DSACW · Daedalus Special Acquisition Corp.

For the three months ended March 31, 2026, Daedalus Special Acquisition Corp. reported net income of $2,030,262, driven by income earned on investments held in the Trust Account and gain on expiration of over-allotment liability, partially offset by formation, general, and administrative expenses of $272,681. This performance aligns with the company's status as a special purpose acquisition company actively seeking a business combination, where operating activities generate losses absent revenue until post-merger.

The operating loss of $272,681 arises entirely from formation, general, and administrative costs necessary to maintain compliance, prepare financial reporting, and conduct due diligence on potential targets. These expenses reflect disciplined management of overhead during the pre-combination phase, avoiding unnecessary dilution or premature capital raises. Net cash provided by operating activities was negative $278,253, primarily due to the cash impact of these expenses after non-cash adjustments for Trust Account interest accretion. This cash utilization supports ongoing target search efforts without reliance on external debt, as the company maintains no long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities.

Liquidity remains adequate for current operations, with management expressing confidence that no additional funds are needed to meet expenditures prior to a business combination. However, to address potential working capital deficiencies or transaction costs, the Sponsor or certain officers and directors may provide loans, though they are not obligated to do so. At March 31, 2026, no Working Capital Loans were outstanding, underscoring clean balance sheet positioning.

Looking forward, management anticipates incurring significant costs as acquisition efforts intensify, including legal, auditing, and negotiation expenses. Success is not assured, with risks tied to target identification, due diligence outcomes, and potential shareholder redemptions that could impact deal economics. Critical accounting estimates for redeemable shares and warrants introduce fair value changes that are non-cash but may cause earnings volatility. Investors should monitor progress toward a business combination, as extended search periods could elevate cash burn outside the protected Trust Account, testing operational resilience.