FACT II Acquisition Swings to Profit on Trust Account Interest

Ticker: FACTW · Form: 10-Q · Filed: Nov 12, 2025 · CIK: 2028935

Sentiment: mixed

Topics: SPAC, Blank Check Company, 10-Q Filing, Financial Performance, Trust Account, Business Combination, IPO Proceeds, Shareholder Redemption, Investment Risk

Related Tickers: FACTU, FACT

TL;DR

**FACTW is making money on interest, but the clock is ticking for a deal or it's just a cash return.**

AI Summary

FACT II Acquisition Corp. (FACTW) reported a net income of $1,266,719 for the three months ended September 30, 2025, a significant improvement from a net loss of $104,287 in the same period of 2024. For the nine months ended September 30, 2025, the company posted a net income of $4,346,140, compared to a net loss of $104,287 from inception (June 19, 2024) through September 30, 2024. This positive shift is primarily driven by substantial interest earned on cash held in its Trust Account, totaling $1,860,392 for the quarter and $5,465,237 year-to-date. General and administrative expenses increased to $602,250 for the quarter, up from $104,287 in the prior year. The company's total assets stood at $183,190,923 as of September 30, 2025, with $182,062,506 held in the Trust Account. Liabilities include $7,000,000 in deferred underwriting fees and $1,524,583 in deferred legal fees. The company, a blank check entity, has not yet commenced operations and is actively seeking a business combination, with $175,875,000 initially placed in the Trust Account following its IPO on November 27, 2024.

Why It Matters

For investors, this 10-Q highlights FACT II Acquisition Corp.'s ability to generate significant non-operating income from its Trust Account, providing a stable base while it searches for a target. The increase in net income to $4.3 million year-to-date demonstrates prudent management of IPO proceeds. However, the core value proposition remains tied to a successful business combination, which has yet to materialize. The competitive SPAC landscape means FACT II must find an attractive target within its 18-24 month timeframe, or shareholders face redemption at a per-share price that may be less than the initial $10.05. Employees and customers of a future target company will be directly impacted by the success or failure of this SPAC's acquisition strategy.

Risk Assessment

Risk Level: medium — The company is a blank check company with no operations, meaning its success hinges entirely on completing a Business Combination within 18-24 months of its November 27, 2024 IPO. While it has $182,062,506 in its Trust Account, there is no assurance a suitable target will be found, and failure to do so would lead to liquidation, returning funds to shareholders but extinguishing their equity rights. The deferred underwriting fee of $7,000,000 and deferred legal fees of $1,524,583 represent significant liabilities that could impact the final redemption value if a deal isn't struck.

Analyst Insight

Investors should monitor FACTW closely for any announcements regarding a potential business combination. Given the current interest income, holding shares offers a modest return, but the primary investment thesis is the acquisition. If no viable target emerges as the deadline approaches, consider exiting to avoid potential liquidation scenarios, though the redemption value of approximately $10.40 per share as of September 30, 2025, provides a floor.

Financial Highlights

debt To Equity
-0.87
revenue
$0
operating Margin
N/A
total Assets
$183.19M
total Debt
$8.60M
net Income
$4.35M
eps
$0.18
gross Margin
N/A
cash Position
$1.01M
revenue Growth
N/A

Key Numbers

Key Players & Entities

FAQ

What is FACT II Acquisition Corp.'s net income for the nine months ended September 30, 2025?

FACT II Acquisition Corp. reported a net income of $4,346,140 for the nine months ended September 30, 2025. This is a significant improvement compared to a net loss of $104,287 for the period from inception (June 19, 2024) through September 30, 2024.

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

As of September 30, 2025, FACT II Acquisition Corp. held $182,062,506 in its Trust Account. This amount has increased from $176,597,270 at December 31, 2024, primarily due to interest earned.

What is the primary source of income for FACT II Acquisition Corp.?

The primary source of income for FACT II Acquisition Corp. is interest earned on cash held in its Trust Account. For the nine months ended September 30, 2025, the company earned $5,465,237 in interest from this account.

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 is executed within 18 months, to complete a Business Combination.

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

Key liabilities for FACT II Acquisition Corp. include a deferred underwriting fee payable of $7,000,000 and deferred legal fees of $1,524,583 as of September 30, 2025.

What happens if FACT II Acquisition Corp. fails to complete a Business Combination?

If FACT II Acquisition Corp. fails to complete a Business Combination within the Extension Period, it will redeem 100% of its outstanding Public Shares at a per-share price equal to the aggregate amount in the Trust Account, including interest (less up to $100,000 for dissolution expenses and net of taxes payable).

What was the redemption value per Class A ordinary share for FACT II Acquisition Corp. as of September 30, 2025?

The approximate redemption value for Class A ordinary shares subject to possible redemption was $10.40 per share as of September 30, 2025. This is an increase from $10.09 per share at December 31, 2024.

How many Class A ordinary shares are issued and outstanding for FACT II Acquisition Corp.?

As of November 10, 2025, there were 18,488,125 Class A ordinary shares, $0.0001 par value, issued and outstanding. This excludes the 17,500,000 shares subject to possible redemption.

What is FACT II Acquisition Corp.'s business strategy?

