What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-13 compared with 2025-03-27 · 909 added, 1313 removed, 753 unchanged (75% of the section changed)

13 unchanged sentences

effective as of the end of the annual period ended December 31, 2025.

Annual Report on Internal Control over Financial Reporting

This Annual Report does not

include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our

independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.

Report on Internal Controls Over Financial Reporting

required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing

and maintaining adequate internal control over financial reporting.

Our internal control over financial reporting is designed to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting

purposes in accordance with U.S.

Our internal control over financial reporting includes those policies and procedures that:

to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets

of our company,

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP,

and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could

have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our financial

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate

because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

Management assessed

the effectiveness of our internal control over financial reporting as of December 31, 2025.

In making these assessments, management used

the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated

Framework (2013).

Based on our assessments and those criteria, management determined that our internal controls over financial reporting

were effective as of December 31, 2025.

Annual Report on Form does not include an attestation report of internal controls from our independent registered public accounting firm

due to our status as an emerging growth company under the JOBS Act.

in Internal Control over Financial Reporting

were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the

Exchange Act) during the most recent fiscal year that have materially affected, or are reasonably likely to materially affect, our internal

were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange

Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal

control over financial reporting.

15 unchanged sentences

Rackind recently

served in Zurich as the Global Head of Real Estate at Credit Suisse Asset Management (CSAM) from June 2022 to November 2023,

served in Zurich as the Global Head of Real Estate at Credit Suisse Asset Management (CSAM) from June 2022 to October 2023,

managing approximately CHF 43 billion in assets under management (AUM).

4 unchanged sentences

Prior to his tenure

Rackind founded and grew the EQT AB Real Estate platform to €11.5 billion AUM from January 2015 to

December 2021.

This growth was achieved through a mix of organic close-ended pan-European funds and inorganic corporate

M&A, including the $1.8 billion acquisition of Exeter Property Group, a leading North American logistics real estate investment

management platform.

Rackind’s career also includes senior roles at Wainbridge from December 2009 to December 2014

as founding partner, Cambridge Place Investment Management from April 2006 to August 2009, Meyer Bergman from November 2004

to March 2006, Hines from June 1999 to November 2004, HRO from July 1998 to June 1999, Baltic Plc from August 1996

to July 1998, and Weatherall Green & Smith from January 1994 to July 1996.

Rackind founded and grew the EQT AB Real Estate platform to €11.5 billion AUM from January 2015 to December 2021.

This growth was achieved through a mix of organic close-ended pan-European funds and inorganic corporate M&A, including

the $1.8 billion acquisition of Exeter Property Group, a leading North American logistics real estate investment management platform.

Rackind’s career also includes senior roles at Wainbridge from December 2009 to December 2014 as founding partner,

Cambridge Place Investment Management from April 2006 to August 2009, Meyer Bergman from November 2004 to March 2006,

Hines from June 1999 to November 2004, HRO from July 1998 to June 1999, Baltic Plc from August 1996 to July 1998,

and Weatherall Green & Smith from January 1994 to July 1996.

Rackind has also served as a director of Aram

Advisors Ltd.

He holds a B.Sc.

(Hons) in Valuation &

Estate Management from the University of the West of England, Bristol.

Rackind’s extensive experience in investment

and finance across various jurisdictions and wide range of assets as well as his executive management positions with global institutions,

we believe Mr.

Rackind will provide valuable advice as we consider potential merger candidates.

(Hons) in Valuation & Estate Management from the University of the West of England, Bristol.

Rackind’s extensive experience in investment and finance across various jurisdictions and wide range of assets as well

as his executive management positions with global institutions, we believe Mr.

Rackind will provide valuable advice as we consider potential

merger candidates.

Gishen, Chief Executive Officer

1 unchanged sentence

Gishen previously served as the Chief Executive Officer of Freedom Acquisition I

from December 2020 to July 2023, prior to its business combination with Complete Solaria, Inc., a leading solar technology,

services and installation company, and has since served as a director of Complete Solaria, Inc.

Gishen has over

20 years of experience in financial services.

