Rice Acquisition 3 (NYSE: KRSP) Q1 2026 SPAC cash and trust update
Rice Acquisition Corporation 3, a Cayman Islands-based SPAC, reported net income of $2.75 million for the three months ended March 31, 2026, driven entirely by interest on IPO proceeds held in trust.
The company earned $3.11 million of interest on $351.5 million in its Trust Account while incurring $0.36 million of general and administrative costs. Total assets were $354.2 million, including $2.3 million of cash outside the trust, and shareholders’ deficit was $13.6 million.
Rice Acquisition Corporation 3 has not begun operating a business and continues to search for a Business Combination, with 34.5 million Class A public shares recorded at redemption value and 11.5 million Class B founder shares outstanding.
Positive
- None.
Negative
- None.
Insights
Early-stage SPAC earning trust interest, still pre-deal.
Rice Acquisition Corporation 3 is in the pre-acquisition phase, so results mainly reflect balance-sheet mechanics. For Q1 2026 it recorded net income of $2.75M, almost entirely from $3.11M of interest on funds invested in its Trust Account.
Total assets were $354.17M as of March 31, 2026, including $351.51M in the Trust Account and $2.31M of cash for working capital. General and administrative costs were modest at $356,661, consistent with a SPAC that has not yet closed a deal.
All 34.5 million public Class A shares are classified as redeemable at a per-share redemption value of about $10.19, and 11.5 million Class B founder shares remain outstanding. Future filings covering a completed Business Combination, if achieved within the stated combination period, will determine the long-term economics.
Key Figures
Key Terms
Trust Account financial
Business Combination financial
Private Placement Warrants financial
Forward Purchase Agreement financial
Class A ordinary shares subject to possible redemption financial
Emerging growth company regulatory
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
For the transition period from to
Commission file number:
(Exact Name of Registrant as Specified in Its Charter)
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(I.R.S. Employer Identification No.) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company | ||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of May 12, 2026, there were
TABLE OF CONTENTS
| Page | ||
| Part I - Financial Information | ||
| Item 1. Interim Financial Statements. | 1 | |
| Condensed Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025 | 1 | |
| Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 2026 | 2 | |
| Condensed Consolidated Statement of Changes in Shareholders’ Deficit for the Three Months Ended March 31, 2026 | 3 | |
| Condensed Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2026 | 4 | |
| Notes to Condensed Consolidated Financial Statements (Unaudited) | 5 | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 21 | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk. | 24 | |
| Item 4. Controls and Procedures. | 24 | |
| Part II - Other Information | ||
| Item 1. Legal Proceedings. | 25 | |
| Item 1A. Risk Factors. | 25 | |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. | 25 | |
| Item 3. Defaults Upon Senior Securities. | 25 | |
| Item 4. Mine Safety Disclosures. | 25 | |
| Item 5. Other Information. | 25 | |
| Item 6. Exhibits. | 26 | |
| Signatures | 27 |
i
PART I - FINANCIAL INFORMATION
Item 1. Interim Financial Statements.
