to legal proceedings arising in the normal course of business.

While the outcome of such claims or proceedings cannot be predicted with certainty, the Company’s management expects that any such liabilities, to the extent not provided for by insurance or otherwise, would not have a material effect on the Company’s financial condition, results of operations or cash flows.

The Company is party to an arbitration, initiated on March 14, 2025, before the International Centre for Dispute Resolution.

A hearing was conducted in June 2026, and post-hearing submissions were made in July 2026.

The hearing is regarding a contractual dispute in which a vendor is seeking $ 4.9 million in damages, interest, and other relief.

The Company does not believe that such payment is owed, is defending against such claims, and it has asserted counterclaims.

The Company believes that a loss is neither probable nor remote and is unable to reasonably estimate the amount or range of possible loss due to the stage of the proceedings and the uncertainty regarding the resolution of the competing claims.

NOTE 10 — REDEEMABLE CONVERTIBLE PREFERRED STOCK

Prior to the Merger (see Note 3 — Reverse Recapitalization), Legacy Factorial had outstanding shares of redeemable convertible preferred stock across four series:

Series A, Series B-1, Series C, and Series D (collectively, the "Preferred Stock").

The rights, preferences, and privileges of the Preferred Stock, including dividend, liquidation, conversion, voting, and redemption features, are described in the Company's annual report for the year ended December 31, 2025 included in the Company’s Registration Statement on Form S-4/A.

Immediately prior to the closing of the Merger, all outstanding shares of Preferred Stock automatically converted into an equivalent number of shares of Legacy Factorial common stock on a one -to-one basis.

As the conversion occurred pursuant to the Preferred Stock's original terms rather than as a result of a deemed liquidation event, no accretion to redemption value was recognized in connection with the conversion, and the Company recognized no gain or loss upon conversion.

The aggregate carrying value was $ 249.7 million, which was unchanged from December 31, 2025 was reclassified into stockholders’ deficit on our condensed consolidated balance sheet.

Following the conversion, and in connection with the Merger, the converted shares of Legacy Factorial common stock were converted into shares of the Series A Common Stock at the Exchange Ratio (as defined in Note 3 — Reverse Recapitalization ).

As a result, no shares of Preferred Stock remain authorized, issued, or outstanding as of June 30, 2026, and the Company has no shares of preferred stock designated or outstanding as of that date.

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

The following table summarizes activity related to the Preferred Stock for the six months ended June 30, 2026:

Shares Outstanding as of Conversion Factorial

December 31, 2025 Ratio Shares Issued

Series A-1 1,234,568 3.6684 4,528,900

Series A-2 2,362,204 3.6684 8,665,524

Series B-1 2,718,539 3.6684 9,972,682

Series C-1 3,570,724 3.6684 13,098,851

Series C-2 2,513,698 3.6684 9,221,245

Series D 5,950,204 3.6684 21,827,755

Total 18,349,937 67,314,957

NOTE 11 — STOCKHOLDERS' EQUITY

In May 2026, in connection with the de-SPAC Transaction, the Company filed a new certificate of incorporation, which authorized the issuance of up to 750,000,000 , which shall consist of two classes as follows:

650,000,000 shares designated as common stock, par value $ 0.00001 per share, which is subdivided into two series consisting of 600,000,000 shares designated as Series A Common Stock and 50,000,000 shares designated as Series B Common Stock;

and 100,000,000 shares designated as preferred stock, par value $ 0.00001 per share.

Each share of Series A Common Stock entitles the holder to one vote, and each share of Series B Common Stock entitles the holder to 10 votes, on all matters submitted to a vote of the Company’s stockholders.

NOTE 12 — WARRANTS

Warrant Liability Series B-1

In connection with the issuance of Series B-1 redeemable convertible preferred stock of the Company (“Series B-1”) on October 28, 2019, the Company entered into a warrant agreement with Massachusetts Development Finance Agency, or its registered assignees to purchase 19,930 Series B-1 redeemable convertible preferred stock (“Series B-1 Warrant Agreements”).

The warrant was issued at a purchase price of $ 0.81 per share, with a maturity date of February 1, 2029, or the closing of the Company’s Initial Public Offering.

Upon the consummation of the Merger, the Series B-1 warrants were exercised cashless for 71,779 shares of Series A Common Stock (share figure was 19,930 shares prior to the application of the merger exchange ratio in the Merger, which was closed on June 5, 2026).

Warrant Liability Series D

In connection with the issuance of Series D redeemable convertible preferred stock of the Company (“Series D”) on November 30, 2021, the Company entered into a warrant agreement for preferred stock (the “Series D Warrant Agreement”) with each of Mercedes-Benz Investment Company LLC and Stellantis (each a “Holder”).

Upon closing of the Series D Agreement, Mercedes-Benz Investment Company LLC and its affiliates (“Mercedes-Benz”) and Stellantis became related parties to the Company.

During 2022, the Series D Warrant Agreements were amended and restated with both Stellantis and Mercedes-Benz to eliminate certain milestone-based provisions (the “Amended Warrants”).

The Amended Warrants modified the original agreements by setting the number of shares issuable upon exercise at a fixed 137,814 shares per Holder at a fixed price of $ 27.21 per share.

The warrants had a maturity date of February 1, 2029, or the closing of the Company’s initial public offering.