Gishen served in several senior roles at Credit Suisse from 2015 to 2020,

including Head of Investor Relations, Corporate Communications, Marketing and Branding from 2019 to 2020 and Head of Investor Relations

and Corporate Communications from 2017 to 2019.

from December 2020 to July 2023, prior to its business combination with Complete Solaria, Inc.

(subsequently renamed

SunPower Inc.) (Nasdaq:

SPWR), a leading solar technology, services and installation company, and has since served as a director of SunPower

Gishen has over 20 years of experience in financial services.

Gishen served in several senior roles at Credit

Suisse from 2015 to 2020, including Head of Investor Relations, Corporate Communications, Marketing and Branding from 2019 to 2020 and

Head of Investor Relations and Corporate Communications from 2017 to 2019.

Prior to 2015, Mr.

Gishen was a Partner at Ondra Partners, a financial advisory

firm, and prior to that, a Managing Director at Nomura in London and Lehman Brothers from 1999 to 2008 where he specialized in Equity

Capital Markets.

Gishen was a Partner at Ondra Partners,

a financial advisory firm, and prior to that, a Managing Director at Nomura in London and Lehman Brothers from 1999 to 2008 where he

specialized in Equity Capital Markets.

He graduated from University of Leeds.

Given his extensive experience in leadership positions and prior work with a

special purpose acquisition company, we believe Mr.

Gishen will provide valuable perspectives and advice as we consider potential

merger candidates.

Given his extensive experience in leadership positions

and prior work with a special purpose acquisition company, we believe Mr.

Gishen will provide valuable perspectives and advice as we

consider potential merger candidates.

Lee, Chief Financial Officer

Lee is our Chief Financial Officer.

Lee has approximately 20 years of financial experience and previously served as Senior

Advisor of Freedom Acquisition I Corp.

Lee has approximately 20 years of financial experience and previously served as Senior Advisor

of Freedom Acquisition I Corp.

from 2021 to 2023.

Lee co-founded BFY Capital, a specialty private

credit investment platform focused on consumer brands in the natural and organic food, beverage, beauty and pet industries.

BFY, from 2016 to 2018, Mr.

Lee was the CFO of Patch of Land, a Series A funded real estate marketplace lending and fintech

start-up, where he led all capital markets, fundraising, finance, accounting and investor relations activities for the company.

2008 to 2016, Mr.

Lee was a director in Credit Suisse’s Investment Banking division in Los Angeles, where he advised gaming,

lodging & leisure, financial sponsors and media entertainment clients.

He has executed over 25 M&A, equity and leveraged

finance transactions, totaling over $15 billion in transaction value.

Lee co-founded BFY Capital, a specialty private credit investment platform

focused on consumer brands in the natural and organic food, beverage, beauty and pet industries.

Prior to BFY, from 2016 to 2018, Mr.

Lee was the CFO of Patch of Land, a Series A funded real estate marketplace lending and fintech start-up, where he led all capital markets,

fundraising, finance, accounting and investor relations activities for the company.

From 2008 to 2016, Mr.

Lee was a director in Credit

Suisse’s Investment Banking division in Los Angeles, where he advised gaming, lodging & leisure, financial sponsors and media

entertainment clients.

He has executed over 25 M&A, equity and leveraged finance transactions, totaling over $15 billion in transaction

Prior to 2006, Mr.

Lee worked at The Walt Disney Company

DIS) as a Senior Analyst in the Corporate Treasury group for five years where he oversaw pension fund allocations for a $1 billion

alternatives portfolio and managed the company’s foreign exchange risks.

Lee holds an MBA from the New York University

Stern School of Business and a B.A.

Lee worked at The Walt Disney Company (NYSE:

DIS) as a Senior Analyst in the Corporate Treasury group for five

years where he oversaw pension fund allocations for a $1 billion alternatives portfolio and managed the company’s foreign exchange

Lee holds an MBA from the New York University Stern School of Business and a B.A.

from the University of California, Los Angeles.

Nell Cady-Kruse,

Cady-Kruse serves on our board of directors.

Since March 2025, Ms.

Cady-Kruse has served as a member of the Board

Risk Committee of the Public Investment Fund of Saudi Arabia (PIF).

