FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2025

Press release · 2025-05-14 18:50

Fact II Acquisition Corp. filed its quarterly report for the period ended March 31, 2025, reporting a net loss of $1.4 million for the three months ended March 31, 2025. As of March 31, 2025, the company had cash and cash equivalents of $14.4 million and a total shareholders’ deficit of $14.1 million. The company’s condensed balance sheet as of March 31, 2025, showed total assets of $14.4 million and total liabilities of $28.5 million. The company’s management’s discussion and analysis of financial condition and results of operations highlights the company’s focus on identifying and acquiring a target business, and notes that the company has not yet generated any revenue. The report also includes notes to the condensed financial statements, which provide additional information about the company’s financial position and results of operations.

Overview

We are a blank check company formed in June 2024 for the purpose of completing a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. We intend to use the cash from our initial public offering (IPO) and private placement, as well as debt or a combination of cash, shares, and debt, to fund our initial business combination.

We have not engaged in any operations or generated any revenue yet. Our activities so far have been focused on organizational tasks, preparing for the IPO, and identifying a target company for our initial business combination. We expect to continue incurring significant costs in pursuit of a business combination, but we cannot guarantee that our plans will be successful.

Results of Operations

For the three months ended March 31, 2025, we had net income of $1,447,897. This consisted of:

Interest income of $1,785,684 on cash held in the trust account established with IPO proceeds
Change in fair value of overallotment liability of $26,558
Operating costs of $364,345

We do not expect to generate any operating revenue until after completing our initial business combination.

Liquidity and Capital Resources

Prior to the IPO, our liquidity needs were satisfied through a $25,000 contribution from our sponsor for the founder shares.

We completed our IPO of 17,500,000 units at $10 per unit, raising $175 million in gross proceeds. Concurrently, we sold 663,125 private placement units at $10 per unit, raising an additional $6.6 million.

After transaction costs of $11 million, we placed $175.9 million in a trust account. As of March 31, 2025, we had $178.4 million in the trust account and $1.2 million in our operating bank account.

We intend to use the trust account funds to complete our initial business combination. The operating account funds will be used for identifying and evaluating target businesses, due diligence, and negotiating the business combination.

We believe we have sufficient funds to meet our current expenditures, but may need to raise additional financing to complete the business combination or if we are required to redeem a significant number of public shares.

Off-Balance Sheet Arrangements and Contractual Obligations

We have no off-balance sheet arrangements or long-term debt, capital leases, or other long-term liabilities.

The underwriters had a 45-day option to purchase up to an additional 2,625,000 units, which expired unexercised. The underwriters are entitled to a 2% cash underwriting discount and a 4% deferred underwriting fee payable upon completion of the initial business combination.

Critical Accounting Estimates and Recent Accounting Standards

As of March 31, 2025, we did not have any critical accounting estimates. Management does not believe any recently issued but not yet effective accounting standards would have a material effect on our financial statements.