The Amended Warrants remained consistent with the Series D Warrant Agreements to require settlement through the issuance of the then most senior redeemable convertible preferred stock of the Company to the Holder.

At inception, the monetary value of the obligation was based on a fixed monetary amount known at inception.

Upon the consummation of the Merger, the Amended Warrants were exercised cashless for 291,066 shares of Series A Common Stock (share figure was 79,344 shares prior to the application of the merger exchange ratio in the Merger, which was closed on June 5, 2026).

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

Simultaneously, with the Merger and related transactions described in Note 3 – Reverse Recapitalization , all outstanding warrants at that time were converted from warrants to acquire CGC Class A Shares to warrants to acquire Series A Common Stock (the “Warrants”).

An amended BCA was entered into contemporaneously with the business combination closing on the Closing Date to reflect the post-combination entity, share-class and updated terms.

The post-combination Warrant quantity, exercise price, and holders did not change for any of the warrant classes as of the Closing Date.

Public Warrants

As of June 30, 2026, 13,800,000 Public Warrants were outstanding:

there were no exercises or issuances during 2026.

Each whole Public Warrant entitles the holder to purchase one share of Series A Common Stock at a price of $ 11.50 per share beginning on July 5, 2026, subject to restrictions as described further.

Public Warrants may only be exercised for a whole number of shares.

No fractional Public Warrants will be issued.

The Public Warrants will expire on June 5, 2031 or earlier upon redemption or liquidation.

Public Warrant holders do not have the rights or privileges of holders of Series A Common Stock nor any voting rights until they exercise their warrants and receive shares of Series A Common Stock.

The Company will not be obligated to deliver any share of Series A Common Stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Series A Common Stock underlying the warrants is then effective and a prospectus relating thereto is current.

No warrant will be exercisable and the Company will not be obligated to issue shares of Series A Common Stock upon exercise of a warrant unless the shares of Series A Common Stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless.

In no event will the Company be required to net cash settle any warrant.

In the event that a registration statement is not effective for the exercised warrants, the purchaser of a Unit containing such warrant will have paid the full purchase price for the Unit solely for the Class A ordinary share underlying such Unit.

Under the terms of the warrant agreement, the Company has agreed that, as soon as practicable, but in no event later than 20 business days after the closing of its initial Business Combination, it will use commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement for the Initial Public Offering or a new registration statement covering the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants and thereafter will use its commercially reasonable efforts to cause the same to become effective within 60 business days following the Company’s initial Business

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

Combination and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement.

If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth ( 60 th ) business day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.

Notwithstanding the above, if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

If the holders exercise their public warrants on a cashless basis, they would pay the warrant exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” of the Class A ordinary shares over the exercise price of the warrants by (y) the fair market value.

The “fair market value” is the average closing price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable.

Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $ 18.00 :

In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the shares of Series A Common Stock underlying such unit.

Redemption of Warrants

When the price per share of Series A Common Stock equals or exceeds $ 18.00 and there is an effective registration statement covering the issuance of the Series A Common Stock issuable upon exercise of the Warrants:

The Company may redeem the outstanding warrants:

2 unchanged sentences

• Upon a minimum of 30 days’ prior written notice of redemption (the “ 30 -day redemption period”);

● if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ 18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within a 30 - trading day period commencing at least 30 days after completion of the Company’s initial Business Combination and ending three business days before the Company sends the notice of redemption to the warrant holders.

In addition, if (x) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial Business Combination at an issue price or effective issue price of less than $ 9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our initial shareholders or their affiliates, without taking into account any founder shares held by our initial shareholders or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds (including from such issuances and from our Initial Public Offering), and interest thereon, available for the funding of our initial Business Combination on the date of the consummation of our initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of our Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial Business Combination (such price, the “Market Value”) is below $ 9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, and the $ 18.00 per share redemption trigger price above be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and the Newly Issued Price.

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

Additionally, if the number of outstanding Class A ordinary shares is increased by a share capitalization payable in Class A ordinary shares, or by a subdivision of ordinary shares or other similar event, then, on the effective date of such share capitalization, subdivision or similar event, the number of Class A ordinary shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding ordinary shares.

A rights offering made to all or substantially all holders of ordinary shares entitling holders to purchase Class A ordinary shares at a price less than the fair market value will be deemed a share capitalization of a number of Class A ordinary shares equal to the product of (i) the number of Class A ordinary shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A ordinary shares) and (ii) the quotient of (x) the price per Class A ordinary share paid in such rights offering and (y) the fair market value.

For these purposes (i) if the rights offering is for securities convertible into or exercisable for Class A ordinary shares, in determining the price payable for Class A ordinary shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of Class A ordinary shares as reported during the ten ( 10 ) trading day period ending on the trading day prior to the first date on which the Class A ordinary shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

PRIVATE PLACEMENT

Simultaneously with the closing of the Initial Public Offering on May 5, 2025, the Sponsor and Cantor purchased an aggregate of 6,800,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $ 11.50 per share, at a price of $ 1.00 per Private Placement Warrant, generating gross proceeds of $ 6,800,000 .

Of those 6,800,000 Private Placement Warrants, the Sponsor purchased 4,400,000 Private Placement Warrants and Cantor purchased 2,400,000 Private Placement Warrants.