Cady-Kruse, Director

Cady-Kruse has served as our director since November 25, 2024.

Since April 2022, Ms.

Cady-Kruse has served as an

independent director for Varagon Capital Corp., a BDC, and has chaired the governance committee.

Since 2020, she has also served on the

Senior Advisory Board for No One Left Behind, a charitable organization focusing on supporting former interpreters and U.S.

employees eligible for the Iraqi and Afghan Special Immigrant Visa.

Cady-Kruse has

served as an independent director for Varagon Capital Corp., a BDC, and has chaired the governance committee.

Since 2020, she has also

served on the Senior Advisory Board for No One Left Behind, a charitable organization focusing on supporting former interpreters and

government employees eligible for the Iraqi and Afghan Special Immigrant Visa.

Since February 2025, Ms.

Cady-Kruse has

served as an independent member of the board risk committee for the Public Investment Fund, the sovereign wealth fund of the Kingdom

of Saudi Arabia.

From May 2022 to July 2023, Ms.

Cady-Kruse served

as an independent director on the board of Freedom Acquisition I Corp.

She also served on the board and chaired the board risk committees

for Barclays US from September 2017 to December 2023 and Barclays Bank Delaware from September 2016 to December 2023.

Cady-Kruse served as an independent director on the board of Freedom

Acquisition I Corp.

She also served on the board and chaired the board risk committees for Barclays US from September 2017

to December 2023 and Barclays Bank Delaware from September 2016 to December 2023.

Prior to board service, Ms.

Cady-Kruse was a senior global executive at Standard Chartered Bank, as global Chief Risk Officer,

Wholesale Banking, retiring in 2014.

Over her career, Ms.

Cady-Kruse specialized in leveraged finance, corporate credit and

structured finance, portfolio management, private equity, and risk management & strategy, and worked at Bankers Trust (August 1985

to December 2000), Credit Suisse (February 2022 to December 2010), and Standard Chartered Bank (January 2011 to August 2014),

in the U.S., Europe and Asia.

Cady-Kruse is a CFA Charterholder and holds a CIPM (Certificate in Investment Performance

Measurement).

She is a Leadership Fellow of the National Association of Corporate Directors and holds a Certificate in Cybersecurity

Oversight from Carnegie Mellon Software Engineering Institute.

Cady-Kruse has served on numerous boards, including Futurebank,

Bankers Trust of California, the Risk Management Institute of the National University of Singapore and Young Enterprise London.

Cady-Kruse holds

with Honors in Agricultural Economics from Cornell University and an MBA from Cornell University.

Given her extensive experience

in finance and her numerous directorships across various entities, we believe Ms.

Cady-Kruse will provide valuable perspectives

to executing our strategy, driving profitability and enhancing value for our shareholders.

Cady-Kruse was

a senior global executive at Standard Chartered Bank, as global Chief Risk Officer, Wholesale Banking, retiring in 2014.

Over her career,

Cady-Kruse specialized in leveraged finance, corporate credit and structured finance, portfolio management, private equity,

and risk management & strategy, and worked at Bankers Trust (August 1985 to December 2000), Credit Suisse (February 2022

to December 2010), and Standard Chartered Bank (January 2011 to August 2014), in the U.S., Europe and Asia.

Cady-Kruse is

a CFA Charterholder and holds a CIPM (Certificate in Investment Performance Measurement).

She is a Leadership Fellow of the National

Association of Corporate Directors and holds a Certificate in Cybersecurity Oversight from Carnegie Mellon Software Engineering Institute.

Cady-Kruse has served on numerous boards, including Futurebank, Bankers Trust of California, the Risk Management Institute

of the National University of Singapore and Young Enterprise London.

Cady-Kruse holds a B.Sc.

with Honors in Agricultural

Economics from Cornell University and an MBA from Cornell University.

Given her extensive experience in finance and her numerous directorships

across various entities, we believe Ms.

Cady-Kruse will provide valuable perspectives to executing our strategy, driving profitability

and enhancing value for our shareholders.

Rallo, Director

Rallo serves on our board of directors.

Rallo has over 33 years of financial experience assisting public and privately

held companies to grow worldwide.

