ATII

Business Context and Reporting Period

Company: Archimedes Tech SPAC Partners II Co. (ATII)
Reporting Period: Quarterly period ended June 30, 2026
Status: Cayman Islands blank check company (SPAC) formed to effect a business combination in the technology sector (AI, cloud, automotive). The Company is an emerging growth company and a shell company.
Key Event: On April 20, 2026, the Company entered into a Merger Agreement with Forge Nano, Inc. to re-domicile as a Delaware corporation and complete a business combination.

Key Financial Metrics

Results of Operations (Six Months Ended June 30, 2026):

• Net Loss: $(135,048,119)
• General & Administrative Expenses: $1,426,287
• Interest Income (Trust Account): $4,301,099
• PIPE Subscription Expense: $(100,000,000)
• Change in Fair Value of PIPE Liability: $(37,942,000)

Results of Operations (Three Months Ended June 30, 2026):

• Net Loss: $(136,752,922)
• Net Loss Per Share (Basic & Diluted): $(4.62)

Material Changes vs. Prior Period

• PIPE Liability Recognition: The most significant change is the recognition of a $100,000,000 PIPE subscription expense and a $37,942,000 increase in the fair value of the PIPE subscription derivative liability in Q2 2026. These items were not present in the comparable 2025 periods, driving the massive net loss.
• Liabilities: Total liabilities increased from $8.2 million to $146.6 million, primarily due to the $137.9 million PIPE subscription derivative liability.
• Shareholders' Deficit: Accumulated deficit expanded from $(6.7) million to $(146.1) million due to the non-cash fair value adjustments related to the PIPE transaction.
• Trust Account Growth: The Trust Account balance increased by approximately $4.3 million due to interest earned on demand deposits.

Outlook, Risks, and Contingencies

Merger Agreement: The Company is proceeding with a business combination with Forge Nano, Inc. The transaction involves a re-domiciliation to Delaware and a stock-for-stock exchange. Forge Nano shareholders will receive shares based on a $1.2 billion valuation, plus up to 90 million earn-out shares over five years.

PIPE Financing:

• Initial PIPE: A $100 million subscription agreement with an accredited investor (10M shares + 15M warrants) was entered into in April 2026. This is recorded as a derivative liability.
• Subsequent PIPE: On July 14, 2026 (subsequent event), the Company announced an additional PIPE financing of approximately $23 million (2.3M shares) with other investors.

Liquidity and Going Concern:

• The Company has a working capital deficit of $138 million and cash outside the Trust of only $414,970.
• Management has raised substantial doubt about the Company's ability to continue as a going concern if a business combination is not completed by the mandatory liquidation date of November 12, 2026.
• The Company relies on the Sponsor or affiliates to provide working capital loans (up to $1.5 million convertible) to fund operations until the merger closes.

Risks: Failure to complete the business combination by November 12, 2026, will result in liquidation and redemption of public shares. The valuation of the PIPE liability is subject to significant volatility based on Monte Carlo simulation inputs (volatility increased from 19.5% to 40.0% in Q2).

Investor Verification Checklist

• Merger Closing Date: Verify if the Forge Nano merger is on track to close before the November 12, 2026, mandatory liquidation deadline.
• PIPE Liability Volatility: Monitor the fair value of the $137.9 million PIPE derivative liability, as changes in volatility assumptions will directly impact net income/loss.
• Redemption Risk: Assess the likelihood of public shareholder redemptions, which could impact the cash available for the transaction and the deferred underwriting fee ($8.05 million).
• Working Capital Sufficiency: Confirm if the Sponsor has provided or will provide necessary working capital loans to sustain operations through the closing.
• Earn-Out Terms: Review the specific milestones required for the issuance of the 90 million earn-out shares to Forge Nano shareholders.