Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The words "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "plan," "expect" and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning our future financial and operating results; our business strategy of pursuing the acquisition of an operating entity; future financing initiatives; our intentions, expectations and beliefs regarding a merger, acquisition or other business combination with a viable operating entity; and our ability to comply with evolving legal standards and regulations, particularly concerning requirements for being a public company and United States export regulations.

These forward-looking statements speak only as of the date of this Form 10-Q and are subject to uncertainties, assumptions and business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied in our forward-looking statements.

Forward-looking statements should not be relied upon as predictions of future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q to conform these statements to actual results or to changes in our expectations, except as required by law.

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

Overview

Ridgefield Acquisition Corp. ("we", "us", "our", "Ridgefield" or the "Company") was originally incorporated as a Colorado corporation on October 13, 1983 under the name Ozo Diversified, Inc. On June 23, 2006, the Company filed Articles of Merger with the Secretary of State of the State of Nevada that effected the merger between the Company and a wholly-owned subsidiary formed under the laws of the State of Nevada ("RAC-NV"), pursuant to the Articles of Merger, whereby RAC-NV was the surviving corporation. The merger changed the domicile of the Company from the State of Colorado to the State of Nevada. Furthermore, as a result of the Articles of Merger the Company is authorized to issue 35,000,000 shares of capital stock consisting of 30,000,000 shares of common stock, $.001 par value per share and 5,000,000 shares of preferred stock, $.01 par value per share.

Since July 2000, the Company has suspended all operations, except for necessary administrative matters relating to the timely filing of periodic reports as required by the Securities Exchange Act of 1934. The Company is a "shell company" as defined in Rule 12b-2 of the Exchange Act. Accordingly, during the six months ended June 30, 2022 and 2021 we earned no revenues.

Our principal executive office is located at 3250 Retail Drive, Suite 120-518, Carson City, NV 89706-0686 and the telephone number is (805) 484-8855. Our website address is www.ridgefieldacquisition.com. None of the information on our website is part of this Form 10-Q.



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Acquisition Strategy

Our plan of operation is to arrange for a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity. We have not identified a viable operating entity for a merger, acquisition, business combination or other arrangement, and there can be no assurance that the Company will ever successfully arrange for a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity.

We anticipate that the selection of a business opportunity will be a complex process and will involve a number of risks, because potentially available business opportunities may occur in many different industries and may be in various stages of development. Due in part to economic conditions in a number of geographic areas, rapid technological advances being made in some industries and shortages of available capital, we believe that there are numerous firms seeking either the limited additional capital which the Company will have or the benefits of a publicly traded corporation, or both. The perceived benefits of a publicly traded corporation may include facilitating or improving the terms upon which additional equity financing may be sought, providing liquidity for principal shareholders, creating a means for providing incentive stock options or similar benefits to key employees, and other factors.

In some cases, management of the Company will have the authority to undertake acquisitions without submitting the proposal to the shareholders for their consideration. In some instances, however, the proposed participation in a business opportunity may be submitted to the shareholders for their consideration, either voluntarily by the Board of Directors to seek the shareholders' advice and consent, or because of a requirement of state law to do so.

In seeking to arrange a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity, our objective will be to obtain long-term capital appreciation for the Company's shareholders. There can be no assurance that we will be able to complete any merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity.

The Company may need additional funds in order to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity, although there is no assurance that we will be able to obtain such additional funds, if needed. Even if we are able to obtain additional funds there is no assurance that the Company will be able to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity.

Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles of the United States ("U.S. GAAP") requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. The SEC has defined a company's critical accounting policies as the ones that are most important to the portrayal of the company's financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. A description of our critical accounting policies and judgments used in the preparation of our financial statements was provided in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes in these critical accounting policies since December 31, 2021.



Results of Operations

Revenues

During the six months ended June 30, 2022, and the six months ended June 30, 2021, the Company earned no revenues from operations. Overall, the Company incurred a net loss of $10,528 during the three months ended June 30, 2022 as compared to $8,273 during the three months ended June 30, 2021. During the six months ended June 30, 2022 and the six months ended June 30, 2021, the Company incurred a net loss of $25,346 and $35,177, respectively.

Because the Company's operations are primarily administrative, the fluctuations in net loss relate to decreased interest expense and the timing of general and administrative (G&A) expenses during the period.


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General and Administrative Expenses

G&A expenses consist of professional fees, service charges, office expenses and similar items.

During the three months ended June 30, 2022, the Company incurred G&A expenses of $8,777, an increase of $727 compared to G&A expenses of $8,050 during the three months ended June 30, 2021. During the six months ended June 30, 2022, and the six months ended June 30, 2021, the Company incurred G&A expenses of $22,655 and $27,672, respectively. The increase in the quarter is largely due to timing of services provided, primarily professional fees related to compliance and expenses of maintaining our status as a public company. The reduction year-to-date in 2022 similarly reflects differences in the timing of services provided, but the six months ending June 30, 2021 also includes additional professional fees related to the March 2021 cancellation of the 2016 Loan and related issuance of new shares.

