What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2025-11-05 · 53 added, 42 removed, 191 unchanged (33% of the section changed)

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” or “FGMC” or refer to FG Merger II Corp.

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” or refer to FG Merger II Corp.

References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to FG Merger Investors II LLC.

16 unchanged sentences

The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of September 30, 2025, the Company had not yet commenced any operations.

All activity through September 30, 2025 relates to the Company’s formation and the initial public offering (“IPO”), which is described below, and search of a Business Combination.

As of March 31, 2026, the Company had not yet commenced any operations.

All activity through March 31, 2026 relates to the Company’s formation and the initial public offering (“IPO”), which is described below.

The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest.

1 unchanged sentence

The Company has selected December 31 as its fiscal year end.

Recent Developments

Our registration statement was declared effective on January 28, 2025.

On January 30, 2025, we consummated our IPO of 8,000,000 units at $10.00 per unit (the “Units”).

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We have until 24 months from the closing of the IPO to complete a Business Combination.

If we are unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (net of funds withdrawn for working capital purposes (not to exceed $1,200,000 in aggregate) and taxes payable and less interest to pay dissolution expenses up to $100,000), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and our board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law.

If we are unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (net of funds withdrawn for working capital purposes (not to exceed $1,000,000 annually) and taxes payable and less interest to pay dissolution expenses up to $100,000), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and our board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law.

There will be no redemption rights or liquidation distribution with respect to our warrants, which will expire worthless if we fail to complete our initial Business Combination within the Combination period.

18 unchanged sentences

Pursuant to the Amendment, the parties to the Merger Agreement agreed to extend the Agreement End Date for the Merger Agreement from December 31, 2025, to March 31, 2026.

On April 6, 2026, Company entered into an amendment (the “Second Amendment ”) to the Merger Agreement with BOXABL.

Pursuant to the Second Amendment, the parties to the Merger Agreement agreed to extend the Agreement End Date for the Merger Agreement from March 31, 2026, to July 31, 2026.

Termination Provisions

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We have neither engaged in any operations nor generated any revenues to date.

Our only activities through September 30, 2025 were organizational activities, including those necessary to prepare for the IPO and identifying and working with the target company for a Business Combination.

Our only activities through March 31, 2026 were organizational activities, including those necessary to identifying and working with the target company for a Business Combination.

We do not expect to generate any operating revenues until after the completion of our Business Combination.

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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 in connection with completing a Business Combination.

For the three months ended September 30, 2025, the Company reported net income of $77,269, which consists of $847,927 in investment income earned in Trust Account, offset by $592,583 in general and administrative expenses which primarily include $425,000 expense paid towards the Business Combination.

The other offsetting expense was estimated $178,065 in income tax expense on income earned in the Trust Account.

For the nine months ended September 30, 2025, the Company reported net income of $974,654, which consists of $2,250181 in investment income earned in Trust Account, offset by $802,988 in general and administrative expenses which primarily include $425,000 expense paid towards the Business Combination.

The other offsetting expense was estimated $472,539 in income tax expense on income earned in the Trust Account.

For the three months ended September 30, 2024, the Company reported a net loss of $23,403, which consists of general and administrative expenses.

For the nine months ended September 30, 2024, the Company reported a net loss of $25,584, which consists of general and administrative expenses.

For the three months ended March 31, 2026, the Company reported net income of $287,762, which consists of $722,224 in investment income earned in Trust Account, offset by $273,298 in general and administrative expenses and $161,164 income tax expense.

For the three months ended March 31, 2025, the Company reported a net income of $315,350 which consists of $559,755 in investment income earned in Trust Account, offset by $126,856 in general and administrative expenses and $117,549 in income tax expense.

Liquidity and Capital Resources

As of September 30, 2025, we held a cash balance of $578,786.

As of March 31, 2026, we held a cash balance of $243,235.

Prior to the IPO, our liquidity needs were satisfied through the $25,000 proceeds received from the Sponsor for purchase of Founder Shares (as defined below), as well as $125,000 loan from Sponsor under a promissory note (“Promissory Notes”).

2 unchanged sentences

On March 5, 2025, the company paid $257,000 in principal and $4,935 in interest.