RICE ACQUISITION CORPORATION 3
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| Assets: | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Short-term prepaid insurance | ||||||||
| Total current assets | ||||||||
| Long-term prepaid insurance | ||||||||
| Cash held in Trust Account | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit | ||||||||
| Liabilities: | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued offering costs | — | |||||||
| Due to related party | ||||||||
| Total current liabilities | ||||||||
| Deferred legal fee | ||||||||
| Deferred underwriting fee payable | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 5) | ||||||||
| Class A ordinary shares subject to possible redemption, | ||||||||
| Shareholders’ Deficit: | ||||||||
| Preference shares, $ | — | — | ||||||
| Class A ordinary shares, $ | — | — | ||||||
| Class B ordinary shares, $ | ||||||||
| Additional paid-in capital | — | — | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Rice Acquisition Corporation 3 Shareholders’ Deficit | ( | ) | ( | ) | ||||
| Non-controlling interest in subsidiary | ||||||||
| Total Shareholders’ Deficit | ( | ) | ( | ) | ||||
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
RICE ACQUISITION CORPORATION 3
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2026
(UNAUDITED)
| General and administrative costs | $ | |||
| Loss from operations | ( | ) | ||
| Other income: | ||||
| Interest earned on cash held in Trust Account | ||||
| Net income | ||||
| Net income attributable to non-controlling interest | ||||
| Net income attributable to Rice Acquisition Corporation 3 | $ | |||
| Basic and diluted weighted average shares outstanding of Class A redeemable ordinary shares | ||||
| Basic and diluted net income per Class A ordinary share | $ | |||
| Basic and diluted weighted average shares outstanding of Class B non-redeemable ordinary shares | ||||
| Basic and diluted net income per Class B ordinary share | $ |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
RICE ACQUISITION CORPORATION 3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2026
(UNAUDITED)
| Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in | Accumulated | Non-controlling Interest in | Total Shareholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Capital | Amount | Capital | Deficit | Subsidiary | Deficit | |||||||||||||||||||||||||
| Balance — January 1, 2026 | $ | — | $ | $ | — | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||
| Accretion for Class A ordinary shares to redemption amount | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||
| Balance – March 31, 2026 (unaudited) | $ | — | $ | $ | — | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
RICE ACQUISITION CORPORATION 3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2026
(UNAUDITED)
| Cash Flows from Operating Activities: | ||||
| Net income | $ | |||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||
| Interest earned on cash held in Trust Account | ( | ) | ||
| Changes in operating assets and liabilities: | ||||
| Prepaid expenses | ( | ) | ||
| Short-term prepaid insurance | ||||
| Long-term prepaid insurance | ||||
| Accounts payable and accrued expenses | ||||
| Deferred legal fee | ||||
| Net cash used in operating activities | ( | ) | ||
| Cash Flows from Financing Activities: | ||||
| Payment of offering costs | ( | ) | ||
| Net cash provided by financing activities | ( | ) | ||
| Net Change in Cash: | ( | ) | ||
| Cash – Beginning of period | ||||
| Cash – End of period | $ | |||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
4
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Rice Acquisition Corporation 3 is a blank check company incorporated as a Cayman Islands exempted company on
As of March 31, 2026, the Company had not commenced any operations. All activity for the period from June 6, 2025 (inception) through March 31, 2026 relates to the Company’s formation, the Initial Public Offering (as defined below) and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from a portion of the proceeds derived from the Initial Public Offering and the sale of the Private Placement Warrants (as defined below). The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s Initial Public Offering was declared effective on September 30, 2025. On October 2, 2025, the Company consummated the initial public offering (the “Initial Public Offering”) of
The Company’s sponsor is Rice Acquisition Sponsor 3 LLC, a Delaware limited liability company (the “Sponsor”). Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of
Transaction costs amounted to $
Following the closing of the Initial Public Offering, the Public Shareholders (as defined below) hold a direct economic equity ownership interest in the Company in the form of Class A ordinary shares, and an indirect ownership interest in Opco through the Company’s ownership of Class A units of Opco. By contrast, the Initial Shareholders (as defined below) own Founder Securities (as defined in Note 4) and Sponsor Securities (as defined in Note 4) which include direct economic interests in Opco in the form of Class A and Class B units of Opco and a corresponding non-economic voting equity interest in the Company in the form of Class B ordinary shares (see Note 4).
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least
5
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
Following the closing of the Initial Public Offering on October 2, 2025, an amount of $
The Company will provide the holders (the “Public Shareholders”) of the Company’s outstanding Class A ordinary shares, par value $
These Public Shares are recorded at redemption value and classified as temporary equity in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”).
