Republic Digital Acquisition Co-A(RDAG) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section covers the company's financial statements, management's discussion, market risk, and controls Item 1. Financial Statements. This section presents the unaudited condensed financial statements for Republic Digital Acquisition Company as of and for the period ended June 30, 2025, including the balance sheet, statements of operations, changes in shareholders' deficit, and cash flows, along with detailed notes explaining the company's organization, significant accounting policies, and specific financial transactions - The company is a blank check company formed on January 23, 2025, with no operations to date, focused on identifying a Business Combination target[19][20] - The Initial Public Offering (IPO) was consummated on May 2, 2025, raising $300,000,000 from 30,000,000 units[21] Unaudited Condensed Balance Sheet as of June 30, 2025 This section presents the company's financial position, including assets, liabilities, and shareholders' deficit, as of June 30, 2025 Unaudited Condensed Balance Sheet (June 30, 2025) | Assets | Amount | | :--- | :--- | | Cash | $1,093,350 | | Prepaid expenses | $142,054 | | Long-term prepaid insurance | $64,595 | | Investments held in Trust Account | $301,955,805 | | Total Assets | $303,255,804 | | Liabilities: | | | Accrued offering costs | $75,000 | | Accounts payable and accrued expenses | $185 | | Deferred underwriting fee | $12,720,000 | | Total Liabilities | $12,795,185 | | Class A ordinary shares subject to possible redemption | $301,955,805 | | Shareholders' Deficit: | | | Class B ordinary shares | $750 | | Accumulated deficit | $(11,495,936) | | Total Shareholders' Deficit | $(11,495,186) | | Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders' Deficit | $303,255,804 | 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 This section details the company's financial performance, including net income and expenses, for the three months and period ended June 30, 2025 Unaudited Condensed Statements of Operations | Metric | Three Months Ended June 30, 2025 | Inception Through June 30, 2025 | | :--- | :--- | :--- | | General and administrative costs | $(125,457) | $(173,991) | | Earnings from investments held in Trust Account | $1,955,805 | $1,955,805 | | Interest income - operating account | $3,305 | $3,305 | | Net income | $1,833,653 | $1,785,119 | | Basic net income per Class A Ordinary Share | $0.07 | $0.10 | | Diluted net income per Class A Ordinary Share | $0.07 | $0.09 | 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 (Unaudited) This section outlines the changes in the company's shareholders' deficit, including net income, share issuances, and redemptions, for the specified periods - The company's accumulated deficit increased from $(48,534) at March 31, 2025, to $(11,495,936) at June 30, 2025, primarily due to accretion for Class A Ordinary Shares to redemption amount[14] Key Changes in Shareholders' Deficit (Inception through June 30, 2025) | Item | Amount | | :--- | :--- | | Balance — January 23, 2025 | $0 | | Class B Ordinary Shares issued to Sponsor | $25,000 | | Net loss (Jan 23 - Mar 31, 2025) | $(48,534) | | Accretion for Class A Ordinary Shares to redemption amount | $(23,102,860) | | Sale of Private Placement Warrants | $7,280,000 | | Fair Value of Public Warrants at issuance | $2,700,000 | | Allocated value of transaction costs to Class A Ordinary Shares | $(182,445) | | Forfeiture of Founder Shares | $0 (net effect) | | Net income (Apr 1 - Jun 30, 2025) | $1,833,653 | | Balance – June 30, 2025 | $(11,495,186) | Unaudited Condensed Statement of Cash Flows for the Period from January 23, 2025 (Inception) Through June 30, 2025 This section details the company's cash inflows and outflows from operating, investing, and financing activities from inception through June 30, 2025 Unaudited Condensed Statement of Cash Flows (Inception through June 30, 2025) | Activity | Amount | | :--- | :--- | | Net cash used in operating activities | $(311,216) | | Net cash used in investing activities | $(300,000,000) | | Net cash provided by financing activities | $301,404,566 | | Net Change in Cash | $1,093,350 | | Cash – End of period | $1,093,350 | - Non-cash investing and financing activities included $23,102,860 for accretion for Class A ordinary shares to redemption amount and $12,720,000 for deferred underwriting fee payable[16] Notes to Condensed Financial Statements (Unaudited) This section provides detailed explanations of the company's accounting policies, organization, and specific financial transactions supporting the condensed financial statements - The company is a blank check company incorporated on January 23, 2025, with the sole purpose of effecting a Business Combination[19] - The company is an "emerging growth company" and has elected not to opt out of the extended transition period for new or revised financial accounting standards[39][40] - The company has one operating segment, with the Chief Financial Officer acting as the chief operating decision maker, reviewing Trust Account earnings and general and administrative costs[86][87] Note 1 — Organization and Business Operations This note describes the company's incorporation, purpose as a blank check company, and the initial public offering and private placement details - Republic Digital Acquisition Company was incorporated on January 23, 2025, as a Cayman Islands exempted corporation, aiming for a Business Combination[19] - The IPO on May 2, 2025, raised $300,000,000 from 30,000,000 units, each consisting of one Class A Ordinary Share and one-half of one redeemable warrant[21] - A simultaneous private placement generated $7,280,000 from the sale of 7,280,000 Private Placement Warrants to the Sponsor and Cantor[22] - $300,000,000 from the IPO and Private Placement proceeds were placed in a Trust Account, to be invested in U.S. government treasury obligations or money market funds[26] Note 2 — Summary of Significant Accounting Policies This note outlines the key accounting principles applied in preparing the financial statements, including GAAP compliance, going concern, and fair value measurements - Financial statements are prepared in accordance with GAAP for interim financial information, with certain disclosures condensed or omitted per SEC rules[33] - The company has sufficient funds to finance working capital needs for one year, primarily from IPO proceeds, addressing going concern considerations[38] - Investments in the Trust Account, totaling $301,955,805 as of June 30, 2025, are classified as trading securities and measured at fair value using Level 1 inputs[44] - Class A Ordinary Shares subject to possible redemption are classified as temporary equity and adjusted to redemption value at each reporting period end[52] Note 3 — Initial Public Offering This note details the terms and proceeds of the company's initial public offering, including the number of units, warrants, and redemption conditions - The IPO involved 30,000,000 units at $10.00 each, including a partial exercise of the over-allotment option[58] - As of June 30, 2025, there were 22,280,000 Warrants outstanding (15,000,000 Public Warrants and 7,280,000 Private Placement Warrants), exercisable at $11.50 per share[59] - The company may redeem outstanding warrants if the Class A Ordinary Share price equals or exceeds $18.00 for 20 trading days within a 30-trading day period[63][66] Note 4 — Private Placement This note describes the private placement of warrants, including the number sold, proceeds generated, and key differences from public warrants - 7,280,000 Private Placement Warrants were sold at $1.00 each, generating $7,280,000, with the Sponsor purchasing 4,640,000 and Cantor 2,640,000[64] - Private Placement Warrants are identical to Public Warrants except for transfer restrictions and registration rights, and Cantor's warrants are not exercisable more than five years from IPO commencement[65] Note 5 — Related Party Transactions This note details transactions with related parties, including the issuance of Founder Shares, compensation to directors, and repayment of loans by the Sponsor - The Sponsor initially received 7,590,000 Class B Ordinary Shares (Founder Shares) for a $25,000 capital contribution, with 90,000 shares later forfeited, resulting in 7,500,000 Founder Shares outstanding[68] - The Sponsor granted membership interests equivalent to 125,000 Founder Shares to directors, valued at $1.29 per share, with compensation expense recognized upon Business Combination probability[69] - The Sponsor repaid a $2,000,000 amount owed for Private Placement Warrants and a $294,256 IPO Promissory Note[71][72] - The Sponsor or affiliates may provide Working Capital Loans up to $1,500,000, convertible into units of the post-Business Combination entity[73] Note 6 — Commitments and Contingencies This note outlines the company's commitments and potential liabilities, including factors affecting Business Combination completion, registration rights, and deferred underwriting fees - The company's ability to complete a Business Combination is subject to various factors, including changes in laws, economic conditions, and geopolitical instability[74] - Holders of Founder Shares, Private Placement Warrants, and underlying Class A Ordinary Shares have registration rights[75] - Underwriters received a $5,280,000 cash underwriting discount and are entitled to a deferred underwriting fee of $12,720,000 payable upon Business Combination completion[77] Note 7 — Shareholders' Deficit This note details the composition of the company's shareholders' deficit, including outstanding Class B Ordinary Shares and their conversion terms - As of June 30, 2025, there were 7,500,000 Class B Ordinary Shares issued and outstanding, and no Class A Ordinary Shares outstanding (excluding those subject to redemption)[79] - Founder Shares (Class B Ordinary Shares) automatically convert to Class A Ordinary Shares on a one-for-one basis upon Business Combination, subject to adjustments[80] - Prior to Business Combination, only Class B Ordinary Share holders vote on director appointments/removals and continuation in other jurisdictions[81] Note 8 — Fair Value Measurements This note explains the methodology and assumptions used to determine the fair value of financial instruments, specifically Public Warrants - The fair value of Public Warrants was $2,700,000 ($0.18 per warrant) at May 2, 2025, determined using a Monte Carlo Simulation Model[83] Public Warrants Valuation Assumptions (May 2, 2025) | Assumption | Value | | :--- | :--- | | Implied Class A Ordinary Share price | $9.91 | | Exercise price | $11.50 | | Simulation term (years) | 7.0 | | Risk-free rate (continuous) | 4.07% | | Selected volatility | 3.0% | | Probability of De-SPAC and Market Adjustment | 14.0% | Note 9 — Segment Information This note clarifies that the company operates as a single segment, with the Chief Financial Officer reviewing key financial metrics - The company has only one operating segment, as determined by the Chief Financial Officer (CODM) who reviews overall operating results[86] - Key