Breeze Acquisition Corp. II 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Breeze Acquisition Corp. II. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Breeze Sponsor II, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Special Note Regarding Forward-Looking Statements This Quarterly Report includes “forward-looking statements” that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering (as defined below) filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Overview We are a blank check company incorporated in the Cayman Islands on August 20, 2025, formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering (the “Initial Public Offering”) and the sale of the Private Units, the proceeds of the sale of our shares in connection with our initial business combination pursuant to the forward purchase agreements (or backstop agreements we may enter into or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing or other sources. Results of Operations We have neither engaged in a ny operations nor generated any revenues to date. Our only activities for the three months ended March 31, 2026, were organizational activities, those necessary to prepare for our Initial Public Offering. We do not expect to generate any operating revenues until after the completion of our initial business combination. We will generate non-operating income in the form of interest income on investments held in our trust account after the Initial Public Offering. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. For the three months ended March 31, 2026, we had a net loss of $138,206, which resulted from operating and formation costs of $138,206. Through March 31, 2026, our efforts have been limited to organizational activities, activities relating to the Initial Public Offering and activities relating to general corporate matters. 16 Liquidity and Capital Resources For the three months ended March 31, 2026 , net cash used in operating activities was $133,239, which was due to our net loss of $138,206, partially offset by changes in working capital accounts of $ 4,967 . For the three months ended March 31, 2026 , net cash provided by financing activities was $133,239, which was due to proceeds from the promissory note - related party of $264,500 offset by payments for deferred offering costs of $131,261 . The registration statement for the Company’s Initial Public Offering was declared effective on May 12, 2026 . On May 14, 2026 , the Company consummated the Initial Public Offering of 12,500,000 units generating gross proceeds of $125,000,000 . Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 447,500 Private Units at a price of $10.00 per Private Unit, generating gross proceeds of $4,475,000. Following the closing of the Initial Public Offering on May 14, 2026 , an amount of $125,312,500 ($10.025 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Units was placed in a trust account. Subsequent to the Initial Public Offering on May 15, 2026, the Underwriter partially exercised its over-allotment option for an additional 1,500,000 Public Units at a price of $10.00 per Unit or $15,000,000. In conjunction with the Underwriter’s partial exercise of the over-allotment option, the Sponsor purchased an additional 22,500 Private Placement Units for $225,000.We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the funds held in the trust account and not previously released to us to pay our taxes (which interest shall be net of taxes payable and excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay our taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest earned on the amount in the trust account will be sufficient to pay our taxes. We expect the only taxes payable by us out of the funds in the trust account will be income and franchise taxes, if any. To the extent that our ordinary shares or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. After taking into consideration the consummation of the Initial Public Offering, we do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Off-Balance Sheet Arrangements As of March 31, 2026, we did not have any off-balance sheet arrangements. Contractual Obligations Registration and Shareholder Rights Agreement The holders of the (i) Founder Shares, which were issued in a private placement prior to the closing of the Initial Public Offering, (ii) Private Units (and the securities comprising such units) which were issued in a private placement simultaneously with the closing of the Initial Public Offering and (iii) Private Units (and the securities comprising such units) that may be issued upon conversion of Working Capital Loans will have registration rights to require the Company to register a sale of any of the Company’s securities held by them and any other securities of the Company acquired by them prior to the consummation of the Business Combination pursuant to the Registration Rights Agreement, dated May 12, 2026. Pursuant to the Registration Rights Agreement and assuming the underwriters exercise their over-allotment option in full and $1,500,000 of Working Capital Loans are converted into Private Units, the Company will be obligated to register up to 6,151,426 ordinary shares and 625,625 Private Placement Rights (if the underwriters’ over-allotment option is exercised in full). The number of ordinary shares includes (i) 5,050,676 ordinary shares issued as Founder Shares, (ii) 475,625 ordinary shares comprising part of the Private Units, (iii) 95,125 ordinary shares to be issued upon conversion of Private Placement Rights as part of the Private Units, (iv) 150,000 ordinary shares comprising part of the Private Units issued upon conversion of Working Capital Loans, (v) 30,000 ordinary shares to be issued upon conversion of Private Placement Rights as part of the working capital units upon conversion of Working Capital Loans and (vi) 350,000 representative shares. The number of Private Placement Rights includes 475,625 Private Placement Rights (if the underwriters’ over-allotment option is exercised in full) as part of the Private Units and 150,000 Private Placement Rights as part of the working capital units upon the conversion of Working Capital Loans. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the Initial Public Offering. 17 Promissory Notes - Related Party On August 20, 2025, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Promissory Note”). On January 25, 2026, the Company and the Sponsor amended the promissory note to increase the facility to $2,000,000. This loan is non-interest bearing and payable on the earlier of December 31, 2026 or the date on which Company consummates an initial public offering of its securities. As of March 31, 2026, the Company had $427,150 outstanding under the Promissory Note. On May 14, 2026 upon the closing of the Initial Public Offering, the Company paid the entire outstanding balance under the Promissory Note. Underwriters Agreement Pursuant to the underwriting agreement, the Sponsor and the executive officers and directors have agreed that, for a period of 180 days from the date of the Initial Public Offering, they will not, without the prior written consent of the representative, offer, sell, contract to sell, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or share right to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any units, share rights, ordinary shares or any other securities convertible into, or exercisable or exchangeable for, any units, ordinary shares, Founder Shares or share rights, subject to certain exceptions. The representative in its discretion may release any of the securities subject to these lock-up agreements at any time without notice, other than in the case of the officers and directors, which shall be with notice. The Sponsor, officers and directors are also subject to separate transfer restrictions on their Founder Shares and private placement shares pursuant to the letter agreement described herein. The Company granted the underwriters a 45-day option from the date of the Initial Public Offering to purchase up to 1,875,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. The underwriters were entitled to a cash underwriting discount of 1.25% of the gross proceeds of the units offered in the Initial Public Offering, or $1,562,500 in the aggregate (or $1,796,875 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable to the underwriters upon the closing of this offering. Subsequent to the Initial Public Offering on May 14, 2026, the underwriter partially exercised the over-allotment option for the purchase of an additional 1,500,000 Units and the underwriter was entitled to a cash underwriting discount of $187,500. The unexercised overallotment option for the remaining 375,000 Units was forfeited. Critical Accounting Estimates The preparation of unaudited financial statements in conformity with accounting principles generally accepted in the United States of America requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited financial statements, and income and expenses during the period reported. Making estimates requires Management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation, or set of circumstances that existed at the date of the unaudited financial statements, which Management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could materially differ from those estimates. As of March 31, 2026, we did not have any critical accounting estimates to be disclosed. 18 Item 3. Quantitative and Qualitative Disclosures About Market Risk. Not required for smaller reporting companies.