If the Company is unable to complete a Business Combination within 24 months (or 27 months if Sponsor exercises its three-month extension option) from the closing of the Initial Public Offering (the “Combination Period”) or if the Company’s board of directors approves an earlier liquidation, the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes of the Company or Opco, if any (less up to $
6
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
Pursuant to the Second Amended and Restated Limited Liability Agreement of Opco (the “Opco LLC Agreement”) and a letter agreement that the Sponsor, and the Company’s officers and directors have entered into with the Company, the Sponsor and the Company’s officers and directors have agreed (i) to waive their redemption rights with respect to their Founder Securities and Sponsor Securities, (ii) to waive their redemption rights with respect to their Founder Securities, Sponsor Securities and Public Shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association that would modify the substance or timing of its obligation to provide holders of the Company’s Class A ordinary shares the right to have their shares redeemed in connection with the Company’s initial Business Combination or to redeem
The underwriters have agreed to waive their rights to their deferred underwriting commission held in the Trust Account in the event the Company does not consummate an initial Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per-share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared and presented in U.S. dollars in accordance with accounting principles generally accepted in the United States of America (“U.S. 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. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the period presented.
7
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
The unaudited condensed consolidated financial statements include the accounts of the Company and a variable interest entity (“VIE”) under the VIE provisions of FASB ASC 810, “Consolidation” (“ASC 810”). Intercompany balances and transactions have been eliminated upon consolidation.
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2025, as filed with the SEC on March 19, 2026. The interim results for the three months ended March 31, 2026, are not necessarily indicative of the results to be expected for the period ending December 31, 2026 or for any future periods.
Variable Interest Entity
The Company determines at the inception of each arrangement whether an entity in which the Company holds an investment or in which the Company has other variable interests is considered a VIE. The Company consolidates a VIE’s balance sheet and results of operations into the unaudited condensed consolidated financial statements when the Company is the primary beneficiary that meets both of the following criteria: (1) the Company has the power to direct the activities that most significantly affect the VIE’s economic performance and (2) the Company has the obligation to absorb losses or the right to receive benefits of the VIE that in either case could potentially be significant to the VIE.
The Company continually reassesses where it is the primary beneficiary of a VIE for the consolidation analysis. If the Company is not the primary beneficiary in a VIE, the Company accounts for the investment or other variable interest in accordance with applicable U.S. GAAP. Please refer to Note 8 for more details.
The Company will reconsider whether an entity is still a VIE if certain reconsideration events occur as defined in ASC 810.
Non-controlling Interest
Non-controlling interest represents the portion of equity not attributable to the Company and is reported as a separate component of equity on the condensed consolidated balance sheets. Net loss for consolidated VIE is attributed to the Company and to a non-controlling interest holder on the condensed consolidated statement of operations based on respective capital balances.
Liquidity and Capital Resources
The Company’s liquidity needs up to March 31, 2026 had been satisfied through the loan under an unsecured promissory note from the Sponsor of up to $
In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Subtopic 205-40, “Presentation of Financial Statements — Going Concern,” the Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the initial Business Combination. Our management has determined that upon the consummation of the Initial Public Offering and the sale of the Private Placement Warrants, the Company has sufficient funds to finance the working capital needs of the Company within one year from the date of issuance of the unaudited condensed consolidated financial statements.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
8
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $
Cash Held in Trust Account
As of March 31, 2026 and December 31, 2025, the assets held in the Trust Account, amounting to $
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurements,” approximates the carrying amounts represented in the condensed consolidated balance sheets, primarily due to their short-term nature.
Offering Costs
The Company complies with the requirements of the FASB ASC Subtopic 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC Subtopic 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. The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between Class A ordinary shares and warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the warrants and then to the Class A ordinary shares. Offering costs allocated to the Class A ordinary shares subject to possible redemption are charged to temporary equity and offering costs allocated to the Public Warrants and Private Placement Warrants are charged to shareholders’ equity (deficit) as Public Warrants and Private Placement Warrants, and, after management’s evaluation are accounted for under equity treatment. Transaction costs amounted to $
9
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
Income Taxes
The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2026 and December 31, 2025, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed consolidated statement of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the condensed consolidated balance sheets as current or non-current based on whether or not net cash settlement or conversion of the instrument could be required within 12 months of the condensed consolidated balance sheet date.
Warrant Instruments
The Company accounted for the Public Warrants and Private Placement Warrants issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in ASC 815. Accordingly, the Company evaluated and determined the warrants issued in the Initial Public Offering should be classified under equity treatment at their assigned values for Public Warrants and at their purchase price for Private Placement Warrants.