On April 1, 2025, the Company paid $160,000 in principal and $1,736 in interest As of September 30, 2025, there was no balance outstanding under the promissory note.

As of March 31, 2025, there was $160,000 outstanding balance in principle and $1,368 in accrued interest under the promissory note.

On January 30, 2025, we consummate our IPO of 8,000,000 Units.

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Pursuant to the Investment Management Trust Agreement between the Company and Continental Stock Transfer and Trust (“Trustee”) signed at IPO closing, we are allowed to withdraw up to $1,000,000 annually for working capital need from the investment income earned in the Trust Account.

On May 14, 2025, Company signed a side letter the Underwriter pursuant to which Company agreed to restricted the withdrawal of interest from the Trust Account for working capital needs to $1,200,000 in aggregate.

As of September 30, 2025, we have withdrawn $1,200,000 from the Trust Account.

As of March 31, 2026, we have withdrawn $1,200,000 from the Trust Account.

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required (“Working Capital Loans”).

As of September 30, 2025, there were no Working Capital Loans under this arrangement.

As of March 31, 2026, there were no Working Capital Loans under this arrangement.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business.

1 unchanged sentence

Off-Balance Sheet Arrangement

We have no obligations, assets, or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2025.

We have no obligations, assets, or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2026.

Contractual Obligations

17 unchanged sentences

On February 5, 2025, the underwriters elected to terminate their over-allotment option to purchase 1,200,000 IPO Units resulting in Sponsor to forfeit 300,000 Founder Shares.

As of September 30, 2025, there were 2,000,000 Founder Shares outstanding.

As of March 31, 2026, there were 2,000,000 Founder Shares outstanding.

The Initial Stockholders have agreed not to transfer, assign or sell any of the Founder Shares (except to certain permitted transferees) until, with respect to 50% of the Founder Shares, the earlier of (i) twelve months after the date of the consummation of a Business Combination, or (ii) the date on which the closing price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after a Business Combination, with respect to the remaining 50% of the Founder Shares, 12 months after the date of the consummation of a Business Combination, or earlier, in each case, if, subsequent to a Business Combination, the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their Public Shares for cash, securities or other property.

Promissory Notes

On October 6, 2023, the Company issued a promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $150,000.

The Company drew $125,000 under the promissory note.

2025, the Company paid off the entire $125,000 balance.

As of September 30, 2025, there was no balance outstanding under the Promissory Notes.

On October 6, 2023, we issued a promissory note to the Sponsor, pursuant to which we may borrow up to an aggregate principal amount of $150,000.

As of March 31, 2025, $125,000 outstanding under the Promissory Notes.

The Promissory Notes are noninterest bearing and payable on the consummation of the IPO.

On January 30, 2025, the Company issued an unsecured promissory note of $417,000 to the Sponsor.

On January 28, 2025, we issued an unsecured promissory note of $417,000 to the Sponsor.

This promissory note bear interest at the rate of 12% per year and will mature on January 30, 2026.

On March 5, 2025, the company paid $257,000 in principal and $4,935 in interest.

On April 1, 2025, the Company paid $160,000 in principal and $1,736 in interest As of September 30, 2025, there was no outstanding balance under the promissory note.

As of March 31, 2026, there was no balance outstanding under the promissory note.

Administrative Services Agreement

We entered into an administrative services agreement (the “Administrative Services Agreement”) with the Sponsor whereby the Sponsor will perform certain services for us for a monthly fee of $15,000.

As of September 30, 2025, we have paid $135,000 to the Sponsor.

As of March 31, 2026, we have paid $45,000 to the Sponsor.

Both executive officers of the Company serve as the managers of the Sponsor at close of the IPO.

19 unchanged sentences

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company did not have any cash equivalents as of September 30, 2025.

The Company did not have any cash equivalents as of March 31, 2026.

Deferred offering costs

2 unchanged sentences

Marketable securities held in trust account

At September 30, 2025, substantially all of the assets held in the Trust Account were invested in a money market fund focused on U.S Treasury obligation.

During the three months ended September 30, 2025, the Company withdrew 626,329 of the interest income in the Trust Account for working capital purposes.

During the nine months ended September 30, 2025, the Company withdrew 1,200,000 of the interest income in the Trust Account for working capital purposes.