FACT II Acquisition Corp. is a blank check company formed to effect a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. It is not limited to a particular industry or geographic region.

Did FACT II Acquisition Corp. have any operating revenues for the period ended September 30, 2025?

No, FACT II Acquisition Corp. did not generate any operating revenues for the period ended September 30, 2025. The company will not generate operating revenues until after the completion of a Business Combination, at the earliest.

Risk Factors

Industry Context

The SPAC market, while having seen significant activity, is subject to evolving regulatory scrutiny and investor sentiment. Companies like FACT II Acquisition Corp. operate in a highly competitive landscape where identifying attractive acquisition targets within a limited timeframe is crucial. The success of a SPAC is intrinsically linked to the quality of its target and the execution of the business combination.

Regulatory Implications

SPACs face increasing regulatory oversight, particularly concerning disclosures, sponsor compensation, and the fairness of business combinations. Compliance with SEC regulations and exchange listing rules is paramount. Any changes in these regulations could impact the structure and feasibility of SPAC transactions.

What Investors Should Do

  1. Monitor the progress of the business combination search: Investors should closely track management's efforts to identify and negotiate a suitable acquisition target, as this is the primary value driver for the SPAC.
  2. Evaluate the terms of any proposed business combination: Scrutinize the deal structure, valuation, and potential synergies of any target company to assess the long-term viability and potential returns.
  3. Understand redemption implications: Be aware of the redemption rights associated with Class A shares and how a high redemption rate could affect the capital available for the acquisition and the post-merger entity's financial health.
  4. Assess the impact of deferred fees: Consider the significant deferred underwriting and legal fees ($8.52M total) that will be payable upon a successful business combination and their potential dilutionary effect.

Key Dates

Glossary

Blank Check Entity
A company formed with the sole purpose of raising capital through an IPO to acquire an existing company, often referred to as a Special Purpose Acquisition Company (SPAC). (FACT II Acquisition Corp. is a blank check entity, meaning its financial performance and future depend entirely on its ability to find and complete a business combination.)
Trust Account
A segregated account, typically holding proceeds from an IPO, used by SPACs to safeguard investor funds until a business combination is completed or the SPAC liquidates. (The substantial interest earned on the $182.06M held in the Trust Account is the primary driver of FACT II's current net income.)
Deferred Underwriting Fee
Fees owed to underwriters that are not paid at the time of the IPO but are contingent upon the successful completion of a business combination. (Represents a significant liability of $7,000,000 that will be due upon a successful merger, impacting the economics of the transaction.)
Class A Ordinary Shares Subject to Possible Redemption
Shares issued in the IPO that holders can redeem for their pro-rata share of the Trust Account if they choose not to participate in the business combination. (The value and potential redemption of these shares ($182,062,506 as of Sept 30, 2025) are critical to the SPAC's capital structure and the funds available for an acquisition.)
Accumulated Deficit
The cumulative net losses of a company since its inception, offset by any net income. (FACT II has an accumulated deficit of $7,473,211 as of September 30, 2025, reflecting its operational expenses prior to generating significant interest income.)

Year-Over-Year Comparison

Compared to the prior year period (inception through September 30, 2024), FACT II Acquisition Corp. has transitioned from a net loss of $104,287 to a net income of $4,346,140 for the nine months ended September 30, 2025. This dramatic shift is primarily due to substantial interest income earned on its Trust Account, which grew from $176.60M to $182.06M. While general and administrative expenses increased significantly from $104,287 to $1,166,153, the interest income more than offset these costs. The company's total assets also saw an increase from $178.22M to $183.19M, largely driven by the growth in the Trust Account.

Filing Stats: 4,697 words · 19 min read · ~16 pages · Grade level 18.8 · Accepted 2025-11-12 16:06:16

Key Financial Figures

Filing Documents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. FACT II ACQUISITION CORP. CONDENSED BALANCE SHEETS September 30, 2025 December 31, (Unaudited) 2024 ASSETS Current assets Cash $ 1,007,626 $ 1,447,921 Prepaid expenses 107,333 95,833 Total current assets 1,114,959 1,543,754 Prepaid insurance 13,458 77,208 Cash held in Trust Account 182,062,506 176,597,270 TOTAL ASSETS $ 183,190,923 $ 178,218,232 LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS' DEFICIT Current liabilities Accrued expenses $ 76,363 $ 97,837 Over-allotment option liability — 26,558 Total current liabilities 76,363 124,395 Deferred legal fees 1,524,583 850,000 Deferred underwriting fee payable 7,000,000 7,000,000 TOTAL LIABILITIES 8,600,946 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 $ 10.40 and $ 10.09 per share at September 30, 2025 and December 31, 2024, respectively 182,062,506 176,597,270 SHAREHOLDERS' DEFICIT Preference shares, $ 0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at September 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 September 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 September 30, 2025 and December 31, 2024, respectively 583 671 Additional paid-in capital — — Accumulated deficit ( 7,473,211 ) ( 6,354,203 ) TOTAL SHAREHOLDERS' DEFICIT ( 7,472,529 ) ( 6,353,433 ) TOTAL LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS' DEFICIT $ 183,190,923 $ 178,218,232 The accompanying notes are an integral part of the unaudited condense

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