FACT II Acquisition Corp. 10-Q Summary
Business Context and Reporting Period
FACT II Acquisition Corp. is a Cayman Islands exempted company incorporated on June 19, 2024, operating as a blank check company (SPAC) formed to effect a business combination. This Form 10-Q covers the quarterly period ended September 30, 2024, and the period from inception through that date. As of the balance sheet date, the Company had not commenced operations, and all activity related to formation and preparation for its Initial Public Offering (IPO).
Key Financial Metrics
| Metric | Value |
|---|---|
| Total Assets | $356,834 |
| Cash and Cash Equivalents | $11,593 |
| Total Liabilities | $436,121 |
| Shareholders' Deficit | ($79,287) |
| Net Loss (Inception to Sept 30, 2024) | ($104,287) |
| Net Loss per Share (Basic & Diluted) | ($0.02) |
| Working Capital Deficit | ($424,528) |
Capital Structure (as of Sept 30, 2024): 6,708,333 Class B ordinary shares issued and outstanding; no Class A ordinary shares issued. The filing notes that as of January 7, 2025, 18,488,125 Class A shares were outstanding following the IPO.
Material Changes and Subsequent Events
The most significant development occurred subsequent to the reporting period. On November 27, 2024, the Company consummated its Initial Public Offering (IPO) of 17,500,000 Units at $10.00 per Unit, generating gross proceeds of $175,000,000. Simultaneously, the Company sold 663,125 Private Placement Units for gross proceeds of $6,631,250.
Following the IPO closing:
- Trust Account: $175,875,000 was deposited into the Trust Account ($10.05 per Unit).
- Transaction Costs: Total costs were $11,028,226, comprising a $3,500,000 cash underwriting fee, a $7,000,000 deferred underwriting fee, and $528,226 in other offering costs.
- Debt Repayment: All outstanding advances from related parties ($124,980 as of Sept 30) were repaid.
Outlook, Risks, and Contingencies
Outlook: The Company has 18 months from the IPO closing (extendable to 24 months) to complete a Business Combination. If unsuccessful, the Company will liquidate and redeem public shares from the Trust Account. Management does not anticipate needing to raise additional funds for operations prior to a combination but notes that insufficient funds could arise if due diligence costs exceed estimates.
Risks and Contingencies:
- Going Concern: As of September 30, 2024, the Company had a working capital deficit. However, the consummation of the IPO provides sufficient liquidity for at least one year.
- Related Party Liability: The Sponsor has agreed to indemnify the Trust Account against third-party claims that reduce funds below $10.05 per share, subject to certain exceptions.
- Warrants: Public Warrants are exercisable at $11.50 per share. They become exercisable 30 days after a Business Combination or 12 months post-IPO, whichever is later. The Company may redeem warrants if the share price exceeds $18.00 for 20 of 30 trading days.
Investor Verification Checklist
- IPO Closing Confirmation: Verify the final number of Units sold and the exact amount deposited in the Trust Account post-IPO.
- Deferred Underwriting Fee: Confirm the $7,000,000 deferred fee obligation and its payment terms upon a successful Business Combination.
- Over-Allotment Option: Monitor the status of the 45-day over-allotment option for up to 2,625,000 additional Units.
- Related Party Advances: Confirm that the $124,980 in advances from related parties were fully repaid at the IPO closing.
- Combination Timeline: Track the 18-month deadline to complete a Business Combination and any potential shareholder-approved extensions.