Drugs Made In America Acquisition Corp(DMAA) - 2025 Q2 - Quarterly Report

FORM 10-Q Filing Information Registrant Information DRUGS MADE IN AMERICA ACQUISITION CORP. is a Cayman Islands-incorporated blank check company, identified as a non-accelerated filer, smaller reporting company, and emerging growth company. As of August 14, 2025, it had 33,517,143 ordinary shares outstanding - The registrant is DRUGS MADE IN AMERICA ACQUISITION CORP., incorporated in the Cayman Islands[1] - The company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company[2][4] - As of August 14, 2025, there were 33,517,143 ordinary shares outstanding[3] Securities Registered on Nasdaq | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Units | DMAAU | The Nasdaq Stock Market LLC | | Ordinary Shares | DMAA | The Nasdaq Stock Market LLC | | Rights | DMAAR | The Nasdaq Stock Market LLC | Part I – Financial Information Item 1. Financial Statements This section presents the unaudited interim financial statements for Drugs Made In America Acquisition Corp., including the Balance Sheets, Statements of Operations, Statements of Changes in Shareholders' Deficit, and Statements of Cash Flows, along with comprehensive notes explaining the company's organization, accounting policies, and specific financial activities Balance Sheets Balance Sheet Highlights (Unaudited) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------------------- | :------------ | :---------------- | | Cash | $822 | $1,351 | | Prepaid expenses and other current assets | $48,904 | $3,640 | | Cash and investments held in Trust Account | $235,155,966 | — | | Total Assets | $235,205,692 | $550,824 | | Accounts payable and accrued expenses | $147,453 | $77,280 | | Accrued offering costs | $153,988 | $56,065 | | Promissory note – related party | — | $662,324 | | Deferred underwriting fee payable | $6,900,000 | — | | Total Liabilities | $7,201,441 | $795,669 | | Ordinary shares subject to possible redemption| $235,155,966 | — | | Total Shareholders' Deficit | $(7,151,715) | $(244,845) | Statements of Operations Statements of Operations Highlights (Unaudited) | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Period from May 23, 2024 (inception) through June 30, 2024 | | :-------------------------------------------- | :------------------------------- | :----------------------------- | :--------------------------------------------------------- | | General and administrative costs | $131,919 | $462,844 | $54,931 | | Loss from operations | $(131,919) | $(462,844) | $(54,931) | | Interest earned on cash and investments held in Trust Account | $2,420,498 | $4,005,966 | — | | NET INCOME (LOSS) | $2,288,579 | $3,543,122 | $(54,931) | | Basic and diluted net income (loss) per redeemable ordinary share | $0.07 | $0.12 | — | | Basic net income (loss) per non-redeemable ordinary share | $0.07 | $0.12 | $(0.01) | Statements of Changes in Shareholders' Deficit Changes in Shareholders' Deficit (Unaudited) | Item | January 1, 2025 Balance | March 31, 2025 Balance | June 30, 2025 Balance | | :-------------------------------------------- | :---------------------- | :--------------------- | :-------------------- | | Ordinary Shares (Shares) | 9,857,143 | 10,517,143 | 10,517,143 | | Ordinary Shares (Amount) | $986 | $1,052 | $1,052 | | Share Subscription Receivable | — | $(852,379) | $(695,825) | | Additional Paid-in Capital | $34,014 | — | — | | Accumulated Deficit | $(279,845) | $(6,325,023) | $(6,456,942) | | Total Shareholders' Deficit | $(244,845) | $(7,176,350) | $(7,151,715) | Changes in Shareholders' Deficit (Inception to June 30, 2024) | Item | May 23, 2024 (Inception) Balance | June 30, 2024 Balance | | :-------------------------------------------- | :------------------------------- | :-------------------- | | Ordinary Shares (Shares) | — | 9,857,143 | | Ordinary Shares (Amount) | — | $986 | | Share Subscription Receivable | — | — | | Additional Paid-in Capital | — | $34,014 | | Accumulated Deficit | — | $(54,931) | | Total Shareholders' Deficit | — | $(19,931) | Statements of Cash Flows Statements of Cash Flows Highlights (Unaudited) | Item | Six Months Ended June 30, 2025 | Period from May 23, 2024 (inception) through June 30, 2024 | | :-------------------------------------------- | :----------------------------- | :--------------------------------------------------------- | | Net income (loss) | $3,543,122 | $(54,931) | | Net cash used in operating activities | $(357,899) | $(114,931) | | Net cash used in investing activities | $(231,150,000) | — | | Net cash provided by financing activities | $231,507,370 | $133,029 | | Net Change in Cash | $(529) | $18,098 | | Cash – End of period | $822 | $18,098 | Notes to Financial Statements NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Drugs Made In America Acquisition Corp. is a blank check company formed on May 23, 2024, to effect a business combination, primarily targeting the pharmaceutical industry. The company completed its Initial Public Offering (IPO) in January 2025, raising $200 million, with an additional $30 million from an over-allotment option exercise in February 2025. Proceeds are held in a Trust Account for a business combination, with a deadline of April 29, 2026 (extendable up to 21 months). The company faces a 'going concern' uncertainty due to its limited cash and working capital deficit, relying on a successful business combination to continue operations - The Company is a blank check company incorporated on May 23, 2024, for the purpose of effecting a business combination, with an intent to focus on the pharmaceutical industry[21][22] - The Initial Public Offering (IPO) was consummated on January 29, 2025, raising $200,000,000 from 20,000,000 Units at $10.00 per Unit. An additional 3,000,000 Units were sold on February 18, 2025, via over-allotment option, generating $30,000,000[24] - Simultaneously with the IPO, 400,000 Private Placement Units were sold to the Sponsor for $4,000,000, with an additional 30,000 Private Placement Units sold with the over-allotment option for $300,000[25] - A total of $231,150,000 from the IPO and private placement proceeds was placed in a Trust Account, to be invested in U.S. government treasury obligations or money market funds[29] - The Company has until April 29, 2026 (15 months from IPO closing, extendable up to 21 months) to complete a Business Combination, after which public shares will be redeemed if no combination occurs[35] - As of June 30, 2025, the Company had $822 in cash and a working capital deficit of $251,715, raising substantial doubt about its ability to continue as a going concern[37] NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines the significant accounting policies, including the basis of presentation in accordance with GAAP for interim financial information, the company's status as an emerging growth company, and its election to use the extended transition period for new accounting standards. It also details policies for cash, investments in the Trust Account, offering costs, income taxes, fair value measurements, redeemable share classification, derivative financial instruments, and net income (loss) per ordinary share - The unaudited financial statements are prepared in accordance with GAAP for interim financial information and SEC rules for interim reporting[39] - The Company is an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised financial accounting standards[41][42] - Cash and investments held in the Trust Account are classified as trading securities and measured at fair value using Level 1 inputs[47] - Public ordinary shares subject to redemption are classified outside of permanent equity at redemption value, with changes recognized immediately[55] Redeemable Ordinary Shares Reconciliation | Item | Shares | Amount | | :-------------------------------------------- | :----------- | :------------ | | Ordinary shares subject to possible redemption, January 29, 2025 | 20,000,000 | $201,000,000 | | Ordinary shares subject to possible redemption, March 31, 2025 | 23,000,000 | $232,735,468 | | Ordinary shares subject to possible redemption, June 30, 2025 | 23,000,000 | $235,155,966 | - The FASB issued ASU 2024-03, 'Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures,' effective for fiscal years beginning after December 15, 2026, which the Company is currently evaluating[64] NOTE 3 — INITIAL PUBLIC OFFERING The Company completed its Initial Public Offering on January 29, 2025, selling 20,000,000 units at $10.00 each. Each unit includes one ordinary share and one right to receive one-eighth of an ordinary share upon business combination. The underwriters fully exercised their over-allotment option on February 18, 2025, purchasing an additional 3,000,000 units for $30,000,000 - The Initial Public Offering (IPO) closed on January 29, 2025, with 20,000,000 Units sold at $10.00 per Unit, generating $200,000,000[67] - Each Unit consists of one ordinary share and one Public Right, entitling the holder to receive one-eighth (1/8) of one ordinary share upon consummation of an initial Business Combination[67] - On February 18, 2025, the underwriters exercised their over-allotment option in full, purchasing an