RF Acquisition Corp. Reports Significant Financial Decline, Net Loss, and Compliance Challenges

RF Acquisition Corp. (RFAC) reported significant financial changes in its quarterly filing for the period ending September 30, 2024. The company, classified as a shell entity and an emerging growth company, experienced a notable decrease in total assets, which fell to $17.9 million from $30.0 million at the end of 2023. Current assets also declined, with cash on hand dropping sharply from $188.2 thousand to $18.5 thousand. The cash held in the Trust Account decreased from $29.7 million to $17.7 million during the same period.

Total liabilities increased to $6.8 million, up from $5.1 million, while the accumulated deficit grew from $(4.7 million) to $(6.7 million). The total stockholders’ deficit also widened from $(4.7 million) to $(6.7 million).

In terms of operational performance, RFAC reported a net loss of $(485.2 thousand) for the third quarter of 2024, compared to a net income of $15.2 thousand in the same quarter of 2023. For the nine months ended September 30, 2024, the net loss was $(544.8 thousand), a significant increase from $(78.9 thousand) in the prior year. The company’s interest income decreased to $385.8 thousand from $488.8 thousand year-over-year, reflecting a broader trend of declining revenues.

Operating expenses for the third quarter rose to $750.5 thousand, up from $331.4 thousand in the previous year, while total other income also fell. The effective income tax rate for the quarter was reported at (17.01)%, compared to 85.83% in the same period of 2023.

RFAC has been actively managing its business combination timeline, extending the deadline to March 28, 2025, after redeeming 1.2 million shares at approximately $11.23 per share, totaling $13.1 million in redemption payments. This followed previous redemptions and extensions approved by shareholders, reflecting ongoing efforts to secure a viable business combination.

The company has also faced challenges regarding compliance with Nasdaq listing requirements, with a potential delisting notice issued due to insufficient stockholder numbers. RFAC has appealed this decision, with a hearing scheduled for December 2024.

As of the end of September 2024, RFAC's cash position was precarious, with a working capital deficit of $6.7 million, raising concerns about its ability to continue as a going concern. The company has not commenced any operations beyond formation activities and the initial public offering, which took place in March 2022, generating $100 million in gross proceeds.