Other Expense

Other expense primarily represents state licenses, filing fees, minimum tax expense and net interest expense.

Other expense increased to $1,751 during the three months ended June 30, 2022, as compared to $223 during the three months ended June 30, 2021. The increase relates to state registration fees that were incurred in the first quarter 2021 versus the second quarter of 2022. During the six months ended June 30, 2022, the Company incurred other expense of $2,691, a decrease of $4,814 compared to other expense of $7,505 during the six months ended June 30, 2021. The decrease relates entirely to interest expense. The Company incurred net interest expense of $5,680 during the six months ended June 30, 2021, and $866 during the six months ended June 30, 2022, primarily as a result of a loan from the President of the Company. The 2016 Loan was cancelled on March 26, 2021 and the 2022 Loan was not initiated until March 23, 2022.

Liquidity and Capital Resources

Cash and cash equivalents consist of cash and money market funds. We did not have any short-term or long-term investments as of June 30, 2022. Cash requirements for working capital and capital expenditures have been funded from cash balances on hand. As of June 30, 2022, we had cash and cash equivalents of $7,808 and working capital of $7,398, excluding the related party debt. With the related party debt, we had a working capital deficit of ($23,468).

Historically, the Company satisfied its working capital needs from related party loans from Steven N. Bronson, the Chairman, President, CEO, and majority shareholder. On December 31, 2016, Mr. Bronson entered into a revolving loan agreement (the "2016 Loan") whereby Mr. Bronson would loan the Company money from time-to-time to fund working capital needs to pay operating expenses. The 2016 Loan was unsecured, repayable upon demand and accrued interest at the rate of 10% per annum.

On March 26, 2021, the Company sold 1,600,000 shares of its Common Stock to Mr. Bronson at a price of $0.25 per share, for an aggregate purchase price of $400,000. Mr. Bronson paid the purchase price for the shares by cancelling $349,442 in principal and accrued interest outstanding under the 2016 Loan and paying $50,558 in cash.

On March 23, 2022, Mr. Bronson entered into a new revolving loan agreement (the "2022 Loan") whereby Mr. Bronson would loan the Company money from time-to-time to fund working capital needs to pay operating expenses. The 2022 Loan is unsecured, repayable upon demand and accrues interest at the rate of 8% per annum.



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During the six months ended June 30, 2021, and June 30, 2022, the following amounts were payable under all loans:



                                                  Principal      Interest
Balance January 1, 2021                          $   251,161    $   87,624

Additions                                              5,000         5,657
Cash Payments                                              -             -
Conversion into Common Stock - March 26, 2021      (256,161)      (93,281)
Balance March 31, 2021                           $         -    $        -

Additions                                                  -             -
Cash Payments                                              -             -
Balance June 30, 2021                            $         -    $        -

Balance January 1, 2022                          $         -    $        -

Additions                                             20,000            40
Cash Payments                                              -             -
Balance March 31, 2022                           $    20,000    $       40

Additions                                             10,000           826
Cash Payments                                              -             -
Balance June 30, 2021                            $    30,000    $      866

While the cash received from the 2022 Loan will satisfy the Company's immediate financial needs, it will not by itself have the capacity to provide the Company with sufficient capital to finance a merger, acquisition or business combination between the Company and a viable operating entity. The Company may need additional funds in order to complete a merger, acquisition or business combination between the Company and a viable operating entity. There can be no assurances that the Company will be able to obtain additional funds if and when needed.

Economy and Inflation

Many leading economists predict high rates of inflation will continue through 2022. While we do not believe inflation has had a material effect on our Company's results of operations, inflation generally interferes with the provision of investment capital. A prolonged period of high inflation may impact our ability to carry out our acquisition strategy. On the other hand, when business conditions worsen and the stock market corrects, it may be easier for us to identify an acquisition candidate.

In late 2019, there was an outbreak of a new strain of coronavirus (COVID) first identified in Wuhan, Hubei Province, China, which has since spread globally. More recently, more contagious variants of COVID, such as the Delta and Omicron variants, have emerged and spread globally, which has caused some governments to implement various measures, or impose restrictions, in an effort to lessen the spread of COVID and its variants. While we do not expect COVID to impact our operations, it could impact our acquisition strategy, positively or negatively.

The extent to which new opportunities are presented to us will depend on future developments, which remain highly uncertain and cannot be predicted with confidence.

Off-Balance Sheet and Contractual Arrangements

Our liquidity is not dependent on the use of off-balance-sheet financing arrangements.

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