Each Private Placement Warrant entitles the registered holder to purchase one Class A ordinary share at a price of $ 11.50 per share, subject to adjustment.

The Private Placement Warrants are identical to the public warrants sold in the Initial Public Offering except that, so long as they are held by the Sponsor, Cantor, or their permitted transferees, the Private Placement Warrants (i) may not (including the Class A ordinary shares issuable upon exercise of these Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of the initial Business Combination, (ii) will be entitled to registration rights and (iii) with respect to Private Placement Warrants held by Cantor and/or its designees, will not be exercisable more than five years from the commencement of sales in the Initial Public Offering in accordance with Financial Industry Regulatory Authority (“FINRA”) Rule 5110(g)(8).

The Sponsor, DirectorCo, and the Company’s officers and directors have entered into letter agreements with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination;

(ii) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to the Articles (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100 % of the public shares if the Company has not consummated an initial Business Combination within the Completion Window or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity;

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

RELATED PARTY TRANSACTIONS

Founder Shares

On November 12, 2024, the Sponsor and DirectorCo made a capital contribution of an aggregate of $ 25,000 , or approximately $ 0.004 per share, to cover certain of the Company’s expenses, for which the Company issued an aggregate of 5,750,000 founder shares to the Sponsor and DirectorCo.

On May 1, 2025, pursuant to a share recapitalization, the Company issued an additional 1,150,000 founder shares to the Sponsor (with DirectorCo waiving its entitlement to be issued additional founder shares in connection therewith and directing the Company to issue its allotment to the Sponsor), resulting in the Company’s initial shareholders holding an aggregate of 6,900,000 founder shares.

On May 2, 2025, the underwriters exercised their over-allotment option in full, which was settled as part of the closing of the Initial Public Offering.

As a result of the underwriters’ election to fully exercise their over-allotment option, 900,000 founder shares are no longer subject to forfeiture by the Sponsor.

The Company’s initial shareholders have agreed not to transfer, assign or sell any of their founder shares and any Class A ordinary shares issued upon conversion thereof until the earlier to occur of (i) one year after the completion of the initial Business Combination or (ii) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction after the initial Business Combination that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.

Any permitted transferees will be subject to the same restrictions and other agreements of the Company’s initial shareholders with respect to any founder shares (the “Lock-up”).

Notwithstanding the foregoing, if the closing price of the Class A ordinary shares equals or exceeds $ 12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading day period commencing at least 150 days after the initial Business Combination, the founder shares will be released from the Lock-up.

Promissory Note — Related Party

The Sponsor had agreed to loan the Company an aggregate of up to $ 250,000 to be used for a portion of the expenses of the Initial Public Offering.

The loan was non-interest bearing, unsecured and due at the earlier of May 31, 2025 or the closing of the Initial Public Offering.

As of May 5, 2025, the Company had borrowed $ 250,000 under the Sponsor Promissory Note and was simultaneously paid with the closing of the Initial Public Offering.

Borrowings under the Sponsor Promissory Note are no longer available.

Administrative Services Agreement

Commencing on May 1, 2025, the effective date of the registration statements for the Initial Public Offering, the Company entered into an agreement with the Sponsor to pay an aggregate of $ 10,000 per month for office space, utilities, and secretarial and administrative support.

For the three months ended March 31, 2026 and 2025, the Company incurred $ 30,000 and $ 0 , respectively, in fees for these services.

As of March 31, 2026 and December 31, 2025, the Company had accrued $ 60,000 and $ 30,000 on the condensed balance sheets, respectively.

Related Party Loans

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required.

If the Company completes a Business Combination, the Company would repay the Working Capital Loans.

In the event that a Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans.

Up to $ 1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $ 1.00 per warrant at the option of the lender.

The warrants would be identical to the Private Placement Warrants.

As of March 31, 2026 and December 31, 2025, no such Working Capital Loans were outstanding.

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

COMMITMENTS AND CONTINGENCIES

Risks and Uncertainties

The United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing global conflicts in the Middle East, Europe, and Latin America.

Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyberattacks against U.S.

Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.

On July 4, 2025, the U.S.

government enacted tax reform, commonly referred to as the One Big Beautiful Bill Act (“OBBB”).

OBBB amends U.S.

tax law, including provisions related to bonus depreciation, interest expense limitation, research and development, global intangible low-taxed income, foreign derived intangible income and base erosion and anti-abuse tax.

The Company evaluated the provisions of the OBBB and determined that adoption of the new law did not have a material impact on its unaudited condensed financial statements or related disclosures.

Any of the above mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions, could adversely affect the Company’s search for an initial Business Combination and any target business with which the Company may ultimately consummate an initial Business Combination.

Registration Rights

The holders of the founder shares (and the Class A ordinary shares issuable upon conversion of the founder shares), Private Placement Warrants (and the Class A ordinary shares underlying such Private Placement Warrants), and private placement equivalent-warrants that may be issued upon conversion of the Working Capital Loans have registration rights to require the Company to register a sale of any of the Company’s securities held by them and any other securities of the Company acquired by them prior to the consummation of the initial Business Combination pursuant to a registration rights agreement signed on May 1, 2025, the effective date of the registration statements for the Initial Public Offering.

The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities.

In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination.