10
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
Share-Based Payment Arrangements
The Company accounts for stock awards in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation” (“ASC 718”), which requires that all equity awards be accounted for at their “fair value.” Fair value is measured on the grant date and is equal to the underlying value of the share.
Costs equal to these fair values are recognized ratably over the requisite service period based on the number of awards that are expected to vest, in the period of grant for awards that vest immediately and have no future service condition, or in the period the awards vest immediately after meeting a performance condition becomes probable (i.e., the occurrence of a Business Combination). For awards that vest over time, cumulative adjustments in later periods are recorded to the extent actual forfeitures differ from the Company’s initial estimates; previously recognized compensation cost is reversed if the service or performance conditions are not satisfied and the award is forfeited.
Forward Purchase Agreement
On August 25, 2025, the Company entered into the Forward Purchase Agreement (as defined below) (see Note 4). The Company accounted for the Forward Purchase Agreement as a derivative instrument in accordance with the guidance in FASB ASC Subtopic 815-40 (“ASC 815-40”). The Forward Purchase Agreement is a freestanding instrument that is indexed to the issuer’s own stock, mandatorily settleable in shares, contains no problematic cash settlement or variability features, and is not subject to ASC 480 liability treatment. As such, the instrument is appropriately classified as permanent equity under ASC 815-40. In accordance with FASB ASC Subtopic 815-40-30-1, the Forward Purchase Agreement is initially recorded and measured at relative fair value (i.e., most often representative of the transaction price (i.e., proceeds received for equity-linked instruments allocated on relative fair value basis)); however, when measuring the fair value of the Forward Purchase Agreement, the guidance in ASC Topic 820, “Fair Value Measurement,” will be followed. In accordance with FASB ASC Subtopic 815-40-35-2 and as a result of the Forward Purchase Agreement initially being classified as permanent equity under FASB ASC Subtopic 815-40-25, the Forward Purchase Agreement will continue to be accounted for within permanent equity as long as the Forward Purchase Agreement continues to meet the permanent equity classification requirements. Subsequent changes in fair value of the Forward Purchase Agreement will not be recognized as long as the Forward Purchase Agreement continues to meet the permanent equity classification requirements.
Class A Ordinary Shares Subject to Possible Redemption
The Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, or if there is a shareholder vote or tender offer in connection with the Company’s initial Business Combination. In accordance with FASB ASC Subtopic 480-10-S99, the Company classifies Public Shares subject to possible redemption outside of permanent equity, as the redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit. Accordingly, as of March 31, 2026 and December 31, 2025, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed consolidated balance sheets.
| Gross proceeds | $ | |||
| Less: | ||||
| Proceeds allocated to Public Warrants | ( | ) | ||
| Public Shares issuance costs | ( | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Class A ordinary shares subject to possible redemption, December 31, 2025 | ||||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Class A ordinary shares subject to possible redemption, March 31, 2026 | $ |
11
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
Net Income per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income per ordinary share is computed by dividing net income attributable to the controlling interest by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture.
The calculation of diluted net income per ordinary share does not consider the effect of the Public Warrants issued in connection with the Initial Public Offering and the Private Placement Warrants to purchase an aggregate of
Weighted average ordinary shares at March 31, 2026 were reduced for the effect of an aggregate of
The following tables present a reconciliation of the numerator and denominator used to compute basic and diluted net income per ordinary share for each class of ordinary shares:
| For the Three Months Ended March 31, 2026 | ||||||||
| Basic and diluted net income per ordinary share: | Class A | Class B | ||||||
| Numerator: | ||||||||
| Allocation of net income excluding non-controlling interest | $ | $ | ||||||
| Denominator: | ||||||||
| Weighted-average shares outstanding | ||||||||
| Basic and diluted net income per ordinary share | $ | $ | ||||||
Recent Accounting Pronouncements
The Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements.
NOTE 3 — INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering on October 2, 2025, the Company sold
12
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
NOTE 4 — RELATED PARTY TRANSACTIONS
Founder Securities and Sponsor Securities
On June 20, 2025, the Sponsor received
On September 16, 2025, in exchange for their services as independent directors through the Company’s initial Business Combination, the Sponsor forfeited
Subsequently in September 2025, due to an increase in the size of the Initial Public Offering, the Company effected a share capitalization of
As a result, the Initial Shareholders, which include the Sponsor, currently own
The Sponsor had agreed to forfeit up to
The Sponsor and the Company’s directors and executive officers have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Securities, and any of the Company’s Class A ordinary shares acquired upon exchange of the Founder Securities, until the earliest of (i) six months after the completion of the initial Business Combination, and (ii) subsequent to the initial Business Combination, the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the Sponsor, Company’s directors and executive officers with respect to any Founder Securities.
The Company refers to the
13
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
The Company refers to the
The Class A units of Opco that comprise the Founder Securities and Sponsor Securities will be exchangeable (together with the cancellation of a corresponding number of the Company’s Class B ordinary shares) for the Company’s Class A ordinary shares after the completion of initial Business Combination on a one-for-one basis, subject to adjustment as provided herein. Each Class B ordinary share has no economic rights but entitles its holder to
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, the Sponsor, pursuant to a written agreement, purchased in a private placement an aggregate of
Promissory Note — Related Party
On June 20, 2025, the Sponsor agreed to loan the Company an aggregate of up to $
Due to Related Party
From June 6, 2025 (inception) through March 31, 2026, the Sponsor paid Company liabilities amounting to $
Working Capital Loans
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $
14
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
Administrative Services Agreement
Commencing on October 1, 2025, the date that the Company’s securities were first listed on the New York Stock Exchange, the Company agreed to pay the Sponsor a total of $
In addition, the Sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred with activities on the Company’s behalf, such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The audit committee will review on a quarterly basis all payments that were made by the Company to the Sponsor, officers or directors, or the Company’s or their affiliates. Any such payments prior to an initial Business Combination will be made from funds held outside the Trust Account. No such amounts were reimbursed or accrued for as of March 31, 2026 and December 31, 2025.
Forward Purchase Agreement
In contemplation of the Initial Public Offering, on August 25, 2025, the Company entered into a forward purchase agreement (the “Forward Purchase Agreement”) with Shalennial Acquisition Sponsor 3 LLC (“Rice Sponsor”) and Mercuria Energy Group Holding, SA (“Mercuria Sponsor”), whereby they have agreed to purchase
Settlement of the arrangement is contingent on the completion of the Business Combination and will occur only through the issuance of a fixed number of shares for a fixed amount of cash. If the business combination is not completed within the required timeframe or the agreement is terminated, the agreement becomes void and any amounts previously paid are returned, with no obligation for the Company to settle in cash or repurchase its shares. The Forward Purchase Agreement is a freestanding equity‑linked instrument indexed to the Company’s own stock and does not include any cash settlement features or other provisions that would require liability classification under ASC 480. Accordingly, the agreement qualifies for equity classification under ASC 815‑40 and is classified within permanent equity and not subsequently remeasured, so long as the equity classification criteria continue to be met.
On August 25, 2025, the fair value of the Forward Purchase Agreement was $
NOTE 5 — COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of Sponsor Securities, Founder Securities, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or exchange of the Founder Securities issued upon exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon exchange of the Founder Securities) are entitled to registration rights pursuant to a registration rights agreement entered into prior to the consummation of the Initial Public Offering (in the case of the Founder Securities, only after they become exchangeable for Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggyback” registration rights with respect to registration statements filed subsequent to the completion of the Company’s initial Business Combination. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
15
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
Underwriting Agreement
The underwriters had a 45-day option from the date of the Initial Public Offering to purchase up to an additional
The underwriters were entitled to an underwriting discount of $
Deferred Legal Fees
Certain of the Company’s legal counsel agreed to defer their fees in excess of the $
Risks and Uncertainties
The Company’s ability to complete an initial Business Combination may be adversely affected by various factors, many of which are beyond the Company’s control. The Company’s ability to consummate an initial Business Combination could be impacted by, among other things, changes in laws or regulations, downturns in the financial markets or in economic conditions, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. The Company cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they could adversely affect the Company’s search for an initial Business Combination and any target business with which the Company may ultimately consummate an initial Business Combination.