additional 3,000,000 Units for $30,000,000[67] NOTE 4 — PRIVATE PLACEMENT Simultaneously with the IPO, the Sponsor purchased 400,000 Private Placement Units for $4,000,000, with $1,100,000 remaining as a share subscription receivable. An additional 30,000 Private Placement Units were purchased for $300,000 when the over-allotment option was exercised. These proceeds are held in the Trust Account and are subject to redemption terms if a business combination is not completed - 400,000 Private Placement Units were sold to the Sponsor for $4,000,000, with $1,100,000 recorded as share subscription receivable[68] - The Sponsor paid $404,175 in expenses on behalf of the Company, reducing the share subscription receivable to $695,825 as of June 30, 2025[68] - An additional 30,000 Private Placement Units were purchased by the Sponsor for $300,000 on February 18, 2025[68] NOTE 5 — RELATED PARTIES This note details transactions and agreements with related parties, including the issuance and forfeiture of Founder Shares to the Sponsor, an administrative support agreement for office space and services, and a promissory note from the Sponsor to cover company expenses. It also mentions advisory services from the CEO's husband and a consulting agreement with the CFO, along with potential future working capital loans from related parties - The Sponsor initially received 22,361,111 ordinary shares for $35,000, then surrendered 12,503,968 shares, holding 9,857,143 Founder Shares as of November 6, 2024[69] - The Company pays the Sponsor or an affiliate $10,000 per month for administrative support services, incurring $30,000 and $51,000 for the three and six months ended June 30, 2025, respectively[71][72] - A promissory note from the Sponsor allowed the Company to borrow up to $1,850,000, with a balance of $0 outstanding as of June 30, 2025, down from $662,324 at December 31, 2024[74] - The CFO has a consulting agreement, incurring $8,825 and $22,764 in expenses for the three and six months ended June 30, 2025, respectively[76] - The Sponsor entered into an amended and restated private units purchase agreement, agreeing to purchase 400,000 Private Placement Units and provide up to $1,100,000 in working capital loans convertible into Private Placement Units[79] NOTE 6 — COMMITMENTS AND CONTINGENCIES This note addresses potential risks and uncertainties, including geopolitical instability from global conflicts (Russia-Ukraine, Israel-Hamas) and their potential impact on market conditions and the Company's ability to complete a business combination. It also outlines registration rights for certain security holders and details the underwriting agreement, including cash and deferred underwriting fees - Geopolitical instability from the Russia-Ukraine and Israel-Hamas conflicts could adversely affect the Company's search for a business combination[80][81] - Holders of Founder Shares, Private Placement Units, and converted working capital loans are entitled to registration rights[82] - Underwriters received a cash underwriting discount of $1,150,000 and are entitled to a deferred fee of $6,900,000, payable upon completion of a business combination[85] - The Company agreed to issue 230,000 ordinary shares to the underwriters as representative shares[85] NOTE 7 — SHAREHOLDERS' DEFICIT This note details the components of shareholders' deficit, including authorized and outstanding preference and ordinary shares. It clarifies the nature of rights issued with units, which convert to ordinary shares upon business combination, and describes the representative shares issued to underwriters, subject to lock-up periods and waiver of redemption rights. It also addresses the share subscription receivable from the Sponsor - The Company is authorized to issue 1,000,000 preference shares and 220,000,000 ordinary shares; no preference shares were issued or outstanding[86][87] - As of June 30, 2025, there were 10,517,143 ordinary shares issued and outstanding, excluding 23,000,000 shares subject to redemption[87] - Each right entitles the holder to receive one-eighth (1/8) of one ordinary share upon consummation of the initial Business Combination[88] - The Company issued 230,000 representative shares to the underwriters, which are subject to transfer restrictions and waiver of redemption rights[90][91] - As of June 30, 2025, there was $695,825 outstanding as share subscription receivable from the Sponsor[92] NOTE 8 — FAIR VALUE MEASUREMENTS This note describes the Company's fair value measurements, classifying financial instruments into a three-level hierarchy based on observability