Notwithstanding anything to the contrary, Cantor may only make a demand on one occasion and only during the five-year period beginning from the commencement of sales in the Initial Public Offering.

In addition, Cantor may participate in a “piggy-back” registration only during the seven-year period beginning from the commencement of sales in the Initial Public Offering.

The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The Company granted the underwriters a 45 -day option from May 1, 2025, the effective date of the registration statements for the Initial Public Offering, to purchase up to an additional 3,600,000 Units to cover over-allotments, if any, at the Initial Public Offering price less underwriting discounts and commissions.

On May 2, 2025, the underwriters fully exercised their over-allotment option, closing on the 3,600,000 additional Units simultaneously with the Initial Public Offering.

The underwriters were entitled to a cash underwriting discount of $ 4,800,000 , which was paid in cash to the underwriters at the closing of the Initial Public Offering.

Additionally, the underwriters are entitled to a deferred underwriting discount of 4.50 % of the gross proceeds of the Initial Public Offering held in the Trust Account, other than the gross proceeds from Units sold pursuant to the underwriters’ over-allotment option, and 6.50 % of the gross proceeds from Units sold pursuant to the underwriters’ over-allotment option, or $ 13,140,000 in the aggregate upon the completion of the Company’s initial Business Combination subject to the terms of the underwriting agreement.

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

On December 17, 2025, the Company entered into a Fee Modification Agreement with Cantor in connection with its contemplated business combination with Factorial Inc., pursuant to which Cantor agreed to modify the previously agreed $ 13,140,000 deferred underwriting commission.

If the business combination with Factorial Inc.

is consummated, the Company (or the target or successor) will pay Cantor a non-refundable modified deferred fee payable at closing equal to $ 3.75 million plus amounts based on the value of public shares not redeemed in the transaction, subject to an aggregate cap of $ 13.0 million.

Business Combination Agreement

On December 17, 2025, the Company, Fenway MS, Inc., a Delaware corporation (“Merger Sub”), and Factorial Inc., a Delaware corporation (“Factorial”), entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”).

The Business Combination Agreement and the transactions contemplated thereby (the “Business Combination”) were unanimously approved by the boards of directors and special committees comprised of independent and disinterested members of the boards of directors of each of the Company and Factorial.

The Business Combination is expected to close in mid-2026, following the receipt of the requisite approvals of the Company’s shareholders and Factorial stockholders and the fulfillment of other customary closing conditions.

Amendment to Business Combination Agreement

On March 26, 2026, the Company, Merger Sub and Factorial entered into an Amendment to the Business Combination Agreement (the “BCA Amendment”).

The BCA Amendment, among other things, (A) amends the sixth paragraph of the Preamble and inserts a new clause (a) into Section 2.1 of the Business Combination Agreement to provide that the redemption of the Company’s shares in connection with the Closing of the Business Combination (the “Shareholder Redemption”) shall occur at least one day prior to the Domestication, thereby clarifying the timing and sequencing of the Shareholder Redemption relative to the Domestication;

(B) amends certain definitions, including the definition of “Ancillary Documents” to remove references to the “CGC Private Warrant Exchange Agreement”, the definition of “Company Convertible Notes” to mean any convertible note or other equity-linked debt instrument convertible into Equity Securities of the Company or any of its subsidiaries outstanding as of the Merger Effective Time;

(C) amends clause (b)(iii) of Section 5.8 of the Business Combination Agreement to bifurcate the previously singular “Nasdaq Proposal” into two distinct proposals to be submitted to the Company’s shareholders for approval:

(i) the adoption and approval of the issuance of shares in connection with the transactions contemplated by the Business Combination Agreement and (ii) the adoption and approval of the issuance of shares in connection with the PIPE Financing (as defined below), and consequently update the definition of “Nasdaq Proposal” to read “Nasdaq Proposals;” and (D) amend and restate Sections 5.21 and 5.22 of the Business Combination Agreement to remove the provisions related to an exchange of the Company’s Public Warrants and Private Placement Warrants (the “Warrant Exchange”).

Sponsor Support Agreement

Concurrently with the execution of the Business Combination Agreement, the Company, Sponsor and Factorial entered into the Sponsor Support Agreement (the “Sponsor Support Agreement”), pursuant to which the Sponsor, as a holder of the Company’s Class B ordinary shares (the “Sponsor Shares”), has agreed to, among other things, (i) vote in favor of the Business Combination Agreement and the Business Combination, (ii) waive any adjustment to the conversion ratio set forth in the governing documents of the Company or any other anti-dilution or similar protection with respect to the Class B ordinary shares (whether resulting from the transactions contemplated by the Business Combination Agreement or otherwise), (iii) be bound by certain other covenants and agreements related to the Business Combination, (iv) be bound by certain transfer restrictions with respect to its shares in the Company prior to the closing of the Business Combination, (v) be subject to certain transfer restrictions provided in the bylaws to of New Factorial become effective at the closing of the Business Combination, and (vi) waive redemption rights with respect to the Sponsor Shares, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.

On March 26, 2026, Sponsor and Factorial entered into an Amendment to the Sponsor Support Agreement (the “SSA Amendment”).