metrics reviewed by the CODM include Trust Account balance ($301,955,805), cash ($1,093,350), general and administrative costs ($173,991 inception-to-date), and earnings from Trust Account investments ($1,955,805 inception-to-date)[87] Note 10 — Subsequent Events This note confirms that no significant events occurred after the balance sheet date that would require financial statement adjustment or disclosure - No subsequent events requiring adjustment or disclosure were identified after the balance sheet date up to the issuance of the financial statements[89] 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 results of operations, emphasizing its status as a blank check company, its IPO, and its focus on a Business Combination. It also discusses liquidity, capital resources, and accounting policies - The company is a blank check company formed on January 23, 2025, with the purpose of effecting a Business Combination[92] - The company has not generated operating revenues to date, with activities focused on organizational tasks, the IPO, and identifying acquisition candidates[95] - Net income for the three months ended June 30, 2025, was $1,833,653, and for the period from inception through June 30, 2025, was $1,785,119, primarily from Trust Account earnings[96][97] Overview This section provides a general description of the company's nature as a blank check company and its primary objective of completing a Business Combination - The company is a blank check company incorporated on January 23, 2025, aiming to complete a Business Combination using cash, shares, debt, or a combination[92] - The company may seek to extend the 24-month Combination Period, which requires shareholder approval and could impact the Trust Account and Nasdaq listing[94] - Failure to meet the Nasdaq 36-Month Requirement for completing a Business Combination could lead to trading suspension and delisting[94] Results of Operations This section analyzes the company's financial performance, highlighting the absence of operating revenues and the primary sources of income and expenses - The company has not engaged in operations or generated revenues since inception, with activities focused on IPO and Business Combination identification[95] Net Income Breakdown | Item | Three Months Ended June 30, 2025 | Inception Through June 30, 2025 | | :--- | :--- | :--- | | Earnings from investments held in Trust Account | $1,955,805 | $1,955,805 | | Interest income - operating account | $3,305 | $3,305 | | General and administrative costs | $(125,457) | $(173,991) | | Net income | $1,833,653 | $1,785,119 | Liquidity, Capital Resources and Going Concern This section discusses the company's cash position, funding sources from the IPO and private placement, transaction costs, and its ability to meet future financial obligations - The IPO and Private Placement generated gross proceeds of $300,000,000 and $7,280,000 respectively, with $300,000,000 placed in the Trust Account[98][99] - Transaction costs amounted to $18,629,500, including cash underwriting fees, deferred underwriting fees, and other offering costs[99] - As of June 30, 2025, the company had $1,093,350 in cash and $301,955,805 in investments held in the Trust Account[101][102] - Management believes current funds are sufficient for operating business needs for one year, but additional financing may be required for the Business Combination or significant redemptions[104] Off-Balance Sheet Arrangements This section confirms that the company has no off-balance sheet arrangements as of the reporting date - The company has no obligations, assets, or liabilities considered off-balance sheet arrangements as of June 30, 2025[106] Contractual obligations This section outlines the company's contractual obligations, specifically the deferred underwriting discount payable upon Business Combination completion - The company has no long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities[107] Contractual Obligations | Obligation | Amount | Payment Trigger | | :--- | :--- | :--- | | Deferred underwriting discount | $12,720,000 | Completion of initial Business Combination | Critical Accounting Estimates This section states that the company did not have any critical accounting estimates requiring disclosure as of the reporting date - As of June 30, 2025, the company did not have any critical accounting estimates to be disclosed[109] Recent Accounting Standards This section discusses the evaluation of recently issued accounting standards and their potential impact on the company's financial statements - 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[110] - Management does not believe other recently issued, but not yet effective, accounting standards would materially affect the condensed financial statements[111] Item 3. Quantitative and Qualitative Disclosures About Market Risk. As a smaller reporting company, Republic Digital Acquisition Company is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[112] Item 4. Controls and Procedures. This section details the evaluation of the company's disclosure controls and procedures, concluding their effectiveness as of June 30, 2025, and noting no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025, by the Certifying Officers[114] - No changes to internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected or are reasonably likely to materially affect it[116] Evaluation of Disclosure Controls and Procedures This section presents the Certifying Officers' conclusion on the effectiveness of the company's disclosure controls and procedures