RDAC · Rising Dragon Acquisition Corp.

Rising Dragon Acquisition Corp. (RDAC), as a special purpose acquisition company, reported net income of $212.0 thousand for the quarter ended March 31, 2026, reflecting a 53.3% year-over-year decline from $453.9 thousand in the prior year quarter. This reduction stems from the operational realities of pursuing an initial business combination in a pre-merger phase, where costs associated with maintaining the structure and seeking targets pressure profitability despite non-operating interest income from the Trust Account. Investors should note that such dynamics are typical for SPACs in this stage, balancing formation and administrative expenses against interest earned on IPO proceeds held for public shareholders.

Cash flow from operating activities showed increased usage at -$260.5 thousand, compared to -$125.3 thousand in Q1 FY2025, highlighting accelerated cash burn as the Company advances toward a potential combination. This deeper outflow underscores the cash-intensive nature of pre-combination activities, reliant on non-dilutive funding sources rather than revenue generation.

Contractual Obligations are minimal, with no long-term debt, capital lease obligations, operating lease obligations, or other long-term liabilities, preserving a clean balance sheet for post-merger execution. The Trust Account continues to generate non-operating income from interest on invested IPO proceeds, which directly supports the reported net income in the absence of operating revenue.

Business drivers include Sponsor registration rights—demand and piggyback—tied to Private Units purchased alongside the IPO. Holders can make up to three demands (excluding short form) for securities registration, though underwriter affiliates are limited to one demand within five years from the registration statement effective date. These provisions facilitate post-combination liquidity for insiders while aligning interests with public shareholders. Overall, RDAC's position reflects disciplined pre-combination management, with Trust Account interest offsetting costs and Sponsor liquidity ensuring runway toward a value-accretive merger.