The SSA Amendment (a) deletes the provision in Section 1 of the Sponsor Support Agreement that required the Sponsor, until the closing of the Business Combination or the earlier termination of the Business Combination Agreement, to cause all of its Private

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

Placement Warrants to be present for quorum purposes at any meeting or written consent of the Company warrant holders and to vote or consent such warrants in favor of the warrant agreement amendment contemplated by the Warrant Exchange;

and (b) amends and restates Section 2 of the Sponsor Support Agreement in its entirety to read “[Reserved.],” thereby removing the provisions relating to the Warrant Exchange.

PIPE Financing

Concurrently with the execution of the Business Combination Agreement, the Company entered into a Stock Purchase Agreement (the “Sponsor Stock Purchase Agreement”) with an affiliate of the Sponsor (the “Sponsor Investor”) and a Stock Purchase Agreement (the “Institutional Investor Stock Purchase Agreement,” and together with the Sponsor Stock Purchase Agreement, “Investor Stock Purchase Agreements”) with a certain institutional investor (the “Institutional Investor,” and together with the Sponsor Investor, the “PIPE Investors”).

Pursuant to the Investor Stock Purchase Agreements, the PIPE Investors agreed to subscribe for and purchase, and the Company agreed to issue and sell to the PIPE Investors, at the closing of the Business Combination, an aggregate of 9,927,184 shares of New Factorial Series A Common Stock, at an average subscription price of $ 10.08 per share (assuming a Redemption Price (as defined in the Company’s certificate of incorporation) of $ 10.30 per share) for aggregate gross proceeds of $ 100,000,000 (the “PIPE Financing”).

The Institutional Investor subscribed for 7,500,000 shares of New Factorial Series A Common Stock at a subscription price of $ 10.00 per share, and the Sponsor Investor subscribed for 2,427,184 shares of New Factorial Series A Common Stock (assuming a Redemption Price of $ 10.30 per share) at a subscription price equal to the Redemption Price.

Pursuant to the Investor Stock Purchase Agreements, the Sponsor will transfer at the closing of the Business Combination (which transfer may be indirectly through forfeiture and reissuance) an aggregate of 750,000 shares of New Factorial Series A Common Stock to the Institutional Investor and 250,000 shares of New Factorial Series A Common Stock to the Sponsor Investor.

The average subscription prices are $ 9.09 per share and $ 9.34 per share for the Institutional Investor and the Sponsor Investor, respectively, assuming a Redemption Price of $ 10.30 per share and taking into account the foregoing transfers from the Sponsor.

Registration Rights Agreement

In connection with the closing of the Business Combination, New Factorial (the resulting post-Closing entity, “New Factorial”), Sponsor, Cantor and certain stockholders of Factorial will enter into an amended and restated registration rights agreement (the “Registration Rights Agreement”).

Pursuant to the Registration Rights Agreement, among other things, New Factorial will agree that, within 30 calendar days following the closing of the Business Combination, New Factorial will file with the SEC (at New Factorial’s sole cost and expense) a registration statement registering the resale of certain shares of New Factorial Series A Common Stock held by or issuable to the parties thereto (the “Resale Registration Statement”), and New Factorial will use its commercially reasonable efforts to have the Resale Registration Statement declared effective as soon as reasonably practicable after the filing thereof.

Such holders will be entitled to customary piggyback registration rights and demand registration rights, including underwritten demands.

SHAREHOLDERS’ DEFICIT

Preference Shares — The Company is authorized to issue a total of 1,000,000 preference shares at par value of $ 0.0001 each.

At March 31, 2026 and December 31, 2025, there were no preference shares issued or outstanding.

Class A Ordinary Shares — The Company is authorized to issue a total of 200,000,000 Class A ordinary shares at par value of $ 0.0001 each.

At March 31, 2026 and December 31, 2025, there were no shares of Class A ordinary shares issued or outstanding, excluding the 27,600,000 shares subject to possible redemption, respectively.

Class B Ordinary Shares — The Company is authorized to issue a total of 20,000,000 Class B ordinary shares at par value of $ 0.0001 each.

On November 12, 2024, the Company issued an aggregate of 5,750,000 Class B ordinary shares to the Sponsor and DirectorCo for $ 25,000 , or approximately $ 0.004 per share.

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

therewith and directing the Company to issue its allotment to the Sponsor), resulting in the Company’s initial shareholders holding an aggregate of 6,900,000 founder shares.

On May 2, 2025, the underwriters exercised their over-allotment option in full, which was settled as part of the closing of the Initial Public Offering.

As a result of the underwriters’ election to fully exercise their over-allotment option, 900,000 founder shares are no longer subject to forfeiture by the Sponsor.

The founder shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of the initial Business Combination or earlier at the option of the holder on a one -for-one basis, subject to adjustment for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein.

In the case that additional Class A ordinary shares, or any other equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to or in connection with the closing of the initial Business Combination, the ratio at which Class B ordinary shares convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, 20 % of the sum of (i) the total number of all Class A ordinary shares outstanding upon the completion of the Initial Public Offering (including any Class A ordinary shares issued pursuant to the underwriters’ over-allotment option and excluding the Class A ordinary shares underlying the Private Placement Warrants), plus (ii) all Class A ordinary shares and equity-linked securities issued or deemed issued, in connection with the closing of the initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination and any private placement-equivalent warrants issued to the Sponsor or any of its affiliates or to the Company’s officers or directors upon conversion of Working Capital Loans) minus (iii) any redemptions of Class A ordinary shares;

by public shareholders in connection with an initial business combination;

provided that such conversion of founder shares will never occur on a less than one-for-one basis.

