OTC:TRXA
T-REX Acquisition Corp.
A distressed SPAC on OTC with negative net income and significant interest expenses awaiting a potential merger target.
Key Metrics
Investment Thesis
Bull Case
Investors might consider TRXA as a speculative high-risk play on an upcoming merger with a profitable operating company that could instantly reverse the current negative financial trajectory. The positive net change in cash of approximately $50k indicates some liquidity management, and the substantial paid-in capital of $8.2M provides a buffer for potential deal costs.
Bear Case
The stock carries extreme downside risk given the deep retained earnings deficit of $9.6M and consistent negative revenue trend from $0.1M in 2023 to zero in subsequent years. High interest expenses consuming nearly half of the operating profit and the lack of recurring revenue streams make sustainable profitability impossible without a successful merger.
About T-REX Acquisition Corp.
T-REX Acquisition Corp. (TRXA) is a Special Purpose Acquisition Company (SPAC) currently listed on the OTC market with minimal operational revenue but significant cash flow activities. The company reports substantial operating losses driven by high interest expenses and negative net income, while maintaining a positive working capital position through financing inflows. Key financial metrics indicate a retained earnings deficit of $9.6M against total assets of $774K, suggesting the entity is in a pre-merger or restructuring phase.
Analysis
Management Discussion
The company's recent financial performance shows a widening net loss of $2.5M, exacerbated by $40k in interest expenses and operating losses that outpaced the modest revenue of $32k. Despite generating positive cash flow from financing activities of $1.2M, the entity continues to burn cash through operations, resulting in a retained earnings deficit that has deepened to nearly $10M over the reporting period.
Industry Overview
The SPAC industry is characterized by high volatility, regulatory pressure to eliminate empty shells within set timeframes, and a focus on delivering tangible business combinations rather than standalone operations. Companies in this sector often face immediate delisting risks if they fail to merge or generate meaningful revenue within the typical 18-24 month lifecycle.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $55.6K | $15.8K | $32.4K |
| Cost of Revenue | $572.2K | $30.3K | $118.6K |
| Gross Profit | $-516.6K | $-14.4K | $-86.2K |
| Operating Expenses | $1.3M | $966.2K | $2.0M |
| Operating Income | $-1.8M | $-980.6K | $-2.1M |
| Stock-Based Comp | — | $338.4K | $222.0K |
| D&A | — | — | $50.7K |
| Depreciation | $494.7K | $14.9K | $33.2K |
| Non-Operating Income | $0 | $-27.0K | $-420.2K |
| Interest Expense | — | $27.0K | $40.1K |
| Pre-Tax Income | $-1.8M | $-1.0M | $-2.5M |
| Income Tax | $0 | $0 | $0 |
| Continuing Ops | $-1.8M | $-1.0M | $-2.5M |
| Discontinued Ops | $3.7M | $0 | $0 |
| Net Income | $1.8M | $-1.0M | $-2.5M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $1.8M | $-1.0M | $-2.5M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $185.5K | $152.2K | $95.6K |
| Cash & Equivalents | $23.9K | — | — |
| Other Current Assets | $161.5K | — | — |
| Long-Term Assets | $167.2K | $0 | $678.8K |
| PP&E (Net) | $14.9K | $0 | $588.4K |
| Other LT Assets | $152.2K | $0 | $90.4K |
| Total Assets | $352.6K | $152.2K | $774.3K |
| Current Liabilities | $629.0K | $1.3M | $1.3M |
| Long-Term Liabilities | $0 | $0 | $504.3K |
| Total Liabilities | $629.0K | $1.3M | $1.8M |
| Shareholders' Equity | $-276.4K | $-1.1M | $-1.1M |
| Paid-In Capital | $5.7M | $5.9M | $8.2M |
| Retained Earnings | $-6.0M | $-7.0M | $-9.6M |
| Total L&E | $352.6K | $152.2K | $774.3K |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $1.8M | $-1.0M | $-2.5M |
| Non-Cash Adjustments | $-2.5M | $367.0K | $1.5M |
| Working Capital Changes | $479.5K | $14.2K | $229.5K |
| Cash from Operations | $-188.2K | $-626.5K | $-763.8K |
| Capital Expenditures | — | $0 | — |
| Cash from Investing | $-88.0K | $0 | $-370.6K |
| Cash from Financing | $300.0K | $602.6K | $1.2M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $23.8K | $-23.9K | $49.7K |
| Beginning Cash | $104 | $23.9K | $36 |
| Ending Cash | $23.9K | $36 | $49.7K |
Frequently Asked Questions
How does T-REX Acquisition Corp. make money?
Primary revenue stream consists of SPAC-related financing activities and potential deal-making fees; secondary segments include holding investments for the upcoming business combination and non-operating financial losses from interest accruals.
What are the main risks for TRXA?
High risk of delisting from OTC markets due to sustained negative financial performance and lack of meaningful revenue; potential failure to identify a suitable merger target within the required timeframe leading to liquidation; significant dilution risks from common share issuances and interest expense burdens; regulatory scrutiny on SPAC structures may impact fundraising capabilities.
What is TRXA's competitive advantage?
Access to capital markets through SPAC structures allowing rapid fundraising without traditional IPO delays; flexibility in selecting high-growth merger targets across various sectors; minimal current operational overhead reducing burn rate before a successful deal closes.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.