NOTE 6 — SHAREHOLDERS’ DEFICIT
Preference Shares — The Company is authorized to issue
Class A Ordinary Shares — The Company is authorized to issue
Class B Ordinary Shares — The Company is authorized to issue
16
RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
Ordinary shareholders of record are entitled to
Class A and Class B Units of Opco — For each Class B ordinary share of Rice Acquisition Corporation 3, there is a corresponding Class A or Class B unit of Opco. In connection with the initial Business Combination, or in certain circumstances described in the Opco LLC Agreement at specified times thereafter, the Class B units of Opco are expected to convert into Class A units of Opco on a one-for-one basis, subject to adjustment. The Class A units will be exchangeable (together with the cancellation of a corresponding number of the Company’s Class B ordinary shares) for the Company’s Class A ordinary shares after the time of the Company’s initial Business Combination on a one-for-one basis. The Class B ordinary shares comprising the Founder Securities and Sponsor Securities cannot be transferred without transferring a corresponding number of Class A units or Class B units of Opco, as applicable, and vice versa. Additionally, the Class B units that the Sponsor holds in the Opco were issued for no consideration and are profit interests only, no non-controlling interest will be ascribed to these Class B units.
On September 16, 2025, the Sponsor forfeited
As a result, the Initial Shareholders, which include the Sponsor, currently own
As of March 31, 2026 and December 31, 2025, there were an aggregate of
Warrants — As of March 31, 2026 and December 31, 2025, there were
Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable 30 days after the completion of a Business Combination; provided that the Company has an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, it will use its commercially reasonable efforts to file with the SEC and have an effective registration statement covering the Class A ordinary shares issuable upon exercise of the warrants and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.
The warrants have an exercise price of $
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RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
In addition, if (i) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $
Redemption of Public Warrants:
Once the Public Warrants become exercisable, the Company may redeem the outstanding warrants:
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | upon a minimum of |
| ● | if, and only if, the last sale price of the Class A ordinary shares equals or exceeds $ |
The Company will not redeem the warrants for cash unless a registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If the Company calls the warrants for redemption for cash as described above, the management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.”
Except as described below and in the private warrant agreement, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. The Private Placement Warrants (including the Class A ordinary shares or Class A units of Opco (and corresponding Class B ordinary shares) issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until
Upon the exercise of a warrant to purchase one Class A ordinary share, the Company will exercise a corresponding warrant to acquire one Class A unit of Opco.
If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
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RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
NOTE 7 — SEGMENT INFORMATION
FASB ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance.
The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the unaudited condensed consolidated statement of operations as net income or loss. The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.
| March 31, 2026 | December 31, 2025 | |||||||
| Cash held in Trust Account | $ | $ | ||||||
| Cash | ||||||||
| For the Three Months Ended March 31, 2026 | ||||
| General and administrative costs | $ | |||
| Interest earned on cash held in Trust Account | $ | |||
General and administrative costs are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination or similar transaction within the Combination Period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative costs, as reported on the unaudited condensed consolidated statement of operations, are the significant segment expenses provided to the CODM on a regular basis.
The CODM reviews the position of total assets available with the Company to assess if the Company has sufficient resources available to discharge its liabilities. The CODM is provided with details of cash and liquid resources available with the Company. Additionally, the CODM reviews interest earned on marketable securities held in Trust Account to measure and monitor shareholder value and determine the most effective strategy of cash with the Trust Account funds while maintaining compliance with the Investment Management Trust Agreement, dated September 30, 2025, by and among the Company, Opco and the Trustee (the “Trust Agreement”).
NOTE 8 — VARIABLE INTEREST ENTITY
The Company consolidates a VIE when the Company has the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits of the VIE, which could potentially be significant to the VIE, and, as a result, are considered the primary beneficiary of the VIE.
