RF Acquisition (RFAC) - 2023 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the company's financial statements, management's discussion and analysis, market risk disclosures, and internal controls for the reporting period Financial Statements The financial statements for June 30, 2023, reflect decreased assets from redemptions, net losses, and going concern uncertainty due to a looming business combination deadline Condensed Balance Sheets Total assets significantly decreased to $43.7 million by June 30, 2023, primarily due to trust account redemptions, while liabilities and stockholders' deficit increased Condensed Balance Sheet Comparison (Unaudited) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Assets | $43,707,638 | $118,089,038 | | Investments held in Trust Account | $43,217,846 | $117,724,476 | | Cash | $285,476 | $19,759 | | Total Liabilities | $3,622,203 | $1,094,736 | | Promissory note – related party | $583,000 | $0 | | Accounts payable and accrued expenses | $940,734 | $140,312 | | Total Stockholders' Deficit | $(2,671,413) | $(151,930) | - On June 26, 2023, the company converted all issued and outstanding shares of Class B Common Stock to Class A Common Stock on a one-for-one basis[7] Condensed Statements of Operations The company reported a net loss of $244,473 for Q2 2023, while the six-month net loss improved to $94,085 due to higher interest income Statement of Operations Summary (Unaudited) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Loss from operations | $(586,781) | $(274,202) | $(1,365,167) | $(274,202) | | Interest income | $498,136 | $155,202 | $1,724,795 | $156,298 | | Net income (loss) | $(244,473) | $(169,000) | $(94,085) | $(217,269) | Condensed Statements of Cash Flows Net cash used in operations was $935,218, while investing activities provided $76.2 million, primarily from trust account withdrawals for redemptions Cash Flow Summary for Six Months Ended June 30 (Unaudited) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(935,218) | $(1,205,343) | | Net cash provided by (used in) investing activities | $76,231,425 | $(116,096,966) | | Net cash provided by (used in) financing activities | $(75,030,490) | $117,700,254 | | Net Change in Cash | $265,717 | $397,945 | - The company paid $76,054,240 to redeeming shareholders during the first six months of 2023[17] Notes to Condensed Financial Statements Notes detail the company's blank check nature, extended business combination deadline, going concern uncertainty, significant share redemptions, and related party financing - The company is a blank check company formed to effect a business combination, with a focus on financial services, media, technology, retail, communication, transportation, and education sectors[19] - The deadline to consummate a business combination was extended to December 28, 2023, Failure to meet this deadline will result in mandatory liquidation[26][35] - In connection with the extension, holders of 7,391,973 Class A shares exercised redemption rights at ~$10.29 per share, totaling $76,054,240 in payments[26] - The company recorded a $760,542 excise tax expense related to the shareholder redemptions, following the implementation of the Inflation Reduction Act of 2022[45] - A Director of the company agreed to loan up to $1,200,000 via a promissory note to fund extension payments and working capital; $583,000 was drawn as of June 30, 2023[89] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's blank check status, improved net loss due to interest income, and significant going concern uncertainty due to the business combination deadline - The company is a blank check company with activities limited to formation, the IPO, and searching for a business combination[127][129] - A going concern uncertainty exists as the company has until December 28, 2023, to consummate a business combination, or it will face mandatory liquidation[139] Financial Position Summary | Metric | As of June 30, 2023 | | :--- | :--- | | Cash outside Trust Account | $285,476 | | Investments in Trust Account | $43,217,846 | | Working Capital Deficit | $(3,132,411) | - Following an extension vote, holders of 7,391,973 shares redeemed their stock, resulting in a $76,054,240 payment from the trust account and a $760,542 excise tax charge[137] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide market risk disclosures, but notes minimal interest rate risk on trust account investments - The company is a smaller reporting company and is not required to provide the information under this item[165] - Proceeds in the Trust Account are invested in short-term U.S. government securities or money market funds, minimizing material exposure to interest rate risk[161] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal controls during the quarter - Management concluded that as of June 30, 2023, the company's disclosure controls and procedures were effective[167] - There were no changes to internal control over financial reporting during the fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[169] PART II. OTHER INFORMATION This section covers legal proceedings, updated risk factors, details on unregistered equity sales, and a list of filed exhibits Legal Proceedings The company reports no legal proceedings - None[170] Risk Factors No material changes to previously disclosed risk factors were reported in this period - As of the date of this report, there have been no material changes to the risk factors disclosed in the company's IPO prospectus (March 24, 2022) or its Form 10-K (April 26, 2023)[171] Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities Details unregistered sales of Founder Shares and Private Placement Warrants, alongside the use of IPO proceeds, primarily for significant shareholder redemptions - The company issued 2,875,000 Founder Shares to the Sponsor for $25,000 in an unregistered sale[172] - Simultaneously with the IPO, the company sold 5,000,000 Private Placement Warrants at $1.00 each, raising $5,000,000 in an unregistered sale[176] - From the IPO proceeds, $76,054,240 was paid out on April 3, 2023, to satisfy redemption requests from holders of 7,391,973 shares of Class A common stock[177] Other Information The company reports no other information - None[180] Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and Inline XBRL data files Filed Exhibits | Exhibit No. | Description | | :--- | :--- | | 31.1 / 31.2 | Certifications of Principal Executive/Financial Officer (SOX 302) | | 32.1 / 32.2 | Certifications of Principal Executive/Financial Officer (SOX 906) | | 101 Series | Inline XBRL Instance, Calculation, Schema, Definition, Labels, and Presentation Documents | | 104 | Cover Page Interactive Data File |