of inputs. Investments held in the Trust Account are valued using Level 1 inputs. The over-allotment option, which was exercised in February 2025, was previously classified as a Level 3 liability and valued using a Black-Scholes model - The Company uses a fair value hierarchy (Level 1, 2, 3) to classify assets and liabilities based on input observability[93] - Investments held in the Trust Account are measured at fair value using Level 1 inputs (quoted prices in active markets)[96] - The over-allotment option was classified as a Level 3 liability and valued using a Black-Scholes model until its exercise in February 2025[96][97] NOTE 9 — SEGMENT INFORMATION The Company operates as a single operating segment, with the Chief Executive Officer serving as the chief operating decision maker (CODM). The CODM reviews overall operating results, including net income/loss, general and administrative expenses, and interest earned on Trust Account investments, to allocate resources and assess financial performance - The Company has determined it has only one operating segment, with the CEO as the CODM[101] - The CODM reviews net income or loss, general and administrative costs, and interest earned on Trust Account investments to make resource allocation and performance assessment decisions[102][103] NOTE 10 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions through the financial statement issuance date and identified no events requiring adjustment or disclosure - No subsequent events requiring adjustment or disclosure were identified through the date the financial statements were issued[104] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and operational results. It reiterates the Company's status as a blank check company focused on a business combination in the pharmaceutical industry, details the IPO and private placement proceeds, and discusses the use of funds in the Trust Account. It also highlights the 'going concern' uncertainty and outlines contractual obligations Special Note Regarding Forward-Looking Statements - The report contains forward-looking statements reflecting management's current beliefs about future events and performance[106] - Actual results may differ materially due to various factors, as detailed in the 'Risk Factors' section of the Company's prospectus[106] Overview - The Company is a blank check company incorporated on May 23, 2024, aiming to complete a business combination, primarily in the pharmaceutical industry[107][109] - The IPO on January 29, 2025, raised $200,000,000 from 20,000,000 Units, and an additional $30,000,000 was raised from the over-allotment option exercise on February 18, 2025[110][112] - A total of $231,150,000 from the IPO and private placement was placed in a trust account for the benefit of public shareholders[113] - The Company has 15 months from the IPO closing (extendable up to 21 months) to consummate an initial business combination, or it will redeem public shares[114] Results of Operations - The Company has not generated operating revenues to date, with activities focused on formation, IPO preparation, and identifying a target company[118] Net Income (Loss) Summary | Period | Net Income (Loss) | | :---------------------------------------------- | :---------------- | | Three months ended June 30, 2025 | $2,288,579 |\n| Six months ended June 30, 2025 | $3,543,122 |\n| Period from May 23, 2024 (inception) through June 30, 2024 | $(54,931) | - Net income for the three and six months ended June 30, 2025, was primarily driven by interest earned on cash and investments held in the trust account, offset by general and administrative costs[119] Liquidity and Capital Resources - As of June 30, 2025, the Company had cash of $822[121] - Following the IPO and private placements, $231,150,000 was placed in the trust account[123] - The Company incurred $8,898,201 in transaction costs, including $1,150,000 in cash underwriting fees, $6,900,000 in deferred underwriting fees, and $848,201 in other offering costs[125] - Funds in the trust account are primarily intended for the initial business combination, with interest (net of taxes) available for company use[126] - The Sponsor's Subscription Promissory Note provides up to $1,100,000 in working capital loans, convertible into Private Placement Units[124] Going Concern - Management has determined that the mandatory liquidation and subsequent dissolution raise substantial doubt about the Company's ability to continue as a going concern within one year[130] Off-Balance Sheet Financing Arrangements - As of June 30, 2025, the Company has no off-balance sheet