Opco — On June 10, 2025, the Company formed and registered a subsidiary, Opco, a Cayman Islands limited liability company, pursuant to the Limited Liability Companies Act (As Revised) for the sole purposes of effecting the initial Business Combination. On June 20, 2025, Opco issued
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RICE ACQUISITION CORPORATION 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
(UNAUDITED)
On September 16, 2025, in exchange for their services as independent directors through the Company’s initial Business Combination, the Sponsor forfeited
Pursuant to the Opco LLC Agreement, the Company was designated as the manager of Opco, granting the Company with the power to direct the activities that most significantly affect Opco’s economic performance without requiring any approval of Opco’s members. The Opco LLC Agreement provides that profits and losses of Opco be allocated pro rata to each member’s respective capital balance.
The Company concluded that the Company had a variable interest in Opco as the Company has the power to direct the activities that most significantly impact the economic performance of Opco and the obligation to absorb losses or the right to receive benefits of Opco. Therefore, the Company is the primary beneficiary of Opco and is required to consolidate Opco.
NOTE 9 — FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
| Level 3: | Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability. |
NOTE 10 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the condensed consolidated balance sheet date up to the date that the unaudited condensed consolidated financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this Quarterly Report on Form 10-Q (this “Quarterly Report”) to “we,” “us” or the “Company” refer to Rice Acquisition Corporation 3, and references in this Quarterly Report to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements include, but are not limited to, statements regarding our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report may include, for example, statements about our ability to select an appropriate target business or businesses; our ability to complete an initial Business Combination; our potential ability to obtain additional financing to complete our initial Business Combination; our public securities’ potential liquidity and trading; the lack of a market for our securities; the use of proceeds not held in the Trust Account or available to us from interest income on the Trust Account balance; or the Trust Account not being subject to claims of third parties.
The forward-looking statements contained in this Quarterly Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following:
| ● | our search for a Business Combination, and any Target with which we ultimately consummate a Business Combination, may be materially adversely affected by events that are outside of our control, such as increased geopolitical unrest, macroeconomic uncertainty, potential tariffs imposed by the United States or other countries, inflation and U.S. Federal Reserve interest rate adjustments in response thereto, and the volatility in the debt and equity markets; |
| ● | members of our management team and board have significant experience as founders, board members, officers, executives or employees of other companies; certain of those persons have been, are currently or may become involved in litigation, investigations or other proceedings, including related to those companies or otherwise, which may have an adverse effect on us and may impede our ability to consummate an initial Business Combination; |
| ● | if third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by our shareholders may be less than $10.00 per public share; and |
| ● | other factors described under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. |
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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Overview
We are a blank check company and were incorporated as a Cayman Islands exempted company on June 6, 2025 for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses. We intend to effectuate our initial Business Combination using cash derived from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our shares, debt or a combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any business operations nor generated any revenues to date. Our only activities from June 6, 2025 (inception) through March 31, 2026 were organizational activities, those necessary to prepare for the Initial Public Offering and, after the Initial Public Offering, identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. Following the Initial Public Offering, we generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance) as well as for due diligence expenses in connection with identifying a target company for a Business Combination.
For the three months ended March 31, 2026, we had a net income of $2,754,571, which consisted of interest earned on cash held in the Trust Account of $3,111,232, offset by general and administrative costs of $356,661.
Liquidity and Capital Resources
Until the consummation of the Initial Public Offering, our only sources of liquidity were from the purchase of our Class B ordinary shares by the Sponsor and loans from the Sponsor.
On October 2, 2025, we consummated the Initial Public Offering of 34,500,000 units, at $10.00 per unit, including 4,500,000 units issued as a result of the full exercise by the underwriters of their over-allotment option, generating gross proceeds of $345,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of an aggregate of 10,650,000 Private Placement Warrants, including 900,000 Private Placement Warrants issued as a result of the full exercise by the underwriters of their over-allotment option, at a price of $1.00 per Private Placement Warrant, or $10,650,000 in the aggregate, in a private placement to the Sponsor. Of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, $345,000,000, including $13,368,750 (which constitutes the maximum Deferred Discount (as defined below) payable to the underwriters of the Initial Public Offering), was deposited into the Trust Account.
