PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Rigel Resource Acquisition Corp.'s unaudited financial statements detail its position, operations, and cash flows, impacted by share redemptions and financing Condensed Consolidated Balance Sheets Total assets decreased to $31.7 million from $83.5 million due to trust account cash reduction; total liabilities increased to $34.8 million, widening the shareholders' deficit Condensed Consolidated Balance Sheet Summary (in $) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | 59,865 | 148,968 | | Cash and Investments held in the Trust Account | 31,688,265 | 83,293,711 | | Total Assets | 31,748,130 | 83,519,388 | | Liabilities | | | | Total Current Liabilities | 20,473,552 | 17,886,002 | | Derivative liabilities | 14,294,227 | 16,098,952 | | Total Liabilities | 34,767,779 | 33,984,954 | | Shareholders' Deficit | | | | Total Shareholders' Deficit | (34,707,914) | (33,759,277) | Condensed Consolidated Statements of Operations The company reported net income of $770,345 for six months ended June 30, 2025, driven by derivative liability fair value changes, despite a widened net loss for the three-month period Condensed Consolidated Statements of Operations (in $) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Expenses | 794,676 | 2,473,409 | 2,291,941 | 4,723,463 | | Change in fair value of derivative liabilities | (7,914,227) | (1,701,611) | 1,804,725 | (6,003,747) | | Income earned on Trust Account | 456,674 | 2,960,440 | 1,117,836 | 5,932,526 | | Net income (loss) | (8,108,817) | (1,247,240) | 770,345 | (4,153,802) | | Basic and diluted net income (loss) per share | (0.67) | (0.04) | 0.06 | (0.13) | Condensed Consolidated Statements of Changes in Shareholders' Deficit The shareholders' deficit increased to $34.7 million by June 30, 2025, primarily due to a net loss of $8.1 million in Q2 and accretion of Class A ordinary shares - The total shareholders' deficit increased from $(33,759,277) as of January 1, 2025, to $(34,707,914) as of June 30, 202515 - Key drivers for the change in deficit during the six months ended June 30, 2025, included net income of $8,879,162 in Q1, a net loss of $(8,108,817) in Q2, and accretion of Class A ordinary shares to redemption value totaling $(1,808,200)15 Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $739,103, with investing activities providing $52.7 million and financing using $52.1 million, leading to a net decrease in cash Six Months Ended June 30, 2025 Cash Flow Summary (in $) | Cash Flow Category | Amount | | :--- | :--- | | Net Cash Used In Operating Activities | (739,103) | | Net Cash Provided By Investing Activities | 52,723,282 | | Net Cash Used In Financing Activities | (52,073,282) | | Net change in cash | (89,103) | | Cash at end of period | 59,865 | - The company withdrew $53.4 million from its Trust Account for share redemptions and made payments of the same amount for these redemptions during the six months ended June 30, 202517 Notes to Condensed Consolidated Financial Statements Notes detail the company's SPAC operations, Business Combination with Aurous, deadline extensions, share redemptions, derivative liability accounting, and going concern doubts - The company is a SPAC that entered into a Business Combination Agreement on March 11, 2024, with Blyvoor Gold Resources (now Aurous Gold) and Gauta Tailings2021 - The company has repeatedly extended its deadline to consummate a business combination, with the current deadline being November 9, 2025. These extensions have been funded by a series of convertible promissory notes from the Sponsor and its affiliates4045135 - Significant redemptions of Class A ordinary shares have occurred, reducing the amount in the Trust Account. The latest redemption in August 2025 left approximately $18.4 million in the trust45135 - Management has concluded that there is substantial doubt about the Company's ability to continue as a going concern due to its limited liquidity and the impending business combination deadline48 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Rigel's financial condition, operations, and proposed Business Combination, highlighting net income from derivative liability changes, liquidity challenges, and going concern doubts - The company is a blank check company that entered into a Business Combination Agreement with Aurous, a South African gold mining company, on March 11, 2024138 - For the six months ended June 30, 2025, the company had net income of $770,345, compared to a net loss of $4,153,802 for the same period in 2024, primarily due to fluctuations in the fair value of derivative liabilities142144 - The company's liquidity is severely constrained, with only $59,865 in cash outside the Trust Account as of June 30, 2025. It relies on loans from its Sponsor to fund operations155156 - Management has identified a material weakness in internal controls over financial reporting related to the proper presentation of financial statements in accordance with GAAP, particularly concerning complex financial instruments190 Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Rigel is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Rigel Resource Acquisition Corp is not required to provide quantitative and qualitative disclosures about market risk189 Item 4. Controls and Procedures Management concluded disclosure controls and procedures were ineffective due to a material weakness in internal controls over financial reporting, with remediation efforts underway - Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025190 - A material weakness in internal controls over financial reporting was identified, relating to the ineffective operation of processes to ensure financial statements were properly presented in accordance with GAAP190 - Remediation efforts are underway, including adding resources and enhancing management oversight for accounting of complex financial instruments and accrual of operating expenses191 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reports no legal proceedings to disclose - The company has no legal proceedings to report196 Item 1A. Risk Factors No material changes to previously disclosed risk factors were reported, directing readers to the Annual Report and Registration Statement for Business Combination risks - There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K filed on March 24, 2025197 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred, and the planned use of proceeds from the IPO and Private Placement remains materially unchanged - No unregistered sales of equity securities occurred during the six months ended June 30, 2025198 - The planned use of proceeds from the IPO and Private Placement has not materially changed198 Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - The company has no defaults upon senior securities to report199 Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable200 Item 5. Other Information No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - During the second quarter of 2025, no director or officer of the company adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements201 Item 6. Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including charter amendments and officer certifications - The report includes exhibits such as amendments to the company's charter documents and certifications from the Principal Executive Officer and Principal Financial Officer203204
Rigel Resource Acquisition (RRAC) - 2025 Q2 - Quarterly Report