obligations, assets, or liabilities[131] Contractual Obligations - The Company has no long-term debt, capital lease, operating lease, or long-term liabilities, other than a $10,000 monthly payment to the Sponsor for administrative services[132] - Underwriters are entitled to a deferred fee of $6,900,000, payable upon completion of a business combination[133] Critical Accounting Estimates - Management has not identified any critical accounting estimates[134] Recent Accounting Standards - The Company is evaluating ASU 2024-03, 'Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures,' effective for fiscal years beginning after December 15, 2026[135] - Management does not believe other recently issued, but not yet effective, accounting standards would materially affect the financial statements[136] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Drugs Made In America Acquisition Corp. is not required to provide extensive market risk disclosures. The Company's investments in the trust account are primarily in short-term U.S. government treasury obligations or money market funds, resulting in no material exposure to interest rate risk - As a smaller reporting company, the Company is exempt from certain market risk disclosure requirements[137] - Investments in the trust account are in short-term U.S. government treasury obligations or money market funds, leading to no material exposure to interest rate risk[137] Item 4. Controls and Procedures The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2025, primarily due to inadequate segregation of duties and insufficient written policies. No material changes in internal control over financial reporting occurred during the quarter - As of June 30, 2025, the CEO and CFO concluded that disclosure controls and procedures were not effective[139] - The ineffectiveness is attributed to a material weakness in inadequate segregation of duties due to limited personnel and insufficient written policies for accounting, IT, and financial reporting[139] - No material changes in internal control over financial reporting occurred during the fiscal quarter of 2025[141] Part II – Other Information Item 1. Legal Proceedings The Company reported no legal proceedings - There are no legal proceedings[142] Item 1A. Risk Factors As a smaller reporting company, Drugs Made In America Acquisition Corp. is not required to provide specific risk factor disclosures under this item - As a smaller reporting company, the Company is not required to provide risk factor information under this item[143] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the proceeds from the Initial Public Offering and private placements, totaling $231,150,000 deposited into the trust account. It also outlines the transaction costs, including underwriting fees and other offering expenses - The IPO on January 29, 2025, generated $200,000,000 from 20,000,000 Units[144] - A private placement with the sponsor generated $4,000,000 from 400,000 Private Placement Units[145] - The exercise of the over-allotment option generated an additional $30,000,000 from 3,000,000 Units and $300,000 from 30,000 Private Placement Units[146] - A total of $231,150,000 was deposited into the trust account[146] - Total transaction costs were $8,898,201, including $1,150,000 in cash underwriting fees, $6,900,000 in deferred underwriting fees, and $848,201 in other offering costs[147] Item 3. Defaults Upon Senior Securities The Company reported no defaults upon senior securities - There are no defaults upon senior securities[149] Item 4. Mine Safety Disclosures This item is not applicable to the Company - This item is not applicable[150] Item 5. Other Information The Company reported no other information - No other information is reported[151] Item 6. Exhibits This section lists the exhibits filed as part of, or incorporated by reference into, the report, including certifications from the Principal Executive Officer and Principal Financial Officer, and XBRL Taxonomy Extension Documents - Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1*, 32.2*)[152] - XBRL Taxonomy Extension Documents (Calculation, Schema, Definition, Labels, Presentation Linkbase) and Cover Page Interactive Data File are also filed[152] SIGNATURES Signatures The report was duly signed on August 14, 2025, by Lynn Stockwell, Chief Executive Officer, and Glenn Worman, Chief Financial Officer, on behalf of Drugs Made In America Acquisition Corp - The report was duly signed on August 14, 2025[155] - Signatories include Lynn Stockwell, Chief Executive Officer, and Glenn Worman, Chief Financial Officer[155]