Rithm Acquisition Corp. (RITM) Faces NYSE Compliance Challenge

Rithm Acquisition Corp. (NYSE: RITM), a Special Purpose Acquisition Company (SPAC), recently encountered a significant challenge. This summary breaks down the key details of a compliance issue that could impact its future.

Event Description: The Core Issue: Insufficient Public Shareholders

Rithm Acquisition Corp. recently announced a compliance issue: it received a notice from the New York Stock Exchange (NYSE) regarding insufficient public shareholders. The NYSE requires companies listed on its exchange to continuously maintain a minimum of 300 public stockholders. A "public stockholder" generally refers to an investor who is not an officer, director, or a 10% or greater owner of the company. Rithm currently falls below this critical threshold.

Event Date/Timeline: When This Happened

Rithm received this official notice from the NYSE on January 26, 2026. The company publicly announced this through a press release on January 30, 2026.

Impact Assessment: Why This Matters for a SPAC

Rithm Acquisition Corp. formed as a SPAC, meaning its primary goal is to raise capital and then find a private company to merge with, thereby taking that company public. An affiliate of Rithm Capital Corp. sponsors the company, which typically targets financial services, real estate, and digital infrastructure sectors.

This notice presents a significant concern for several reasons:

• Threat to Listing: If Rithm cannot resolve this issue, the NYSE could delist its stock. Delisting means investors would no longer trade shares on a major exchange, making them much harder to buy and sell. This could relegate shares to less liquid over-the-counter (OTC) markets.
• Impact on Merger Prospects: For a SPAC, a strong public listing is crucial for attracting target companies and completing successful business combinations. A compliance issue like this could deter potential merger partners and complicate future transactions.
• Reputation and Fundraising: Delisting, or even the threat of it, can damage Rithm's reputation and make it harder to raise additional capital or complete its de-SPAC transaction.
• Uncertainty for Investors: While Rithm has not specified the exact reason for the decline in public shareholders, factors could include investor redemptions, share consolidation among a few large holders, or a lack of new retail interest. This uncertainty adds risk for current and prospective investors.

Financial Impact

The NYSE notice does not immediately affect Rithm's operations or financial condition. However, failing to regain compliance and potential delisting could significantly impact the company's ability to complete a business combination, raise capital, and maintain share liquidity. These outcomes would carry material financial implications. Rithm anticipates incurring costs to develop and implement its compliance plan, though the company didn't provide specific financial figures or direct costs for this plan in their filing.

Key Takeaways for Investors

What Happens Next: The Compliance Process

While not an immediate delisting, this notice initiates a formal process with strict deadlines:

• Plan Submission: Rithm has 45 days from receiving the notice (meaning by March 12, 2026) to submit a detailed plan to the NYSE. The plan must outline how Rithm intends to regain compliance and increase its public shareholder count to at least 300.
• NYSE Review: The NYSE will then take 45 days to review Rithm's proposed plan, assessing if it is reasonable and achievable.
• Compliance Period: If the NYSE approves the plan, it will grant Rithm an 18-month period (starting from January 26, 2026) to execute its plan and regain full compliance. During this time, Rithm's stock (RITM) will continue to trade on the NYSE, provided Rithm adheres to other listing rules and satisfies the NYSE with its progress.
• Potential Delisting: If the NYSE does not approve Rithm's plan, or if Rithm fails to meet the requirements within the 18-month period, the NYSE could initiate procedures to suspend trading and delist its stock.

Key Risks and What Investors Should Watch For

For investors in Rithm Acquisition Corp., this is a critical period. Here's what to consider:

• Delisting Risk: The most significant risk is that Rithm fails to regain compliance, leading to delisting. This would severely impact the liquidity and potentially the value of your investment.
• Liquidity and Volatility: News of compliance issues often leads to increased stock price volatility and potentially reduced trading liquidity as the market reacts to uncertainty.
• Impact on SPAC Timeline: If Rithm is still seeking a merger target, this issue could complicate or delay completing a business combination within its mandated timeframe. Failure to complete a merger typically results in the SPAC liquidating and returning funds to shareholders, often at or near the initial trust value, but without the potential upside of a successful merger.

What to Watch For:

• Rithm's Compliance Plan: Pay close attention to the details of the plan Rithm submits to the NYSE. How does Rithm propose to increase its public shareholder count? Potential strategies could include a mini-tender offer, a stock split (though this doesn't directly increase unique shareholders), or other initiatives to encourage broader ownership.
• NYSE Decision: The NYSE's approval or rejection of Rithm's plan will be a key indicator of the company's path forward.
• Updates on Merger Activity: Any news regarding a potential business combination will be crucial, as a successful merger could potentially attract new investors and help resolve the compliance issue.

This situation demands close monitoring. Investors should stay informed through Rithm's official announcements and SEC filings.