Holders of record of the Company’s Class A ordinary shares and Class B ordinary shares are entitled to one vote for each share held on all matters to be voted on by shareholders.

Unless specified in the Articles or as required by the Companies Act (Revised) of the Cayman Islands, as the same may be amended from time to time, or stock exchange rules, an ordinary resolution under Cayman Islands law and the Articles, which requires the affirmative vote of at least a majority of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company, is generally required to approve any matter voted on by the Company’s shareholders.

Approval of certain actions requires a special resolution under Cayman Islands law, which (except as specified below) requires the affirmative vote of at least two-thirds of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company, and pursuant to the Articles, such actions include amending the Articles and approving a statutory merger or consolidation with another company.

There is no cumulative voting with respect to the appointment of directors, meaning, following the Company’s initial Business Combination, the holders of more than 50 % of the ordinary shares voted for the appointment of directors can elect all of the directors.

Prior to the consummation of the initial Business Combination, only holders of the Class B ordinary shares will (i) have the right to vote on the appointment and removal of directors and (ii) be entitled to vote on continuing the Company in a jurisdiction outside the Cayman Islands (including any special resolution required to amend the constitutional documents or to adopt new constitutional documents, in each case, as a result of approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands).

Holders of record of the Company’s Class A ordinary shares and Class B ordinary shares are entitled to one vote for each share held on all matters to be voted on by shareholders.

Prior to the consummation of the initial Business Combination, only holders of the Class B ordinary shares will (i) have the right to vote

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

on the appointment and removal of directors and (ii) be entitled to vote on continuing the Company in a jurisdiction outside the Cayman Islands (including any special resolution required to amend the constitutional documents or to adopt new constitutional documents, in each case, as a result of approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands).

Holders of the Class A ordinary shares will not be entitled to vote on these matters during such time.

These provisions of the Articles may only be amended if approved by a special resolution passed by the affirmative vote of at least 90 % (or, where such amendment is proposed in respect of the consummation of the initial Business Combination, two-thirds) of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company.

FAIR VALUE MEASUREMENTS

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date.

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Quoted prices in active markets for identical assets or liabilities.

An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Observable inputs other than Level 1 inputs.

Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability.

March 31, 2026

December 31, 2025

Investments held in Trust Account

The fair value of the public warrants at issuance was $ 3,132,600 or $ 0.227 per public warrant.

The fair value of the private warrants at issuance was $ 1,567,638 or $ 0.231 per private warrant.

The fair value of public and private warrants were determined using Monte Carlo Simulation Model.

The public and private warrants have been classified within shareholders’ deficit and will not require remeasurement after issuance.

The following table presents the quantitative information regarding market assumptions used in the valuation of the public and private warrants

Risk free rate

Market implied likelihood of completing a Business Combination

Weighted terms (Yrs)

CARTESIAN GROWTH CORPORATION III

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2026

The market implied likelihood of completing a Business Combination was determined by analyzing the quoted market prices of the rights for similar companies that included rights in their units.

The criteria used was:

IPO proceeds ($M)

Warrant coverage

Rights coverage (per unit)

Remaining months to complete

SEGMENT INFORMATION

ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers.

Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s CODM, or group, in deciding how to allocate resources and assess performance.

The Company’s CODM has been identified as the Chief Financial Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance.

Accordingly, management has determined that the Company only has one reportable segment.

The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss.

The measure of segment assets is reported on the condensed balance sheets as total assets.

When evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:

March 31, 2026

December 31, 2025

Investments held in Trust Account

For the Three Months Ended March 31,

General and administrative costs

Interest earned on investments held in Trust Account

General and administrative costs are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination or similar transaction within the Completion Window.

The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.

General and administrative costs are the significant segment expenses provided to the CODM on a regular basis.

SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date and through the date that the unaudited condensed financial statements were issued.

Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.

• if, and only if, the closing price of the shares of Series A Common Stock equals or exceeds $ 18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 -day trading period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

Additionally, if the number of outstanding shares of Series A Common Stock is increased by a share capitalization payable in Series A Common Stock, or by a subdivision of Series A Common Stock or other similar event, then, on the effective date of such share capitalization, subdivision or similar event, the number of shares of Series A Common Stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding shares of Series A Common Stock.

A rights offering made to all or substantially all holders of shares of Series A Common Stock entitling holders to purchase Series A Common Stock at a price less than the fair market value will be deemed a share capitalization of a number of Series A Common Stock equal to the product of (i) the number of Series A Common Stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Series A Common Stock) and (ii) one minus the quotient of (x) the price per Series A Common Stock paid in such rights offering and (y) the historical fair market value.

For these purposes (i) if the rights offering is for securities convertible into or exercisable for Series A Common Stock, in determining the price payable for Series A Common Stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) historical fair market value means the volume weighted average price of the Series A Common Stock as reported during the 10 trading day period ending on the trading day prior to the first date on which the

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

Series A Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

No Series A Common Stock shall be issued at less than their par value.

As of June 30, 2026, the value of outstanding Public Warrants of $ 3.1 million was recorded in additional paid-in capital.

