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,” “intend,” “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 June 30, 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 June 30, 2026, we had a net income of $2,833,068, which consisted of interest earned on cash held in the Trust Account of $3,136,181, offset by general and administrative costs of $303,113.
For the six months ended June 30, 2026, we had a net income of $5,587,639, which consisted of interest earned on cash held in the Trust Account of $6,247,413, offset by general and administrative costs of $659,774.
For the period from June 6, 2025 (inception) through June 30, 2025, we had a net loss of $24,945, which consisted of general and administrative costs.
Liquidity and Capital Resources
Until the consummation of the Initial Public Offering, our only sources of liquidity were proceeds 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 June 30, 2026, we had cash held in the Trust Account of $354,649,195. 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.
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At June 30, 2026, we had cash of $2,224,033 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.
For the six months ended June 30, 2026, net cash used in operating activities was $267,609. Net income of $5,587,639 was affected by interest earned on cash of $6,247,413. Changes in operating assets and liabilities provided $392,165 of cash from operating activities.
For the period from June 6, 2025 (inception) through June 30, 2025, there was no cash used in operating activities. Net loss of $24,945 was affected by payment of operation costs through a promissory note of $10,420. Changes in operating assets and liabilities provided $14,525 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 is 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 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 that would be considered off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, as of June 30, 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.
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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.
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 judgment. 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.
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