FACT · FACT II Acquisition Corp

Performance Summary

For the fiscal year ended December 31, 2025, FACT II Acquisition Corp. Unit reported net income of $5,017,538. This represents a substantial positive swing from the net loss of $71,891 reported for the period from inception (June 19, 2024) through December 31, 2024. The company has generated no operating revenues. The FY 2025 net income was primarily composed of $7,188,186 in interest income earned on cash held in the Trust Account, $27,824 in interest earned on a bank account, and a $26,558 change in the fair value of an over-allotment liability. These items were offset by general and administrative expenses of $2,225,030, resulting in a loss from operations of $2.2 million. The company's activities remain limited to organizational tasks, preparing for its IPO, and pursuing an initial business combination.

Revenue Analysis

The company is a blank check company (Special Purpose Acquisition Company) with the business purpose of effecting a merger or similar business combination. As explicitly stated in the filing, 'We have generated no revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination, at the earliest.' Therefore, there is no revenue, segment breakdown, or geographic mix to analyze. All income reported is non-operating, derived from interest earned on funds held in trust and bank accounts.

Margins & Profitability

Given the absence of revenue, traditional margin calculations (gross margin, operating margin) are not applicable. The company's profitability for the period is solely a function of its non-operating interest income exceeding its operating expenses. The key expense driver is general and administrative costs, which totaled $2.2 million for FY 2025. The net income of $5.0 million demonstrates that interest income from the substantial trust balance ($183.8 million) is currently sufficient to cover public company operating costs and generate a profit, though this is not the company's operational objective.

Cash Flow & Balance Sheet

As of December 31, 2025, the company held total assets of $184.4 million, of which $183.8 million was cash held in a Trust Account. Remaining operating cash was $545,000. Total liabilities were $9.2 million, including a $7.0 million deferred underwriting fee payable. Shareholders' deficit was $8.5 million. For the year, net cash used in operating activities was $903,130. Net cash used in investing activities was $175.9 million, related to the investment of cash into the Trust Account. Net cash provided by financing activities was $177.6 million, primarily from the IPO and private placement proceeds. The company states it intends to use substantially all funds in the Trust Account to complete an initial business combination.

Outlook

The company's future is entirely contingent on the completion of its initial business combination. It has entered into a definitive Business Combination Agreement with Precision Aerospace & Defense Group, Inc. (PAD), with a termination date of March 31, 2026, if the closing has not occurred. The company has up to 24 months from its IPO closing (November 27, 2024) to consummate a business combination, setting a mandatory liquidation date of May 27, 2026. The filing raises substantial doubt about the company's ability to continue as a going concern should the business combination not be completed by this date. Strategic priorities are focused on satisfying the conditions to close the PAD transaction, which requires shareholder approval, regulatory clearances, and a minimum of $75 million in cash proceeds from the trust and other sources post-redemptions.