This amount reflects the relative fair value allocated to the Public Warrants at original issuance in 2025 and has not been remeasured, consistent with their continuing equity classification.

The amendment to the Public Warrants did not result in any incremental fair value, as it was determined to be a non-substantive equity-to-equity modification.

Private Warrants

At June 30, 2026, 6,800,000 Private Warrants were outstanding.

The Private Warrants are identical to the Public Warrants, except that so long as they are held by the Sponsor or any of its permitted transferees:

• the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option and

• the Private Warrants are not redeemable by the Company.

The Private Warrants are subject to the Company’s redemption option at the price of $ 0.01 per warrant, if not held by the Sponsor or any of its permitted transferees, provided that the other conditions of such redemption are met, as described above.

If holders of the Private Warrants elect to exercise the warrants on a cashless basis, the holder would pay the exercise price by surrendering their Private Warrants for a number of shares of Series A Common Stock equal to:

• the quotient obtained by dividing (x) the product of the number of Series A Common Stock underlying the Warrants, multiplied by the excess of the average last reported sale price of the Series A Common Stock for ten trading days ending on the third trading day prior to the date on which notice of redemption is sent to the holders of the warrants (“Fair Market Value”) over the Warrant Price by (y) the Fair Market Value.

If the Private Warrants are held by a holder other than the Sponsor or any of its permitted transferees, the Private Warrants are redeemable by the Company in all redemption scenarios applicable to the Public Warrants and exercisable by such holders on the same basis as the Public Warrants.

The Private Warrants will expire on June 5, 2031.

Upon completion of the Merger, the Company evaluated the amended Private Warrants under ASC 815-40, in conjunction with the proxy statement/prospectus dated as of, and filed with the Securities and Exchange Commission pursuant to Rule 424(b) on, May 6, 2026, and concluded that they do not meet the criteria to be classified in shareholders’ equity.

Specifically, the terms of the warrants provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder, and, because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provision would preclude the warrant from being classified in equity and thus the warrants should be classified as a liability.

NOTE 13 — STOCK BASED COMPENSATION

Stock-based compensation expense for the three and six months ended June 30, 2026, and 2025 was classified in the Company’s condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Research and development $ 101 $ 218 $ 341 $ 565

Selling, general and administrative 937 1,531 2,231 5,041

Total $ 1,038 $ 1,749 $ 2,572 $ 5,606

Share options

During the six months ended June 30, 2026, the Company granted stock options for the purchase of 123,185 shares of Series A Common Stock with a weighted average exercise price of $ 6.94 per share and a weighted average grant-date fair value of $ 6.88 per share.

As of June 30, 2026, the unrecognized compensation cost related to outstanding stock options was $ 8.4 million, which is expected to be recognized over a weighted-average period of 2.7 years.

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

NOTE 14 — NET LOSS PER COMMON SHARE

Basic loss per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted‑average number of shares of common stock outstanding.

Diluted EPS is computed after adjusting the numerator and denominator of the basic EPS computation for the effects of all potentially dilutive shares of common stock.

The dilutive effect of the Private Warrants is computed using the “treasury stock” method.

Gains associated with the changes in the fair value of the Private Warrants are excluded from the numerator in computing diluted earnings per share because inclusion of such gains in the computation would be anti‑dilutive (in thousands, except share and per share data):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Net loss $ ( 11,341 ) $ ( 10,569 ) $ ( 19,916 ) $ ( 23,439 )

Weighted average number of shares of common stock outstanding 18,594,006 18,423,699 18,571,685 18,486,699

Net loss $ ( 11,341 ) $ ( 10,569 ) $ ( 19,916 ) $ ( 23,439 )

Change in fair value of Private Warrant liability ( 4,738 ) — ( 4,738 ) —

Adjusted net loss $ ( 16,079 ) $ ( 10,569 ) $ ( 24,654 ) $ ( 23,439 )

Weighted average number of shares of common stock outstanding 18,594,006 18,423,699 18,571,685 18,486,699

Dilutive effect of warrants - treasury stock method 340,273 — 171,076 —

Weighted average diluted shares of common stock outstanding 18,934,279 18,423,699 18,742,761 18,486,699

Basic loss per share:

$ ( 0.61 ) $ ( 0.57 ) $ ( 1.07 ) $ ( 1.27 )

Diluted loss per share:

$ ( 0.85 ) $ ( 0.57 ) $ ( 1.32 ) $ ( 1.27 )

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

The following common stock equivalents were excluded from the calculation of diluted loss per share attributable to common stockholders because their inclusion would have been anti-dilutive:

As of June 30,

Series A-1 redeemable convertible preferred stock — 4,528,900

Series A-2 redeemable convertible preferred stock — 8,665,524

Series B-1 redeemable convertible preferred stock — 9,972,682

Series C-1 redeemable convertible preferred stock — 13,098,851

Series C-2 redeemable convertible preferred stock — 9,221,245

Series D redeemable convertible preferred stock — 21,827,755

Series B-1 and Series D redeemable convertible preferred stock warrants — 1,084,228

Public Warrants 13,800,000 —

Options to purchase Series A Common Stock 19,589,342 18,180,825

Restricted stock units 5,116,217 5,190,513

NOTE 15 — SEGMENT INFORMATION

The Company conducts business as a single operating segment.