At March 31, 2026, we had cash held in the Trust Account of $351,513,014. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable and deferred underwriting commissions), to complete our initial Business Combination. We may withdraw interest income earned on the funds held in the Trust Account to fund our working capital requirements, subject to an annual limit of 5.0% of the interest earned on the funds held in the Trust Account, or to pay our franchise and income taxes (such amounts in the aggregate, “permitted withdrawals”), if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust Account. We expect the interest earned on the amount in the Trust Account (if any) will be sufficient to fund any permitted withdrawals. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
At March 31, 2026, we had cash of $2,306,574 held outside of the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete our initial Business Combination.
22
For the three months ended March 31, 2026, net cash used in operating activities was $185,068. Net income of $2,754,571 was affected by interest earned on cash of $3,111,232. Changes in operating assets and liabilities provided $171,593 of cash from operating activities.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial Business Combination, we do not expect to seek loans from parties other than the Sponsor, its affiliates or our management team as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating our initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business Combination, either because the transaction requires more cash than is available from the proceeds held in our Trust Account, or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with the Business Combination. If we have not consummated our initial Business Combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial Business Combination, including pursuant to additional forward purchase agreements, non-redemption or backstop agreements we may enter into.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, as of March 31, 2026. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
Administrative Services Agreement
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay our sponsor $20,000 per month for office space, utilities, secretarial support and administrative services and certain legal expenses of the Sponsor or related to its formation.
Underwriting Agreement
The underwriters of the Initial Public Offering have agreed to defer an amount ranging from $0 to $13,368,750 of the total underwriting commissions, which amount will depend on the number of Class A ordinary shares sold as part of the units in the Initial Public Offering that remain outstanding following consummation of the initial Business Combination (the “Deferred Discount”). The Deferred Discount shall be paid to the underwriters from the funds held in the Trust Account upon and concurrently with the consummation of the initial Business Combination; provided, however, that if no initial Business Combination is consummated within the time period provided in the Trust Agreement and the funds held under the Trust Agreement are distributed to the Public Shareholders, (i) the underwriters will forfeit any rights or claims to the Deferred Discount and (ii) the Trustee under the Trust Agreement is authorized to distribute the Deferred Discount to the Public Shareholders on a pro rata basis.
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Critical Accounting Estimates
Critical accounting estimates are those estimates made in accordance with U.S. GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant. We have not identified any critical accounting estimates. However, the preparation of unaudited condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the period reported. Making estimates requires management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could materially differ from those estimates.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based on such evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the quarterly period ended March 31, 2026.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item. For information about our risk factors, see the “Risk Factors” section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Any of the factors described therein could result in a significant or material adverse effect on our business, financial condition and operating results. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business, financial condition and operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Use of Proceeds from the Initial Public Offering
On October 2, 2025, we consummated the Initial Public Offering of 34,500,000 Units, at $10.00 per Unit, including 4,500,000 Units issued as a result of the full exercise by the underwriters of their over-allotment option, generating gross proceeds of $345,000,000. The securities sold in the offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-289938), which became effective on September 30, 2025. There has been no material change in the planned use of proceeds from such use as described in our final prospectus for the Initial Public Offering, which was filed with the SEC on October 2, 2025.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
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Item 6. Exhibits.
| Exhibit No. | Description of Exhibit | |
| 3.1 | Amended and Restated Memorandum and Articles of Association of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 6, 2025). | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1** | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2** | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101* | Interactive Data Files (filed herewith as Exhibit 101). | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith. |
| ** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Exchange Act, nor shall they be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| RICE ACQUISITION CORPORATION 3 | ||
| Date: May 12, 2026 | By: | /s/ J. Kyle Derham |
| Name: | J. Kyle Derham | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: May 12, 2026 | By: | /s/ James Wilmot Rogers |
| Name: | James Wilmot Rogers | |
| Title: | Chief Financial Officer | |
| (Principal Financial Officer and Principal Accounting Officer) | ||
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