RACHIGH SIGNALRISK10-Q

RAC explicitly disclosed a going concern qualification, stating it lacks sufficient liquidity to sustain operations for at least one year while cash burned down 27% to just $401K.

The addition of going concern language represents a material escalation in financial distress for this SPAC, indicating management believes the company may not survive without additional funding or a successful acquisition. With cash declining significantly and current liabilities doubling, RAC faces immediate liquidity pressures that threaten its viability as it continues pursuing acquisition targets.

Comparing 2026-02-06 vs 2025-08-11View on EDGAR →
FINANCIAL ANALYSIS

RAC's financial position deteriorated meaningfully with cash declining 27% to $401K while current liabilities nearly doubled to $102K, creating a liquidity squeeze. Despite operating cash flow losses improving 72% and operating income losses decreasing 31%, net income still fell 27% to $2.2M, likely driven by lower trust account investment returns. The overall picture shows a SPAC burning through limited cash reserves while struggling to complete an acquisition, creating urgent funding needs that prompted the going concern disclosure.

FINANCIAL STATEMENT CHANGES
Current Liabilities
Balance Sheet
+98.8%
$51K→$102K

Current liabilities surged 98.8% — significant near-term obligations; verify ability to meet short-term debt.

Operating Cash Flow
Cash Flow
+71.5%
-$526K→-$150K

Operating cash flow surged 71.5% — exceptional cash generation, highest quality earnings signal.

Operating Income
P&L
+30.9%
-$393K→-$272K

Operating leverage kicking in — revenue growth outpacing cost growth, a hallmark of scaling businesses.

Cash & Equivalents
Balance Sheet
-27.2%
$551K→$401K

Cash decreased 27.2% — monitor burn rate and upcoming capital needs.

Net Income
P&L
-26.9%
$3.0M→$2.2M

Net income declined 26.9% — review whether driven by operations, interest costs, or non-recurring items.

Current Assets
Balance Sheet
-21.3%
$804K→$633K

Current assets declined 21.3% — monitor working capital adequacy and short-term liquidity.

LANGUAGE CHANGES
NEW — 2026-02-06
PRIOR — 2025-08-11
ADDED
FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 2025 Page Part I.
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Rithm Acquisition Corp.
As of December 31, 2025, the Company had not commenced any operations.
Liquidity, Capital Resources and Going Concern As of December 31, 2025, the Company had cash of $ 401,091 and working capital of $ 530,764 .
As of December 31, 2025 and September 30, 2025, the Company had no borrowings under the Working Capital Loans.
In connection with the Company s assessment of going concern considerations in accordance with Financial Accounting Standards Board ( FASB ) Accounting Standards Codification ( ASC ) 205-40, Financial Presentation - Going Concern, management has determined that the Company currently lacks the liquidity it needs to sustain operations for a reasonable period of time, which is considered to be at least one year from the date that the unaudited financial statements are issued as it expects to continue to incur significant costs in pursuit of its acquisition plans.
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.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company s Annual Report on Form 10-K as filed with the SEC on December 19, 2025 for the fiscal year ended September 30, 2025.
The interim results for the three months ended December 31, 2025 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2026, or for any future periods.
Use of Estimates The preparation of the condensed financial statements in conformity with U.S.
REMOVED
As of June 30, 2025, the Company had not commenced any operations.
Liquidity, Capital Resources and Going Concern As of June 30, 2025, the Company had cash of $ 819,538 and a working capital of $ 851,045 .
As of June 30, 2025, the Company had no borrowings under the Working Capital Loans.
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 February 27, 2025, as well as the Company s Current Report on Form 8-K, as filed with the SEC on March 6, 2025.
The interim results for the three months ended June 30, 2025 and for the period from November 21, 2024 (inception) through June 30, 2025 are not necessarily indicative of the results to be expected for the year ending September 30, 2025 or for any future periods.
The Company had $ 819,538 in cash and no cash equivalents as of June 30, 2025.
Cash Held in Trust Account As of June 30, 2025, the assets held in the Trust Account, amounting to $ 233,369,576 , were held in demand deposit.
Financial Accounting Standards Board ( 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.
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.
As of June 30, 2025, the Warrants are exercisable to purchase 7,886,667 ordinary shares.
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