In reaching this conclusion, management considers the definition of the (“CODM”), how the business is defined by the CODM, the nature of the information provided to the CODM, and how that information is used to make operating decisions, allocate resources, and assess performance.

The Company’s CODM is the chief executive officer.

The results of operations provided to and analyzed by the CODM are at the consolidated level which is the level that the CODM manages the business, allocates resources, makes key resource decisions, and assesses performance.

The key measure of segment profit and loss that the CODM uses to allocate resources and assess performance is the Company’s net loss.

The table below shows a reconciliation of the Company’s net loss, including the significant expense categories regularly provided to and reviewed by the CODM, as computed under U.S.

GAAP to the Company’s total net loss in the condensed consolidated statements of operations and comprehensive loss:

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Operating expenses

Reimbursement from JDAs and others $ 198 $ 214 $ 3,608 $ 248

Payroll expense ( 5,880 ) ( 5,949 ) ( 11,740 ) ( 14,082 )

Occupancy expense ( 1,039 ) ( 1,516 ) ( 1,898 ) ( 3,013 )

Professional service expense ( 3,028 ) ( 673 ) ( 3,944 ) ( 1,279 )

Research and development expense ( 1,617 ) ( 991 ) ( 2,550 ) ( 1,528 )

Depreciation expense ( 920 ) ( 1,987 ) ( 1,802 ) ( 3,971 )

Other operating expense ( 675 ) ( 500 ) ( 1,126 ) ( 899 )

Loss from operations $ ( 12,961 ) $ ( 11,402 ) $ ( 19,452 ) $ ( 24,524 )

Total other income (expense), net 1,620 833 ( 464 ) 1,085

Net loss $ ( 11,341 ) $ ( 10,569 ) $ ( 19,916 ) $ ( 23,439 )

Assets provided to CODM are consistent with those reported on the condensed consolidated balance sheets with particular emphasis on the Company’s available liquidity, including its cash and cash equivalents reduced by current liabilities.

All long-lived assets are maintained in, and all losses are attributable to the United States of America and South Korea.

FACTORIAL ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share data)

NOTE 16 — RELATED PARTY TRANSACTIONS

Collaboration Arrangements

Uwe Keller, a member of the Company’s Board of Directors, represents Mercedes-Benz who is an investor in the Company’s Series A Common Stock.

For the three and six months ended June 30, 2026, the Company recognized no expense reimbursements for the services provided under the JDA with Mercedes-Benz.

For the three and six months ended June 30, 2025, the Company recognized $ 0.1 million and $ 0.1 million in expense reimbursements for the services provided under the JDA with Mercedes-Benz, which are recorded net within research and development expenses on the condensed consolidated statements of operations and comprehensive loss.

There were no amounts due from Mercedes-Benz as of June 30, 2026, and December 31, 2025.

Jon Nelson, a member of the Company’s Board of Directors, represents Stellantis who is an investor in the Company’s Series A Common Stock.

For the three and six months ended June 30, 2026, the Company recognized an insignificant amount in expense reimbursements for the services provided under the JDA with Stellantis.

For the three and six months ended June 30, 2025, the Company recognized no expense reimbursements for the services provided under the JDA with Stellantis.

There were no amounts due from Stellantis as of June 30, 2026.

Amounts due from Stellantis totaled $ 1.0 million which are included in receivables under collaboration agreements on the condensed consolidated balance sheets as of December 31, 2025.

In August 2025, the Company modified its existing JDA with Stellantis.

The modified JDA required the Company to make a $ 2.0 million payment to Stellantis for services related to the production and testing of a demo fleet, offsetting an investment of an equal amount in the purchase of August 2025 Notes described in Note 7 - Convertible Promissory Notes - Related Parties above.

The Company and Stellantis jointly developed a production timeline as outlined in the agreement, which includes deliverables of Stellantis to the Company through June 2027 such as, module and pack safety reports, battery management system results, installation and retrofitting of test cells, and validation results of the demo fleet.

In December 2025, the Company prepaid $ 2.0 million to Stellantis for these services.

As of June 30, 2026, and December 31, 2025, there was $ 0.7 million and $ 1.0 million included in prepaid expenses and other current assets, and an insignificant amount included in other non-current assets, respectively, on the condensed consolidated balance sheets.

During the three and six months ended June 30, 2026, $ 0.2 million and $ 0.4 million was recognized as part of the agreement and is included in research and development expenses on the condensed consolidated statements of operations and comprehensive loss.

Consulting Arrangement s

In March of 2020, the Company entered into a consulting services agreement with Joseph Taylor who also serves as Executive Chairman of the Company’s Board of Directors.

For the three months ended June 30, 2026 and 2025, the Company incurred $ 0.1 million and $ 0.1 million, and for the six months ended June 30, 2026 and 2025, the Company incurred $ 0.2 million and $ 0.1 million, respectively, in expenses for consulting services provided by Joseph Taylor recorded within selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

Amounts due to Joseph Taylor totaled $ 0.2 million as of December 31, 2025, and are included in accounts payable.

NOTE 17 — SUBSEQUENT EVENTS

On August 3, 2026, Factorial’s Korean subsidiary entered into a new lease agreement for a manufacturing site in Korea.

The term of the lease ends in July 2031 with total cash payments expected to be approximately $ 2.6 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements