UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from to
Commission File Number:
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(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 14, 2025, there were
REPUBLIC DIGITAL ACQUISITION COMPANY
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025
TABLE OF CONTENTS
i
Unless otherwise stated in this Report (as defined below), or the context otherwise requires, references to:
| ● | “Amended and Restated Articles” are to our Amended and Restated Memorandum and Articles of Association, currently in effect; |
| ● | “Business Combination” are to a merger, capital share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses; |
| ● | “Cantor” are to Cantor Fitzgerald & Co., the representative of the underwriters in the Initial Public Offering (as defined below); |
| ● | “Certifying Officers” are to our Chief Executive Officer and Chief Financial Officer, together; |
| ● | “Combination Period” are to the 24-month period, from the closing of the Initial Public Offering (as defined below) to May 1, 2027 (or such earlier date as determined by the Board), that we have to consummate an initial Business Combination; provided that the Combination Period may be extended pursuant to an amendment to the Amended and Restated Memorandum and consistent with applicable laws, regulations and stock exchange rules; |
| ● | “Company,” “our,” “we” or “us” are to Republic Digital Acquisition Company, a Cayman Islands exempted company; |
| ● | “Continental” are to Continental Stock Transfer & Trust Company, trustee of our Trust Account (as defined below) and warrant agent of our Public Warrants (as defined below); |
| ● | “Exchange Act” are to the Securities Exchange Act of 1934, as amended; |
| ● | “Founder Shares” are to the Class B ordinary shares initially purchased by our Sponsor prior to the Initial Public Offering and the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our Business Combination or earlier at the option of the holders thereof, as described herein (for the avoidance of doubt, such Class A ordinary shares will not be “Public Shares” (as defined below)); |
| ● | “GAAP” are to the accounting principles generally accepted in the United States of America; |
| ● | “Initial Public Offering” or “IPO” are to the initial public offering that we consummated on May 1, 2025; |
| ● | “Investment Company Act” are to the Investment Company Act of 1940, as amended; |
| ● | “IPO Promissory Note” are to that certain unsecured promissory note in the principal amount of up to $300,000 issued to our Sponsor on January 23, 2025; |
| ● | “IPO Registration Statement” are to the Registration Statement on Form S-1 initially filed with the SEC (as defined below) on February 28, 2025, as amended, and declared effective on April 30, 2025 (File No. 333-285386); |
| ● | “JOBS Act” are to the Jumpstart Our Business Startups Act of 2012; |
| ● | “Management” or our “Management Team” are to our executive officers and our directors; |
ii
| ● | “Nasdaq” are to the Nasdaq Global Market; |
| ● | “Nasdaq 36-Month Requirement” are to the requirement pursuant to the Nasdaq Rules (as defined below) that a SPAC (as defined below) must complete one or more Business Combinations within 36 months following the effectiveness of its initial public offering registration statement; |
| ● | “Nasdaq Rules” are to the continued listing rules of Nasdaq, as they exist as of the date of this Report. |
| ● | “Private Placement” are to the private placement of Private Placement Warrants (as defined below) that occurred simultaneously with the closing of our Initial Public Offering; |
| ● | “Private Placement Warrants” are to the warrants issued to our Sponsor and Cantor in the Private Placement; |
| ● | “Private Placement Warrants Purchase Agreements” are to the Private Placement Warrants Purchase Agreements, dated April 30, 2025, which we entered into with the Sponsor and Cantor, respectively; |
| ● | “Public Shares” are to the Class A ordinary shares sold as part of the Units (as defined below) in our Initial Public Offering (whether they were purchased in our Initial Public Offering or thereafter in the open market); |
| ● | “Public Shareholders” are to the holders of our Public Shares, including our Management Team to the extent the members of our Management Team purchase Public Shares, provided that each member of our Management Team’s status as a “Public Shareholder” will only exist with respect to such Public Shares; |
| ● | “Public Warrants” are to the redeemable warrants sold as part of the Units in our Initial Public Offering (whether they were subscribed for in our Initial Public Offering or purchased in the open market); |
| ● | “Report” are to this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025; |
| ● | “SEC” are to the U.S. Securities and Exchange Commission; |
| ● | “Securities Act” are to the Securities Act of 1933, as amended; |
| ● | “SPAC” are to a special purpose acquisition company; |
| ● | “Sponsor” are to Republic Sponsor 1 LLC, a Delaware limited liability company; |
| ● | “Trust Account” are to the U.S.-based trust account in which an amount of $300,000,000 from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Warrants in the Private Placement were initially placed following the closing of the Initial Public Offering; |
| ● | “Units” are to the units sold in our Initial Public Offering, which consist of one Public Share and one-half of one Public Warrant; |
| ● | “Warrants” are to the Private Placement Warrants and the Public Warrants, together; and |
| ● | “Working Capital Loans” are to funds that, in order to provide working capital or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of our directors and officers may, but are not obligated to, loan us. |
iii
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
REPUBLIC DIGITAL ACQUISITION COMPANY
UNAUDITED CONDENSED BALANCE SHEET
JUNE 30, 2025
| Assets: | ||||
| Current asset | ||||
| Cash | $ |
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| Prepaid expenses |
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| Total current asset |
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| Long-term prepaid insurance |
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| Investments held in Trust Account |
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| Total Assets | $ |
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| Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit | ||||
| Current liabilities | ||||
| Accrued offering costs | $ |
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| Accounts payable and accrued expenses |
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| Total current liabilities |
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| Deferred underwriting fee |
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| Total Liabilities |
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| Commitments and Contingencies (Note 6) | ||||
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Class A ordinary shares subject to possible redemption,
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| Shareholders’ Deficit | ||||
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Preference shares, $
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Class A ordinary shares, $
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Class B ordinary shares, $
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| Additional paid-in capital | ||||
| Accumulated deficit |
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| Total Shareholders’ Deficit |
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| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit | $ |
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The accompanying notes are an integral part of the unaudited condensed financial statements.
1
REPUBLIC DIGITAL ACQUISITION COMPANY
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2025 AND FOR THE PERIOD FROM JANUARY 23, 2025 (INCEPTION) THROUGH JUNE 30, 2025
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For the
Three Months Ended June 30, |
For the Period from
January 23, 2025 (Inception) Through June 30, |
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| 2025 | 2025 | |||||||
| General and administrative costs | $ |
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$ |
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| Loss from operations |
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| Other income: | ||||||||
| Earnings from investments held in Trust Account |
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| Interest income - operating account |
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| Other income |
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| Net income | $ |
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$ |
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| Weighted average Class A Ordinary Shares outstanding - basic |
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| Basic net income per Class A Ordinary Share | $ |
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$ |
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| Weighted average Class A Ordinary Shares outstanding - diluted |
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| Diluted net income per Class A Ordinary Share | $ |
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$ |
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| Weighted average Class B Ordinary Shares outstanding - basic |
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| Basic net income per Class B Ordinary Share | $ |
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$ |
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| Weighted average Class B Ordinary Shares outstanding - diluted |
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| Diluted net income per Class B Ordinary Share | $ |
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$ |
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The accompanying notes are an integral part of the unaudited condensed financial statements.
2
REPUBLIC DIGITAL ACQUISITION COMPANY
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED JUNE 30, 2025 AND FOR THE PERIOD FROM JANUARY 23, 2025 (INCEPTION) THROUGH JUNE 30, 2025
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Class A
Ordinary Shares |
Class B
Ordinary Shares |
Additional Paid-in | Accumulated | Total Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance — January 23, 2025 | $ | $ | $ | $ | ||||||||||||||||||||||||
| Class B Ordinary Shares issued to Sponsor | — |
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| Net loss | — | — |
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| Balance – March 31, 2025 |
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| Accretion for Class A Ordinary Shares to redemption amount | — | — |
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| Sale of Private Placement Warrants | — | — |
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| Fair Value of Public Warrants at issuance | — | — |
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| Allocated value of transaction costs to Class A Ordinary Shares | — | — |
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| Forfeiture of Founder Shares | — |
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| Net income | — | — |
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| Balance – June 30, 2025 | $ |
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$ |
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$ | $ |
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The accompanying notes are an integral part of the unaudited condensed financial statements.
3
REPUBLIC DIGITAL ACQUISITION COMPANY
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 23, 2025 (INCEPTION) THROUGH JUNE 30, 2025
| Cash Flows from Operating Activities: | ||||
| Net income | $ |
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| Adjustments to reconcile net income to net cash used in operating activities: | ||||
| Payment of general and administrative costs through IPO Promissory Note – related party |
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| Earning from investments held in Trust Account |
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| Changes in operating assets and liabilities: | ||||
| Prepaid expenses and other current assets |
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| Accounts payable and accrued expenses |
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| Net cash used in operating activities |
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| Cash Flows from Investing Activities: | ||||
| Investment of cash in Trust Account |
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| Net cash used in investing activities |
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| Cash Flows from Financing Activities: | ||||
| Proceeds from sale of Units, net of underwriting discounts paid |
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| Proceeds from sale of Private Placements Warrants |
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| Due from Sponsor |
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| Repayment of IPO Promissory Note – related party |
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| Payment of offering costs |
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| Net cash provided by financing activities |
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| Net Change in Cash |
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| Cash – Beginning of period | ||||
| Cash – End of period | $ |
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| Non-Cash investing and financing activities: | ||||
| Deferred offering costs included in accrued offering costs | $ |
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| Deferred offering costs paid through IPO Promissory Note - related party | $ |
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| Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares | $ |
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| Accretion for Class A ordinary shares to redemption amount | $ |
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| Deferred underwriting fee payable | $ |
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| Deferred offering costs charged to additional paid-in capital | $ |
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| Forfeiture of Founder Shares | $ |
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The accompanying notes are an integral part of the unaudited condensed financial statements.
4
REPUBLIC DIGITAL ACQUISITION COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
Note 1 — Organization and Business Operations
Republic Digital Acquisition Company (the “Company”) is a blank check company incorporated as a Cayman Islands exempted corporation on January 23, 2025. 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”). The Company has not selected any specific Business Combination target, and the Company has not, nor has 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 June 30, 2025, the Company has not commenced any operations. All activity for the period from January 23, 2025 (inception) through June 30, 2025 relates to the Company’s formation, the initial public offering consummated on May 1, 2025 (the “Initial Public Offering”), which is described below in Note 3, 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. The Company will generate non-operating income in the form of interest or dividends income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
The Registration Statement on Form S-1 for the
Company’s Initial Public Offering, initially filed with the Securities and Exchange Commission (the “SEC”) on February
28, 2025, as amended (File No. 333-285386), was declared effective on April 30, 2025 (the “IPO Registration Statement”). On
May 2, 2025, the Company consummated the Initial Public Offering of
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of
Transaction costs amounted to $
The Company’s executive officers and directors (“Management” or “Management Team”) 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 fees).
The Company’s Business Combination must
be with one or more target businesses that together have a fair market value equal to at least
5
Following the closing of the Initial Public Offering,
on May 2, 2025, an amount of $
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 an 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), divided by the number of then outstanding Public Shares, subject to the limitations. The amount in the Trust Account is
initially valued at $
The Ordinary Shares (as defined in Note 5) 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 has the duration of the Combination
Period to complete the initial Business Combination. However, if the Company is unable to complete its initial Business Combination within
the Combination Period, 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
earnings from the funds held in the Trust Account (less taxes payable, if any, and up to $
6
The Sponsor, officers, and directors have entered into a letter agreement with the Company, dated April 30, 2025 (the “Letter Agreement”), pursuant to which they have agreed to (i) waive their redemption rights with respect to their Founder Shares (as defined in Note 5) 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 Company’s Amended and Restated 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 Combination Period, 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 Combination Period 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 Exchange Act, which would not be voted in favor of approving the Business Combination) in favor of the initial Business Combination.
The Company’s 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,
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) $
On June 23, 2025, the Class A Ordinary Shares and the Warrants included in the Units began separately trading on the Nasdaq Global Market.
Note 2 — Summary of Significant Accounting Policies
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 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 prospectus for its Initial Public Offering as filed with the SEC on May 1, 2025, as well as the Company’s Current Report on Form 8-K, as filed with the SEC on May 8, 2025. The interim results for the three months ended and for the period from January 23, 2025 (inception) through June 30, 2025, are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or for any future periods.
7
Liquidity, Capital Resources, and Going Concern
The Company’s liquidity needs up to June
30, 2025 had been satisfied through the loan under an unsecured promissory note from the Sponsor of up to $
During the period covered by this Quarterly Report
on Form 10-Q, on May 2, 2025, the Company consummated the Initial Public Offering of
In order to fund working capital deficiencies
or 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, provide the Company with working capital loans (the “Working
Capital Lons”). If the Company completes a Business Combination, the Company would repay such loaned amounts at that time. Up to
$
In connection with the Company’s assessment of going concern considerations in accordance with ASC Topic 205-40, “Presentation of Financial Statements - Going Concern” the Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the initial Business Combination. Management has determined that upon the receipt of the proceeds from the Initial Public Offering (see Note 3), the Company has sufficient funds to finance the working capital needs of the Company within one year from the date of issuance of the accompanying unaudited condensed financial statements.
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 of 2002, 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 statements 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.
8
Use of Estimates
The preparation of 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 accompanying financial statements.
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 accompanying 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 no cash or cash equivalents as of June 30, 2025.
Investments Held in Trust Account
At June 30, 2025, substantially
all of the assets held in the Trust Account were held in mutual funds which are invested in money market funds. All of the Company’s
investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair
value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in the Trust Account
are included in earning from investments held in Trust Account in the accompanying statements of operations. The estimated fair values
of investments held in Trust Account are determined using available market information. Fair values of these investments are determined
by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets. As of June 30, 2025, the Company reported
$
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 $
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 (the “Offering Costs”). 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 applied this guidance to allocate Initial Public Offering proceeds from the Units between Class A Ordinary Shares and Warrants, using the residual 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 Public Shares were charged to temporary equity and offering costs allocated to the Public and Private Placement Warrants were charged to shareholders’ deficit as the 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 Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying condensed balance sheet, primarily due to their short-term nature.
9
Income Taxes
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 June 30, 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.
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 period presented.
Warrant Instruments
The Company accounted for the Public and Private 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.
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 Topic 480-10-S99, the
Company classifies Public Shares subject to possible 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 accumulated deficit. Accordingly,
as of June 30, 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 balance sheet.
| Shares | Amount | |||||||
| Gross proceeds | $ |
|
||||||
| Less: | ||||||||
| Proceeds allocated to Public Warrants |
(
|
) | ||||||
| Class A Ordinary Shares issuance costs |
(
|
) | ||||||
| Plus: | ||||||||
| Remeasurement of carrying value to redemption value |
|
|||||||
| Class A Ordinary Shares subject to possible redemption, May 2, 2025 |
|
$ |
|
|||||
| Plus: | ||||||||
| Accretion of redeemable Class A Ordinary Shares to redemption amount |
|
|||||||
| Class A Ordinary Shares subject to possible redemption, June 30, 2025 |
|
$ |
|
|||||
10
Net Income Per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Income and losses are shared pro rata to the shares. Net income per Ordinary Share is computed by dividing net income by the weighted average number of Ordinary Shares outstanding for the period. Accretion associated with the redeemable Ordinary Shares is excluded from income per Ordinary Share as the redemption value approximates fair value.
The calculation of diluted income per Ordinary
Share does not consider the effect of the Warrants issued in connection with the (i) Initial Public Offering, (ii) the exercise of the
Over-Allotment Option and (iii) Private Placement, since the average price of the Ordinary Shares for the three months ended and for the
period from January 23, 2025 (inception) through June 30, 2025, was less than the exercise price and therefore, the inclusion of such
Warrants under the Treasury stock method would be anti-dilutive and the exercise is contingent upon the occurrence of future events. The
Warrants are exercisable to purchase
The following table reflects the calculation of basic and diluted net income per Ordinary Share:
|
For the
Three Months Ended |
For the Period from
January 23, 2025 (Inception) Through |
|||||||||||||||
| June 30, 2025 | June 30, 2025 | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
|
Ordinary
Shares |
Ordinary
Shares |
Ordinary
Shares |
Ordinary
Shares |
|||||||||||||
| Basic net income per Ordinary Share | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net income | $ |
|
$ |
|
$ |
|
$ |
|
||||||||
| Denominator: | ||||||||||||||||
| Basic weighted average Ordinary Shares outstanding |
|
|
|
|
||||||||||||
| Basic net income per Ordinary Share | $ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
For the
Three Months Ended |
For the Period from
January 23, 2025 (Inception) Through |
|||||||||||||||
| June 30, 2025 | June 30, 2025 | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
|
Ordinary
Shares |
Ordinary
Shares |
Ordinary
Shares |
Ordinary
Shares |
|||||||||||||
| Diluted net income per Ordinary Share | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net income | $ |
|
$ |
|
$ |
|
$ |
|
||||||||
| Denominator: | ||||||||||||||||
| Diluted weighted average Ordinary Shares outstanding |
|
|
|
|
||||||||||||
| Diluted net income per Ordinary Share | $ |
|
$ |
|
$ |
|
$ |
|
||||||||
11
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
Note 3 — Initial Public Offering
Pursuant to the Initial Public Offering on May
2, 2025, the Company sold
Warrants —
As of June 30,
2025, there were
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. 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 warrants 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, dated April 30, 2025, by and between the Company and Continental (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 Business Combination, it will use commercially reasonable efforts to file with the SEC a post-effective amendment to the IPO Registration Statement 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 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.
12
If the Public Warrant 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 reported 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 Continental 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 $
| ● | in whole and not in part; |
| ● |
at
a price of $
|
| ● | upon a minimum of 30 days’ prior written notice of redemption (the “30-day redemption period”); and |
| ● |
if,
and only if, the closing price of the Class A Ordinary Shares equals or exceeds $
|
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
(as defined in Note 5). 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 (
Note 4 — Private Placement
Simultaneously with the closing of the Initial
Public Offering, the Sponsor and Cantor purchased an aggregate of
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) are entitled to registration rights and (iii) with respect to Private Placement Warrants held by Cantor, are 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).
13
The Sponsor, officers and directors have entered
into a Letter Agreement 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 Company’s
Amended and Restated 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
Note 5 — Related Party Transactions
Founder Shares
On February 14, 2025, the Sponsor made a
capital contribution of $
On March 6, 2025, the Sponsor granted membership
interests equivalent to an aggregate of
The Company’s holders of Founder shares prior
to the Initial Public Offering (the “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 (1) the closing price of the Class A Ordinary Shares equals or exceeds $
14
Due from Sponsor
As of May 2, 2025, the date of the Initial Public
Offering, the Sponsor owed the Company an aggregate amount of $
Promissory Note — Related Party
The Sponsor has agreed to loan the Company an
aggregate of up to $
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 (the “Working Capital Loans”). 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 $
Note 6 — Commitments and Contingencies
Risks and Uncertainties
The Company’s ability to complete an initial Business Combination may be adversely affected by various factors, many of which are beyond the Company’s control. The Company’s ability to consummate an initial Business Combination could be impacted by, among other things, changes in laws or regulations, downturns in the financial markets or in economic conditions, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. The Company cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact the Company’s ability to complete an initial Business Combination.
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and the Class A Ordinary Shares underlying such Private Placement Warrants and Private Placement Warrants and Warrants that may be issued upon conversion of the Working Capital Loans are entitled to 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 the effective date of 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 piggyback registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. In addition, Cantor may participate in a piggyback registration only during the seven-year period beginning on the effective date of the Initial Public Offering. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
15
Underwriting Agreement
The underwriters had a
The underwriters received a cash underwriting
discount of $
Note 7 — Shareholders’ Deficit
Preference Shares
— The
Company is authorized to issue a total of
Class A Ordinary Shares
— The
Company is authorized to issue a total of
Class B Ordinary Shares
— The
Company is authorized to issue a total of
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,
16
Holders of record of the Company’s Class A
Ordinary Shares and Class B Ordinary Shares are entitled to
Note 8 — 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:
| Level 1: | 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. |
| Level 2: | 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. |
| Level 3: | Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability. |
At May 2, 2025, the fair value of the Public Warrants
was $
|
May 2,
2025 |
||||
| Implied Class A Ordinary Share price | $ |
|
||
| Exercise price | $ |
|
||
| Simulation term (years) |
|
|||
| Risk-free rate (continuous) |
|
% | ||
| Selected volatility |
|
% | ||
| Probability of De-SPAC and Market Adjustment |
|
% | ||
17
Note 9 — 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 chief operating decision maker (the “CODM”), or group, in deciding how to allocate resources and assess performance.
The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the condensed statements of operations as net income or loss. When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics, which include the following:
| June 30, | ||||
| 2025 | ||||
| Trust Account | $ |
|
||
| Cash | $ |
|
||
|
For the
Three Months Ended June 30, 2025 |
For the
Period from January 23, 2025 (Inception) Through June 30, 2025 |
|||||||
| General and administrative costs | $ |
|
$ |
|
||||
| Earnings from investments held in Trust Account | $ |
|
$ |
|
||||
The key metrics included in segment profit or loss reviewed by the CODM are earnings from investments held in Trust Account and general and administrative costs. The CODM reviews earnings from investments held in Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the trust agreement. 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 within the Combination Period. 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.
The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies.
Note 10 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheets date up to 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.
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Report including, without limitation, statements under this Item regarding our financial position, business strategy and the plans and objectives of Management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our Management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of our Management, as well as assumptions made by, and information currently available to, our Management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto included in this Report under Item 1. “Financial Statements”.
Overview
We are a blank check company incorporated in the Cayman Islands on January 23, 2025, formed for the purpose of effecting a Business Combination. We intend to effectuate our Business Combination using cash derived from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our shares, debt or a combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
We may seek to extend the Combination Period consistent with applicable laws, regulations and stock exchange rules by amending our Amended and Restated Articles. Any such amendment would require the approval of our Public Shareholders, who will be provided the opportunity to redeem all or a portion of their Public Shares in connection with the vote on such approval. Such redemptions will decrease the amount held in our Trust Account and our capitalization, and may affect their ability to maintain our listing on Nasdaq. In addition, the Nasdaq Rules currently require SPACs (such as us) to complete our initial Business Combination in accordance with the Nasdaq 36-Month Requirement. If we do not meet the Nasdaq 36-Month Requirement, our securities will likely be subject to a suspension of trading and delisting from Nasdaq.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities since January 23, 2025 (inception) through June 30, 2025 have been (i) organizational activities and (ii) activities relating to (y) the Initial Public Offering and (z) identifying and evaluating prospective acquisition candidates and activities in connection with the initial Business Combination. We will not generate any operating revenues until after the completion of our initial Business Combination. We have generated non-operating income in the form of interest income on investments held in the Trust Account after the Initial Public Offering. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance, among other things), as well as for due diligence expenses.
For the three months ended June 30, 2025, we had a net income $1,833,653, which consisted of earnings from investments held in Trust Account of $1,955,805, interest income - operating account of $3,305, offset by general and administrative costs of $125,457.
For the period from January 23, 2025 (inception) through June 30, 2025, we had a net income $1,785,119, which consisted of earnings from investments held in Trust Account of $1,955,805, interest income - operating account of $3,305, offset by general and administrative costs of $173,991.
Liquidity, Capital Resources and Going Concern
On May 2, 2025, the Company consummated the Initial Public Offering of 30,000,000 Units, which includes the partial exercise by the underwriters of their over-allotment option in the amount of 3,600,000 Units, at $10.00 per Unit, generating gross proceeds of $300,000,000. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 7,280,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, in a private placement to the Sponsor and Cantor, generating gross proceeds of $7,280,000. Of those 7,280,000 Private Placement Warrants, the Sponsor purchased 4,640,000 Private Placement Warrants and Cantor purchased 2,640,000 Private Placement Warrants.
Following the closing of the Initial Public Offering and the Private Placement, a total of $300,000,000 was placed in the Trust Account. We incurred $18,629,500, consisting of $5,280,000 of cash underwriting fee, $12,720,000 of deferred underwriting fee, and $629,500 of other offering costs.
19
For the period from January 23, 2025 (inception) through June 30, 2025, cash used in operating activities was $311,216. Net income of $1,785,119 was affected by payment of general and administrative costs through promissory note – related party of $65,934 and earnings from investments held in Trust Account of $1,955,805. Changes in operating assets and liabilities used $206,464 of cash.
As of June 30, 2025, we had investment held in the Trust Account consisting of marketable securities of $301,955,805. We may withdraw earnings in the Trust Account to pay taxes, if any. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (which interest shall be net of any taxes payable and excluding deferred underwriting commissions), to complete our Business Combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of June 30, 2025, we had cash of $1,093,350. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of our officers and directors may, but are not obligated to, provide us with the Working Capital Loans. If we complete a Business Combination, we would repay the Working Capital Loans. In the event that a Business Combination does not close, we 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 units of the post-Business Combination entity at a price of $10.00 per unit at the option of the lender. The units would be identical to the Private Placement Units.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares upon completion of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.
To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that we hold investments in the Trust Account, we may, at any time, based on our Management Team’s ongoing assessment of all factors related to our potential status under the Investment Company Act, instruct the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest-bearing demand deposit account at a bank.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.
The underwriters are entitled to a deferred underwriting discount of 4.0% of the gross proceeds of the Initial Public Offering held in the Trust Account other than those sold pursuant to the underwriters’ over-allotment option and 6.0% of the gross proceeds sold pursuant to the underwriters’ over-allotment option, $12,720,000 in the aggregate, payable upon the completion of the Company’s initial Business Combination subject to the terms of the underwriting agreement.
20
Critical Accounting Estimates
The preparation of the unaudited condensed financial statements and related disclosures in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements, and income and expenses during the periods reported. Making estimates requires Management to exercise significant judgement. 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 materially differ from those estimates. As of June 30, 2025, we did not have any critical accounting estimates to be disclosed.
Recent Accounting Standards
In November 2024, the FASB issued ASU Topic 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our Management, including our Certifying Officers, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our Management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were effective as of June 30, 2025.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There have been no changes to our internal control over financial reporting during the quarterly period ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
To the knowledge of our Management Team, there is no material litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.
Item 1A. Risk Factors.
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. For additional risks relating to our operations, other than as set forth below, see the section titled “Risk Factors” contained in our IPO Registration Statement. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our ability to consummate an initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Changes in international trade policies, tariffs and treaties affecting imports and exports may have a material adverse effect on our search for an initial Business Combination target or the performance or business prospects of a post-Business Combination company.
There have recently been significant changes to international trade policies and tariffs affecting imports and exports. Any significant increases in tariffs on goods or materials or other changes in trade policy could negatively affect our search for a target and/or our ability to complete our initial Business Combination.
Recently, the U.S. has implemented a range of new tariffs and increases to existing tariffs. In response to the “tariffs announced by the U.S., other countries have imposed, are considering imposing, and may in the future impose new or increased tariffs on certain exports from the United States. There is currently significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations and tariffs. and we cannot predict whether, and to what extent, current tariffs will continue or trade policies will change in the future.
Tariffs, or the threat of tariffs or increased tariffs, could have a significant negative impact on certain businesses (either due to domestic businesses’ reliance on imported goods or dependence on access to foreign markets, or foreign businesses’ reliance on sales into the United States). In addition, retaliatory tariffs could have a significant negative impact on foreign businesses that rely on imports from the United States, and domestic businesses that rely on exporting goods internationally. These tariffs and threats of tariffs and other potential trade policy changes could negatively affect the attractiveness of certain initial Business Combination targets, or lead to material adverse effects on a post-Business Combination company. Among other things, historical financial performance of companies affected by trade policies and/or tariffs may not provide useful guidance as to the future performance of such companies, because future financial performance of those companies may be materially affected by new U.S. tariffs or foreign retaliatory tariffs, or other changes to trade policies. The business prospects of a particular target for a Business Combination could change even after we enter into a Business Combination agreement, as a result of tariffs or the threat of tariffs that may have a material impact on that target's business, and it may be costly or impractical for us to terminate that Business Combination agreement. These factors could affect our selection of a Business Combination target.
We may not be able to adequately address the risks presented by these tariffs or other potential trade policy changes. As a result, we may deem it costly, impractical or risky to complete an initial Business Combination with a particular target or with a target in a particular industry or from a particular country. Consequently, the pool of potential target companies may be reduced, which could impair our ability to identify a suitable target and to complete an initial Business Combination. If we complete an initial Business Combination with such a target, the post-Business Combination company’s operations and financial results could be adversely affected as a result of tariffs or changes to trade policies, which may cause the market value of the securities of the post-Business Combination company to decline.
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Market conditions, economic uncertainty or downturns could adversely affect our business, financial condition, operating results and our ability to consummate a Business Combination.
In recent years, the United States and other markets have experienced cyclical or episodic downturns, and worldwide economic conditions remain uncertain, including as a result of the COVID-19 pandemic, supply chain disruptions, the Ukraine-Russia conflict, conflict in the Middle East, instability in the U.S. and global banking systems, rising fuel prices, increasing interest rates or foreign exchange rates and high inflation and the possibility of a recession. A significant downturn in economic conditions may make it more difficult for us to consummate a Business Combination.
We cannot predict the timing, strength, or duration of any future economic slowdown or any subsequent recovery generally, or in any industry. If the conditions in the general economy and the markets in which we operate worsen from present levels, our business, financial condition, operating results and our ability to consummate a Business Combination could be adversely affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
Simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreement, the Company consummated the sale of 7,280,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, in a Private Placement to the Sponsor and Cantor, generating gross proceeds of $7,280,000. Of those 7,280,000 Private Placement Warrants, the Sponsor purchased 4,640,000 Private Placement Warrants and Cantor purchased 2,640,000 Private Placement Warrants. The Private Placement Warrants are identical to the Public Warrants, except as otherwise disclosed in the IPO Registration Statement. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Placement Warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act
Use of Proceeds
Following the closing of our Initial Public Offering on May 2, 2025, a total of $300,000,000 (which amount includes $12,720,000 of the Deferred Fee) was placed in a U.S.-based trust account maintained by Continental, acting as trustee. The proceeds held in the Trust Account may be invested by the trustee only in U.S. government securities with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that we hold investments in the Trust Account, we may, at any time (based on the Management Team’s ongoing assessment of all factors related to the potential status under the Investment Company Act), instruct the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest-bearing demand deposit account at a bank.
The remaining proceeds from the Initial Public Offering and the Private Placement are held outside the Trust Account. Such funds are being used primarily to enable us to identify a target and to negotiate and consummate our initial Business Combination.
There has been no material change in the planned use of proceeds from our Initial Public Offering and Private Placement as described in the IPO Registration Statement. The specific investments in our Trust Account may change from time to time.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
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Item 5. Other Information.
Trading Arrangements
During
the quarterly period ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange
Act)
Additional Information
None.
Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Report.
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| REPUBLIC DIGITAL ACQUISITION COMPANY | ||
| Date: August 14, 2025 | By: | /s/ Joseph Naggar |
| Name: | Joseph Naggar | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: August 14, 2025 | By: | /s/ Jon Knipper |
| Name: | Jon Knipper | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
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