as of June 30, 2025 - Certifying Officers concluded that disclosure controls and procedures were effective as of June 30, 2025[114] - Disclosure controls and procedures provide reasonable, not absolute, assurance due to inherent limitations and resource constraints[115] Changes in Internal Control over Financial Reporting This section confirms that no material changes occurred in the company's internal control over financial reporting during the quarter ended June 30, 2025 - There have been no changes to internal control over financial reporting during the quarter ended June 30, 2025, that materially affected or are reasonably likely to materially affect it[116] PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, use of proceeds, and other miscellaneous information relevant to the company Item 1. Legal Proceedings. To management's knowledge, there is no material litigation pending or contemplated against the company or its officers/directors - No material litigation is currently pending or contemplated against the company, its officers, or directors[118] Item 1A. Risk Factors. As a smaller reporting company, the company is not required to include risk factors in this report but refers to its IPO Registration Statement for additional risks. It highlights potential adverse effects from changes in international trade policies and economic downturns on its ability to complete a Business Combination - The company is a smaller reporting company and is not required to include risk factors in this report, referring to its IPO Registration Statement for additional risks[119] - Changes in international trade policies, tariffs, and treaties could adversely affect the search for a Business Combination target or the performance of a post-Business Combination company[120][122] - Market conditions, economic uncertainty, or downturns (e.g., COVID-19, supply chain disruptions, geopolitical conflicts, inflation, rising interest rates) could adversely affect the company's ability to consummate a Business Combination[124][125] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. This section details the unregistered sale of Private Placement Warrants and the planned use of proceeds from both the IPO and private placement, primarily for the Business Combination and related expenses - 7,280,000 Private Placement Warrants were sold in an unregistered sale to the Sponsor and Cantor for $7,280,000, under Section 4(a)(2) of the Securities Act[126] - $300,000,000 from the IPO and Private Placement was placed in a Trust Account, to be invested in U.S. government securities or money market funds[127] - Remaining proceeds outside the Trust Account are used to identify, negotiate, and consummate the initial Business Combination[128] Unregistered Sales of Equity Securities This section describes the sale of Private Placement Warrants to the Sponsor and Cantor, which were exempt from SEC registration - 7,280,000 Private Placement Warrants were sold to the Sponsor and Cantor for $1.00 each, totaling $7,280,000, exempt from registration under Section 4(a)(2) of the Securities Act[126] Use of Proceeds This section outlines how the proceeds from the IPO and private placement are allocated, primarily for the Trust Account and Business Combination expenses - $300,000,000 from the IPO and Private Placement is held in a Trust Account, invested in U.S. government securities or money market funds[127] - Funds outside the Trust Account are used to identify a target and negotiate/consummate the initial Business Combination[128] - There has been no material change in the planned use of proceeds from the IPO and Private Placement[128] Purchases of Equity Securities by the Issuer and Affiliated Purchasers This section confirms that there were no purchases of equity securities by the company or its affiliated purchasers during the reporting period - No purchases of equity securities by the issuer or affiliated purchasers were made[129] Item 3. Defaults Upon Senior Securities. The company reported no defaults upon senior securities - There were no defaults upon senior securities[130] Item 4. Mine Safety Disclosures. This item is not applicable to the company - This item is not applicable[131] Item 5. Other Information. This section confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter, and no additional information is provided - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter ended June 30, 2025[132] Trading Arrangements This section confirms that no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers - No Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarterly period ended June 30, 2025[132] Additional Information This section states that no further information is provided beyond what is already disclosed in the report - No additional information is provided[133] Item 6. Exhibits. This section lists all exhibits filed as part of, or incorporated by reference into, the report, including underwriting agreements, organizational documents, warrant agreements, and certifications - The report includes various exhibits such as the Underwriting Agreement, Amended and Restated Memorandum and Articles of Association, Warrant Agreement, and Investment Management Trust Agreement[135] - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002 are filed/furnished[135] SIGNATURES This section provides the official signatures of the company's executive and financial officers, certifying the report's contents - The report is signed by Joseph Naggar, Chief Executive Officer, and Jon Knipper, Chief Financial Officer, on August 14, 2025[141]