DMII

Business Context and Reporting Period

Company: Drugs Made In America Acquisition II Corp. (DMII)

Reporting Period: Quarterly period ended June 30, 2026 (Form 10-Q).

Business Overview: DMII is a Cayman Islands-incorporated blank check company (SPAC) formed to effect a business combination with a target in the pharmaceutical industry. The company consummated its Initial Public Offering (IPO) on September 26, 2025, raising $500 million. As of the reporting date, the company has not commenced operations and has not selected a business combination target. The company has 24 months from the IPO closing to complete a combination or liquidate.

Key Financial Metrics

Debt and Liquidity: The company holds $450,000 in promissory notes issued to Alpha Multi Family Office. Operating cash is minimal ($174,974), while the majority of assets are held in the Trust Account ($513.9 million). The company reported a working capital deficit of $426,751.

Material Changes vs. Prior Period

• Profitability Shift: The company reported a net income of $8.7 million for the six months ended June 30, 2026, compared to a net loss of $97,400 for the same period in 2025. This change is driven entirely by interest income earned on the Trust Account, which was non-existent in the prior period as the IPO had not yet closed.
• Expense Increase: General and administrative costs increased to $244,257 for the six months ended June 30, 2026, from $97,400 in the prior year period, reflecting post-IPO operational costs.
• Trust Account Growth: The Trust Account balance increased from $504.9 million at December 31, 2025, to $513.9 million at June 30, 2026, due to accrued interest.
• Related Party Receivable: The company established a full reserve of $782,113 against amounts due from the Sponsor, deeming recovery remote. A partial recovery of $30,000 was recorded in the current period.

Outlook, Risks, and Management Commentary

• Going Concern: Management has determined that conditions raise substantial doubt about the company's ability to continue as a going concern within one year. The business plan is dependent on completing a business combination within the 24-month Combination Period; otherwise, the company will liquidate.
• Internal Controls: The company disclosed that its disclosure controls and procedures were not effective as of June 30, 2026. Material weaknesses were identified, including inadequate segregation of duties, insufficient written policies, and a lack of formal review processes for related party transactions.
• Financing: The company issued $450,000 in convertible promissory notes to Alpha Multi Family Office in March 2026. These notes may be converted into shares of the combined entity at a 35% discount to market price upon a business combination.
• Risks: Significant risks include the inability to complete a business combination, geopolitical instability affecting global markets, and the potential for the Sponsor to be unable to repay funds withdrawn from the working capital account.

Investor Verification Checklist

• Going Concern Status: Verify the company's ability to fund operations until the 24-month deadline for a business combination expires.
• Internal Control Weaknesses: Assess the remediation plan for the material weaknesses in disclosure controls and financial reporting.
• Sponsor Receivable: Confirm the status of the $782,113 due from the Sponsor and the likelihood of further recoveries.
• Convertible Debt Terms: Review the dilution impact of the $450,000 convertible notes issued to Alpha Multi Family Office.
• Trust Account Interest: Monitor the interest rate environment, as net income is currently derived solely from Trust Account yields.