At March 31, 2026, substantially all of the assets held in the Trust Account were invested in a money market fund focused on U.S Treasury obligation.

Common stock subject to possible redemption

3 unchanged sentences

The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.

Accordingly, at September 30, 2025, common stock subject to possible redemption is presented as temporary equity at redemption value, outside of the stockholders’ equity section of the Company’s balance sheet.

Accordingly, at March 31, 2026, common stock subject to possible redemption is presented as temporary equity at redemption value, outside of the stockholders’ equity section of the Company’s balance sheet.

The Company recognizes changes in redemption value using the “at redemption value” method and accordingly recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable shares to equal the redemption value at the end of each reporting period.

Such changes are reflected in additional paid-in-capital and retained or accumulated deficit if additional paid in capital account equals zero.

Such changes are reflected in additional paid-in-capital.

The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes.

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The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense.

There were no unrecognized tax benefits as of September 30, 2025 and no amounts accrued for interest and penalties.

There were no unrecognized tax benefits as of March 31, 2025 and no amounts accrued for interest and penalties.

The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

1 unchanged sentence

The company’s year-end is December 31 and no statutory tax deadline has yet occurred.

As of September 30, 2025, the Company has estimated $472,539 in income tax expense on the income earned in the Trust Account.

As of March 31, 2026, the Company has estimated $161,164 in income tax expense on the income earned in the Trust Account.

Reconciliation of Net Income (Loss) per Common Share

4 unchanged sentences

Net income (loss) per share of common stock is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective period.

Net income for the period from January 1, 2026 to March 31, 2026 was allocated to redeemable and non-redeemable common shares.

Net loss for the period from January 1, 2025 to IPO was allocated fully to the non-redeemable common shares.

Net income from IPO till September 30, 2025, was allocated to redeemable and non-redeemable common shares.

Net income from IPO till March 31, 2025, was allocated to redeemable and non-redeemable common shares.

Diluted net income per share attributable to stockholders adjusts the basic net income per share attributable to stockholders and the weighted-average shares of common share outstanding for the potentially dilutive impact of outstanding warrants.

11 unchanged sentences

Operating Segments

The Company operates as one operating segment.

Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s Chief Executive Officer and Chief Financial Officer in deciding how to allocate resources and assess performance.

The Company’s CODM evaluates the Company’s financial information and resources and assesses the performance of these resources.

The Company is not organized by market and is managed and operated as one business.

A single management team that reports to the CODM comprehensively manages the entire business.

Accordingly, the Company does not accumulate discrete financial information with respect to separate divisions and does not have separate operating or reportable segments.

Since the Company operates in one operating segment, all required financial segment information can be found in the financial statement.

ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers.

Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.

The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer and the Chief Financial Officer, who reviews the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance.

Accordingly, management has determined that there is only one reportable segment.

The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statement of operations as net income or loss.

The measure of segment assets is reported on the balance sheet as total assets.

When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net income or loss and total assets, which include the following:

March 31, 2026

March 31, 2025

General and administrative expenses

Interest earned in the Trust Account

The CODM reviews interest earned on the Trust Account to measure and monitor stockholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the Trust Agreement.

General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a business combination or similar transaction within the business combination period.

The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.

General and administrative costs, as reported on the statement of operations, are the significant segment expenses provided to the CODM on a regular basis.

All other segment items included in net income or loss are reported on the statement of operations and described within their respective disclosures.

Recently issued accounting standard

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The guidance in ASU 2023-07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal years beginning after December 31, 2024, with early adoption permitted.

The Company adopted this guidance as of January 31, 2025.

The Company adopted this guidance for the year ended 2025.

The adoption resulted in disclosure changes only.

In December 2023, the Financial Accounting Standards Board issued ASU 2023-09, which requires enhanced disclosures related to the effective tax rate reconciliation and income taxes paid.

The guidance is intended to improve transparency regarding the nature and magnitude of factors contributing to differences between the statutory tax rate and the effective tax rate, as well as cash taxes paid by jurisdiction.

The Company adopted this standard effective January 1, 2025 on a prospective basis.

The adoption did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows, as the amendments are disclosure-only in nature.

Prior-period amounts have been recast to conform to the current-period presentation, where applicable.

The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis