FACT II Acquisition Posts $3.08M Net Income from Trust Account Interest

Ticker: FACTW · Form: 10-Q · Filed: Aug 13, 2025 · CIK: 2028935

Sentiment: neutral

Topics: SPAC, Blank Check Company, 10-Q Filing, Trust Account, Business Combination, Redemption Value, Financial Performance

Related Tickers: FACTU, FACT

TL;DR

**FACTW is a cash-rich SPAC earning interest, but without a deal, it's just a ticking clock to liquidation.**

AI Summary

FACT II Acquisition Corp. (FACTW) reported a net income of $1,631,524 for the three months ended June 30, 2025, and $3,079,421 for the six months ended June 30, 2025. This income is primarily driven by interest earned on cash held in its Trust Account, totaling $1,819,161 for the quarter and $3,604,845 for the six-month period. The company, a blank check company, has not commenced any operating activities and generates no operating revenue, focusing solely on identifying a Business Combination. General and administrative expenses were $199,558 for the quarter and $563,903 for the six months. Cash held in the Trust Account increased to $180,202,115 as of June 30, 2025, from $176,597,270 at December 31, 2024. Total assets stood at $181,457,121, with total liabilities of $8,133,863, including a $7,000,000 deferred underwriting fee. The company faces the risk of not completing a Business Combination within its 18-month (or 24-month extended) period, which would trigger a liquidation and redemption of public shares at approximately $10.30 per share.

Why It Matters

For investors, FACT II Acquisition Corp.'s continued reliance on Trust Account interest for its entire net income highlights its pre-operational SPAC status. The increase in cash held in the Trust Account to $180.2 million provides a stable redemption value for public shareholders, currently around $10.30 per share, offering a floor for investment. However, the lack of a definitive Business Combination target introduces significant uncertainty and competitive pressure in the crowded SPAC market. Employees and customers are not directly impacted yet, as the company has no operations, but the eventual success or failure of a merger will determine future employment and market presence.

Risk Assessment

Risk Level: high — The company is a blank check company with no operations and generates no operating revenue, as stated in Note 1. Its sole purpose is to complete a Business Combination within 18-24 months of its November 27, 2024 IPO. Failure to do so will result in liquidation and redemption of public shares, as detailed in Note 1, posing a significant risk to investors seeking growth beyond the redemption value.

Analyst Insight

Investors should monitor FACTW closely for any announcements regarding a potential Business Combination. Given its current status as a pre-operational SPAC, the primary investment thesis revolves around the successful identification and execution of a merger. If no viable target emerges, consider exiting before the liquidation deadline to capture the redemption value, which is currently around $10.30 per share.

Financial Highlights

debt To Equity
N/A
revenue
$0
operating Margin
N/A
total Assets
$181,457,121
total Debt
$8,133,863
net Income
$3,079,421
eps
$0.13
gross Margin
N/A
cash Position
$1,088,465
revenue Growth
N/A

Revenue Breakdown

SegmentRevenueGrowth
Interest Income - Trust Account$3,604,845N/A
Interest Income - Bank Account$11,921N/A

Key Numbers

Key Players & Entities

FAQ

What is FACT II Acquisition Corp.'s primary source of income?

FACT II Acquisition Corp.'s primary source of income is interest earned on cash held in its Trust Account. For the six months ended June 30, 2025, the company reported $3,604,845 in interest earned on cash held in the Trust Account, contributing to its net income of $3,079,421.

Has FACT II Acquisition Corp. completed a Business Combination?

No, as of June 30, 2025, FACT II Acquisition Corp. had not commenced any operations and had not completed a Business Combination. The company is still actively searching for a suitable target business.

What is the redemption value for FACT II Acquisition Corp. Class A ordinary shares?

As of June 30, 2025, the redemption value for FACT II Acquisition Corp. Class A ordinary shares was approximately $10.30 per share. This value is based on the aggregate amount in the Trust Account divided by the number of outstanding public shares.

What happens if FACT II Acquisition Corp. does not complete a Business Combination?

If FACT II Acquisition Corp. is unable to complete a Business Combination within 18 months (or 24 months with an extension) from its IPO closing, it will cease operations, redeem 100% of its outstanding Public Shares at a per-share price equal to the Trust Account balance (less taxes and dissolution expenses), and then liquidate and dissolve.

How much cash does FACT II Acquisition Corp. hold in its Trust Account?

As of June 30, 2025, FACT II Acquisition Corp. held $180,202,115 in its Trust Account. This amount increased from $176,597,270 at December 31, 2024, due to interest accretion.

What are the key liabilities for FACT II Acquisition Corp.?

Key liabilities for FACT II Acquisition Corp. include accrued expenses of $83,863, deferred legal fees of $1,050,000, and a significant deferred underwriting fee payable of $7,000,000 as of June 30, 2025. Total liabilities amounted to $8,133,863.

When was FACT II Acquisition Corp. incorporated and when did its IPO occur?

FACT II Acquisition Corp. was incorporated on June 19, 2024, as a Cayman Islands exempted company. Its Initial Public Offering (IPO) was consummated on November 27, 2024.

Who are the key participants in FACT II Acquisition Corp.'s private placement?

The key participants in FACT II Acquisition Corp.'s private placement included the Sponsor (FACT II Acquisition Parent LLC), Sponsor HoldCo (FACT II Acquisition LLC), Cohen & Company Capital Markets, and Seaport Global Securities LLC, collectively purchasing 663,125 private placement units for $6,631,250.

What is the deadline for FACT II Acquisition Corp. to complete a Business Combination?

FACT II Acquisition Corp. has until 18 months from the closing of its IPO (November 27, 2024), or 24 months if a definitive agreement for an initial Business Combination is executed within the initial 18 months, to complete a Business Combination.

What is the role of the Sponsor in FACT II Acquisition Corp.'s operations?

The Sponsor, FACT II Acquisition Parent LLC, holds founder shares and purchased private placement securities. It has agreed to vote its shares in favor of a Business Combination and waive redemption rights, and also bears liability for certain third-party claims that might reduce funds in the Trust Account below the redemption value.

Risk Factors

Industry Context

The SPAC market has experienced significant volatility, with increased regulatory scrutiny following a period of rapid growth. While SPACs offer a faster route to public markets compared to traditional IPOs, they face challenges in identifying suitable targets, negotiating favorable terms, and navigating potential shareholder redemptions. The current environment demands robust due diligence and a clear value proposition for target companies.

Regulatory Implications

FACT II Acquisition Corp. operates within the evolving regulatory landscape for SPACs. Potential changes in SEC rules regarding disclosures, SPAC structures, or de-SPAC transactions could impact the company's ability to execute a business combination or the terms of such a transaction.

What Investors Should Do

  1. Monitor Business Combination Progress
  2. Evaluate Redemption Value vs. Potential Target
  3. Assess Management's Execution Capability

Key Dates

Glossary

SPAC
Special Purpose Acquisition Company. A shell company that is formed to raise capital through an initial public offering (IPO) for the purpose of acquiring or merging with an existing company. (FACT II Acquisition Corp. is a SPAC, and its financial performance and risks are directly tied to its nature as a blank check company.)
Trust Account
An account established by a SPAC to hold the proceeds from its IPO. These funds are typically invested in U.S. Treasury securities or money market funds and are used to fund the business combination or returned to shareholders upon liquidation. (The interest earned on the Trust Account is the sole source of income for FACT II Acquisition Corp., as detailed in its financial statements.)
Business Combination
The acquisition or merger of a SPAC with an operating company. This is the primary objective of a SPAC. (The completion of a business combination is critical for FACT II Acquisition Corp.'s survival and success; failure to do so leads to liquidation.)
Redemption Value
The amount per share that public shareholders receive if they choose to redeem their shares, typically at the IPO price plus accrued interest, less any taxes or expenses. (The redemption value per share for FACT II Acquisition Corp. has increased to approximately $10.30, reflecting interest earned on the Trust Account.)
Deferred Underwriting Fee
A fee owed to the underwriters of a SPAC's IPO, typically paid upon the successful completion of a business combination. (FACT II Acquisition Corp. has a $7,000,000 deferred underwriting fee, which is a significant liability contingent on a business combination.)
Accumulated Deficit
The cumulative net losses of a company since its inception, offset by any net income. (FACT II Acquisition Corp. has an accumulated deficit of $6,879,539 as of June 30, 2025, reflecting expenses incurred without generating operating revenue.)

Year-Over-Year Comparison

Compared to the prior period (likely year-end 2024), FACT II Acquisition Corp. shows an increase in net income from $0 to $3,079,421 for the six-month period, driven entirely by higher interest income on its Trust Account. Total assets have grown to $181,457,121 from $178,218,232, primarily due to the increase in the Trust Account balance. Liabilities have slightly increased from $7,974,395 to $8,133,863, mainly due to a rise in deferred legal fees. No significant new risks have been introduced, but the existing risks related to completing a business combination remain paramount.

Filing Stats: 4,713 words · 19 min read · ~16 pages · Grade level 18.4 · Accepted 2025-08-13 16:07:33

Key Financial Figures

Filing Documents

Financial Information

Part I. Financial Information

Financial Statements

Item 1. Financial Statements 1 Condensed Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024 1 Condensed Statements of Operations for the Three and Six Months Ended June 30, 2025 and for the period from June 19, 2024 (inception) through June 30, 2024 (Unaudited) 2 Condensed Statements of Changes in Shareholders' Deficit for the Three and Six Months Ended June 30, 2025 and for the period from June 19, 2024 (inception) through June 30, 2024 (Unaudited) 3 Condensed Statements of Cash Flows for the Six Months Ended June 30, 2025 and for the period from June 19, 2024 (inception) through June 30, 2024 (Unaudited) 4 Notes to Condensed Financial Statements (Unaudited) 5

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 16

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 18

Controls and Procedures

Item 4. Controls and Procedures 18

Other Information

Part II. Other Information

Legal Proceedings

Item 1. Legal Proceedings 19

Risk Factors

Item 1A. Risk Factors 19

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 19

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 19

Other Information

Item 5. Other Information 19

Exhibits

Item 6. Exhibits 20

Signatures

Part III. Signatures 21 i

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. FACT II ACQUISITION CORP. CONDENSED BALANCE SHEETS June 30, 2025 December 31, (Unaudited) 2024 ASSETS Current assets Cash $ 1,088,465 $ 1,447,921 Prepaid expenses 131,833 95,833 Total current assets 1,220,298 1,543,754 Prepaid insurance 34,708 77,208 Cash held in Trust Account 180,202,115 176,597,270 TOTAL ASSETS $ 181,457,121 $ 178,218,232 LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS' DEFICIT Current liabilities Accrued expenses $ 83,863 $ 97,837 Over-allotment option liability 26,558 Total current liabilities 83,863 124,395 Deferred legal fees 1,050,000 850,000 Deferred underwriting fee payable 7,000,000 7,000,000 TOTAL LIABILITIES 8,133,863 7,974,395 COMMITMENTS AND CONTINGENCIES (Note 6) Class A ordinary shares subject to possible redemption, 17,500,000 shares at redemption value of approximately $ 10.30 and $ 10.09 per share at June 30, 2025 and December 31, 2024, respectively 180,202,115 176,597,270 SHAREHOLDERS' DEFICIT Preference shares, $ 0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at June 30, 2025 and December 31, 2024 — — Class A ordinary shares, $ 0.0001 par value; 200,000,000 shares authorized; 988,125 issued and outstanding at June 30, 2025 and December 31, 2024 (excluding 17,500,000 shares subject to possible redemption) 99 99 Class B ordinary shares, $ 0.0001 par value; 20,000,000 shares authorized; 5,833,333 and 6,708,333 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively 583 671 Additional paid-in capital — — Accumulated deficit ( 6,879,539 ) ( 6,354,203 ) TOTAL SHAREHOLDERS' DEFICIT ( 6,878,857 ) ( 6,353,433 ) TOTAL LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS' DEFICIT $ 181,457,121 $ 178,218,232 The accompanying notes are an integral part of the unaudited condensed financial statements. 1

View Full Filing

View this 10-Q filing on SEC EDGAR

View on Read The Filing