He has worked with global enterprises in technology, healthcare, retail and government agencies to

strategically increase their corporate value, to identify and manage risks, and to communicate effectively with internal and external

stakeholders on topics of cross functional business transformation.

Rallo has served as our director since November 25, 2024.

Rallo has over 33 years of financial experience assisting

public and privately held companies to grow worldwide.

He has worked with global enterprises in technology, healthcare, retail and government

agencies to strategically increase their corporate value, to identify and manage risks, and to communicate effectively with internal

and external stakeholders on topics of cross functional business transformation.

Most recently, between 2020 and 2024, Mr.

Rallo served as Chief

Financial Officer of Xometry (NASDAQ:

served as Chief Financial Officer of Xometry (Nasdaq:

XMTR), a leading technology company in the advanced manufacturing industry.

As Chief Financial

Rallo played a key role in Xometry’s initial public offering and was responsible for driving investments, global

expansion and acquisitions.

Chief Financial Officer, Mr.

Rallo played a key role in Xometry’s initial public offering and was responsible for driving

investments, global expansion and acquisitions.

Prior to joining Xometry, between 2005 and 2019, Mr.

Rallo served in various capacities, most recently

as Chief Financial Officer and President of Liquidity Services, at Liquidity Services (NASDAQ:

LQDT), a large provider of reverse logistics

infrastructure for government entities and Fortune 500 retailers, where he played a key role in the company’s initial public offering.

Rallo served in various capacities,

most recently as Chief Financial Officer and President of Liquidity Services, at Liquidity Services (Nasdaq:

LQDT), a large provider

of reverse logistics infrastructure for government entities and Fortune 500 retailers, where he played a key role in the company’s

initial public offering.

Prior to Liquidity Services, Mr.

Rallo served as the Chief Financial Officer of Sleep Service of America, a nationwide outsourcer

of sleep labs to the largest hospital chains in the country.

Rallo served as the Chief Financial Officer of Sleep Service of America,

a nationwide outsourcer of sleep labs to the largest hospital chains in the country.

Prior to that, Mr.

Rallo was an investment banker for five years

focused on IPOs, mergers and acquisitions, and debt and equity fundraising.

Rallo started his career at Deloitte and spent 5 years

as a public accountant.

Rallo was an investment

banker for five years focused on IPOs, mergers and acquisitions, and debt and equity fundraising.

Rallo started his career

at Deloitte and spent 5 years as a public accountant.

Rallo holds an MBA from the Robert H.

Smith School of Business at the University of Maryland and

Smith School of Business

at the University of Maryland and a B.S.

in Business and Accounting from Washington and Lee University.

Given his financial expertise and successful career as a Chief

Financial Officer, we believe Mr.

Rallo will provide valuable perspectives to executing our strategy and evaluating potential merger

Given his financial expertise

and successful career as a Chief Financial Officer, we believe Mr.

Rallo will provide valuable perspectives to executing our strategy

and evaluating potential merger candidates.

Alashkar, Director

Alashkar serves on our board of directors.

Alashkar has 20 years of experience in underwriting, negotiating, and structuring

private transactions across various sectors.

She has built and led high-growth investment platforms for global asset managers, universal

banking groups, and boutique investment houses.

Alashkar has served as our director since November 25, 2024.

Alashkar has 20 years of experience in underwriting, negotiating,

and structuring private transactions across various sectors.

She has built and led high-growth investment platforms for global asset

managers, universal banking groups, and boutique investment houses.

She has demonstrable expertise in navigating large-scale, capital-intensive growth

1 unchanged sentence

and, more recently, she has focused on investments in high-impact companies catalyzing transformative change in hard-to-abate industries.

such as Northvolt, H2 Green Steel, and Solar Mosaic.

Alashkar co-founded the Swiss-based private investment

firm, 1648 Capital, where she currently heads global direct private investments, complementing the corporate and family office advisory

Alashkar co-founded the Swiss-based private investment firm, 1648 Capital, where she continues to serve on the

board and oversee select global direct private investments alongside the firm’s corporate and family-office advisory activities.

Ad interim, Ms.

Alashkar has also held various roles at Deutsche Bank, ultimately serving as Global Head of Private Markets

for institutional wealth clients.

At Deutsche Bank, she spearheaded the private placements business, combining origination with distribution

and primarily focusing on pre-IPO equity rounds and private credit syndications.

She played a key leadership role in capital raising,

marketing complex investment opportunities, and negotiating sophisticated financing structures.

Alashkar has also held various roles at Deutsche Bank, ultimately serving as Global Head of Private Markets for institutional

wealth clients.

At Deutsche Bank, she spearheaded the private placements business, combining origination with distribution and primarily

focusing on pre-IPO equity rounds and private credit syndications.

She played a key leadership role in capital raising, marketing

complex investment opportunities, and negotiating sophisticated financing structures.

More recently, Ms.

Alashkar served

as Head of Direct Private Investments at J.

Safra Sarasin, where she created a buy-side platform for private capital investors,

leading origination, due diligence, and active management of investments in several private companies.

is a Chartered Financial Analyst ® charterholder.

She holds a Master of Finance from London Business School and a

Bachelor of Laws from King’s College London.

Alashkar served as Head of Direct

Private Investments at J.

Safra Sarasin, where she created a buy-side platform for private capital investors, leading origination,

due diligence, and active management of investments in several private companies.

Alashkar is a Chartered Financial Analyst ® charterholder.

She holds a Master of Finance from London Business School and

a Bachelor of Laws from King’s College London.

Committed to the energy transition, Ms.

Alashkar recently engaged in Cambridge

University’s program on Climate Change for Decision-Makers.

Alashkar has board experience and a strong background in corporate

governance and risk management.

Recognized for her leadership, she has received numerous industry awards, including Deutsche Bank’s

Global Leadership Award for Innovative Investment Solutions in 2019 and Women in Finance Investment Banking Director of the Year (Europe)

Her insights are regularly featured in industry discussions, reflecting her commitment to advancing private markets and sustainable

Alashkar recently engaged in Cambridge University’s

program on Climate Change for Decision-Makers.

Alashkar has board experience and a strong background in corporate governance and

risk management.

Recognized for her leadership, she has received numerous industry awards, including Deutsche Bank’s Global Leadership

Award for Innovative Investment Solutions in 2019 and Women in Finance Investment Banking Director of the Year (Europe) in 2017.

insights are regularly featured in industry discussions, reflecting her commitment to advancing private markets and sustainable investments.

Given her extensive experience in investment and finance and leadership positions, we believe Ms.

Alashkar will provide

valuable advice as we consider potential merger candidates.

Alashkar will provide valuable advice

as we consider potential merger candidates.

Relationships

family relationships exist between any of our directors or executive officers.

Blank Check Experience

sponsor is FACT II Acquisition Parent LLC, a Cayman Islands limited liability company.

Our sponsor was established by Adam Gishen,

Min Lee, Richard Nespola, Jr.

and Joseph Wagman to leverage their extensive experience in acquiring, building, operating and scaling

global financial services and complex operations businesses in constantly evolving environments.

Gishen has over 25 years

of experience in financial services and has held senior leadership responsibilities in recent years as the Chief Executive Officer

of Freedom Acquisition I Corp., a director of Complete Solaria, Inc.

CSLR), and at Credit Suisse running its Global Investor

Relations and Corporate Communications functions.

has approximately 20 years of financial experience and previously served as Senior Advisor of Freedom Acquisition I Corp.

2021 to 2023.

Lee is a Co-Founder of BFY Capital, a specialty private credit investment platform focused on consumer brands

in the natural and organic food, beverage, beauty and pet industries.

Our sponsor was established by Adam Gishen, Min

Lee, Richard Nespola, Jr.

and Joseph Wagman to leverage their extensive experience in acquiring, building, operating and scaling global

financial services and complex operations businesses in constantly evolving environments.

Gishen has over 25 years of experience

in financial services and has held senior leadership responsibilities in recent years as the Chief Executive Officer of Freedom Acquisition

I Corp., a director of SunPower Inc.

SPWR), and at Credit Suisse running its Global Investor Relations and Corporate Communications

Lee has approximately 20 years of financial experience and previously served as Senior Advisor of Freedom Acquisition I Corp.

Lee is a Co-Founder of BFY Capital, a specialty private credit investment platform focused on consumer brands in the natural

and organic food, beverage, beauty and pet industries.

Prior to BFY, Mr.

Lee was the CFO of Patch of Land, a Director

in Credit Suisse’s Investment Banking division, and worked at The Walt Disney Company as a Senior Analyst in the company’s

Corporate Treasury group.

has over 24 years of experience as an operator and private investor and previously served as Senior Advisor of Freedom Acquisition

Lee was the CFO of Patch of Land, a Director in Credit Suisse’s

Investment Banking division, and worked at The Walt Disney Company as a Senior Analyst in the company’s Corporate Treasury group.

Nespola has over 24 years of experience as an operator and private investor and previously served as Senior Advisor of Freedom Acquisition

from 2021 to 2023.

He is Co-Founder of Working Lab Capital, BFY Capital and Victura Capital, which are diversified private

investment platforms focused on venture, specialty private credit and real estate respectively.

He is Co-Founder of Working Lab Capital, BFY Capital and Victura Capital, which are diversified private investment

platforms focused on venture, specialty private credit and real estate respectively.

Previously, Mr.

Nespola was a member

of the leadership team of Liquidity Services (NASDAQ:

as Director, he led Global Sales, FP&A, and Channel Revenue Optimization

functions and was part of the Corporate Development team focused on acquisitions.

Nespola was a member of the leadership

team of Liquidity Services (Nasdaq:

as Director, he led Global Sales, FP&A, and Channel Revenue Optimization functions and

was part of the Corporate Development team focused on acquisitions.

Prior to LQDT, Mr.

Nespola worked at Freddie Mac,

leading structured transactions for the Security Sales & Trading Group.

Nespola is also a Partner in Quimby Ventures

where he oversees alternative fund investments.

Nespola has his MBA from the NYU Stern School of Business and holds his BA from

Washington University in St Louis.

is a member of the investment team of our sponsor, and he was previously a member of the investment team of Freedom Acquisition I

Corp., where he held responsibilities in connection with Freedom Acquisition I Corp.’s business combination transaction with

Complete Solaria, Inc., valuation and capital structuring, fundraising and investor relations.

Wagman previously was a member

Safra Group’s Private Equity investment team, where he was engaged in financial modeling, company valuations, portfolio

management and transaction sourcing, and at SOSV, an early stage venture capital firm, where he worked closely with portfolio companies

on their growth strategies and produced due diligence reports for the firm’s investment committee.

Wagman holds a Bachelor

of Science in Economics from the University of Birmingham and a Master of Science in Finance and Private Equity from the London School

of Economics and Political Science.

Nespola worked at Freddie Mac, leading structured

transactions for the Security Sales & Trading Group.

Nespola is also a Partner in Quimby Ventures where he oversees alternative

fund investments.

Nespola has his MBA from the NYU Stern School of Business and holds his BA from Washington University in St Louis.

Wagman is a member of the investment team of our sponsor, and he was previously a member of the investment team of Freedom Acquisition

I Corp., where he held responsibilities in connection with Freedom Acquisition I Corp.’s business combination transaction with

Complete Solaria, Inc.

(subsequently renamed SunPower Inc.), valuation and capital structuring, fundraising and investor relations.

Wagman previously was a member of the J.

Safra Group’s Private Equity investment team, where he was engaged in financial modeling,

company valuations, portfolio management and transaction sourcing, and at SOSV, an early stage venture capital firm, where he worked

closely with portfolio companies on their growth strategies and produced due diligence reports for the firm’s investment committee.

Wagman holds a Bachelor of Science in Economics from the University of Birmingham and a Master of Science in Finance and Private

Equity from the London School of Economics and Political Science.

believe that the collective experience of the team members of our sponsor, in combination with their deep and broad global network of

4 unchanged sentences

engagement with its management team, and enabling that company to leverage the benefits of scale to grow and increase profitability.

past performance of our management team is not a guarantee either (i) of success with respect to any business combination we may

consummate or (ii) that we will be able to identify a suitable candidate for our initial business combination.

You should not rely

on the historical record of our management’s performance as indicative of our future performance.

past performance of our management team is not a guarantee either (i) of success with respect to any business combination we may consummate

or (ii) that we will be able to identify a suitable candidate for our initial business combination.

You should not rely on the historical

record of our management’s performance as indicative of our future performance.

and Terms of Office of Officers and Directors

8 unchanged sentences

office for a three-year term.

Subject to any other special rights applicable to the shareholders, any vacancies on our board of

directors may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board of directors

or by a majority of the holders of our ordinary shares (or, prior to our initial business combination, holders of our founder shares).

The current class structure is as follows:

Subject to any other special rights applicable to the shareholders, any vacancies on our board of directors

may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board of directors or by

a majority of the holders of our ordinary shares (or, prior to our initial business combination, holders of our founder shares).

current class structure is as follows:

Class I, whose current term will expire at our first annual general meeting of stockholders;

Class II, whose term will expire at our second annual general meeting of stockholders;

and Class III, whose term will expire at our third

annual general meeting of stockholders.

II, whose term will expire at our second annual general meeting of stockholders;

and Class III, whose term will expire at our third annual

general meeting of stockholders.

The current Class I Director is Hella Alashkar;

the current Class II Directors are Nell Cady-Kruse

and James Rallo;

the current Class II Directors are Nell Cady-Kruse and

and the current Class III Directors are Adam Gishen and Robert Rackind.

14 unchanged sentences

an audit committee in compliance with Section 3(a)(58)(A) of the Exchange Act,

a compensation committee and a nominating committee, each comprised of independent directors.

Under Nasdaq listing rule 5615(b)(1),

a company listing in connection with its initial public offering is permitted to phase in its compliance with the independent committee

requirements.

We do not intend to rely on the phase-in schedules set forth in Nasdaq listing rule 5615(b)(1).

a compensation committee and a nominating and corporate governance committee, each comprised of independent directors.

Each committee

operates under a charter that will be approved by our board of directors and will have the composition and responsibilities described

The charter of each committee is available on our website at https://freedomac2.com/investor-center/governance/ .

operates under a charter that was approved by our board of directors and has the composition and responsibilities described below.

charter of each committee is available on our website at https://freedomac2.com/investor-center/governance/ .

The inclusion of

our website address in this Annual Report does not incorporate by reference the information on or accessible through our website into

this Annual Report.

We have included our website in this Annual Report solely as an inactive textual reference.

have established an audit committee of the board of directors.

5 unchanged sentences

have adopted an audit committee charter, which details the purpose and principal functions of the audit committee, including:

board oversight of (1) the integrity of our financial statements, (2) our compliance

with legal and regulatory requirements, (3) our independent registered public accounting

firm’s qualifications and independence, and (4) the performance of our internal

audit function and independent registered public accounting firm;

board oversight of (1) the integrity of our financial statements, (2) our compliance with

legal and regulatory requirements, (3) our independent registered public accounting firm’s

qualifications and independence, and (4) the performance of our internal audit function and

independent registered public accounting firm;

appointment, compensation, retention, replacement, and oversight of the work of the independent

12 unchanged sentences

and reviewing a report, at least annually, from the independent registered public accounting

firm describing (1) the independent registered public accounting firm’s internal

quality-control procedures and (2) any material issues raised by the most recent

internal quality-control review, or peer review, of the audit firm, or by any inquiry

or investigation by governmental or professional authorities, within the preceding five years

respecting one or more independent audits carried out by the firm and any steps taken to

deal with such issues;

firm describing (1) the independent registered public accounting firm’s internal quality-control

procedures and (2) any material issues raised by the most recent internal quality-control

review, or peer review, of the audit firm, or by any inquiry or investigation by governmental

or professional authorities, within the preceding five years respecting one or more independent

audits carried out by the firm and any steps taken to deal with such issues;

to review and discuss our annual audited financial statements and quarterly financial statements

17 unchanged sentences

have adopted a compensation committee charter, which details the purpose and responsibility of the compensation committee, including:

● reviewing and

approving on an annual basis the corporate goals and objectives relevant to our Chief Executive

Officer’s compensation, evaluating our Chief Executive Officer’s performance

and approving on an annual basis the corporate goals and objectives relevant to our Chief

Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance

in light of such goals and objectives and determining and approving the remuneration (if

1 unchanged sentence

and making recommendations to our board of directors with respect to the compensation, and

any incentive-compensation and equity-based plans that are subject to board approval

of all of our other officers;

any incentive-compensation and equity-based plans that are subject to board approval of all

of our other officers;

our executive compensation policies and plans;

15 unchanged sentences

governance committee are Nell Cady-Kruse, James Rallo and Hella Alashkar.

Nell Cady-Kruse serves as chair of the nominating and

corporate governance committee.

Nell Cady-Kruse serves as chair of the nominating and corporate

governance committee.

have adopted a nominating and corporate governance committee charter, which details the principal functions of the nominating and corporate

24 unchanged sentences

shares will not have the right to recommend director candidates for nomination to our board of directors.

SEC adopted final rules implementing the incentive-based compensation recovery provisions of the Dodd-Frank Act, and Nasdaq

has adopted listing standards consistent with the SEC rules.

In compliance with those standards, we have adopted a compensation recovery

policy, or “clawback” policy, which applies to our executive officers, within the meaning of Section 10D of the Exchange

Act and Rule 10D-1 promulgated thereunder, who were employed by the Company or a subsidiary of the Company during the applicable

recovery period.

Under the policy, in the event that the financial results upon which a cash or equity-based incentive award was predicated

become the subject of a financial restatement that is required because of material non-compliance with financial reporting requirements,

the Compensation Committee will conduct a review of awards covered by the policy and recoup any erroneously awarded incentive-based compensation

to ensure that the ultimate payout gives retroactive effect to the financial results as restated.

The policy covers any cash or equity-based

incentive compensation award that was paid, earned or granted to a covered officer during the last completed three fiscal years

immediately preceding the date on which the Company is required to prepare the accounting restatement.

SEC adopted final rules implementing the incentive-based compensation recovery provisions of the Dodd-Frank Act, and Nasdaq has adopted

listing standards consistent with the SEC rules.

In compliance with those standards, we have adopted a compensation recovery policy,

or “clawback” policy, which applies to our executive officers, within the meaning of Section 10D of the Exchange Act and

Rule 10D-1 promulgated thereunder, who were employed by the Company or a subsidiary of the Company during the applicable recovery period.

Under the policy, in the event that the financial results upon which a cash or equity-based incentive award was predicated become the

subject of a financial restatement that is required because of material non-compliance with financial reporting requirements, the Compensation

Committee will conduct a review of awards covered by the policy and recoup any erroneously awarded incentive-based compensation to ensure

that the ultimate payout gives retroactive effect to the financial results as restated.

The policy covers any cash or equity-based incentive

compensation award that was paid, earned or granted to a covered officer during the last completed three fiscal years immediately preceding

the date on which the Company is required to prepare the accounting restatement.

clawback policy is filed with this Annual Report as Exhibit 97.1.

adopted a code of business conduct and ethics (our “Code of Ethics”) applicable to our directors, officers and employees,

are able to review a copy of our form of Code of Ethics by accessing our public filings at the SEC’s website at www.sec.gov .

In addition, a copy of the Code of Ethics will be provided without charge upon request from us.

including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing

similar functions.

Code of Ethics is available on our website at https://freedomac2.com/investor-center/governance/.

We intend to disclose any amendments

to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

to or waivers of certain provisions of our Code of Ethics on our website to the extent required by the applicable rules and exchange

requirements.

The inclusion of our website address in this Annual Report does not incorporate by reference the information on or accessible

through our website into this Annual Report.

We have included our website in this Annual Report solely as an inactive textual reference.

Trading Policy

Company has adopted an insider trading policy which governs transactions in our securities by the Company and its directors, officers,

employees, consultants, and contractors and is designed to promote compliance with insider trading laws, rules and regulations applicable

to the Company.

The Company has adopted an insider trading policy which governs transactions in our securities by the Company and its directors, officers, employees, consultants, and contractors and is reasonably designed to promote compliance with insider trading laws, rules and regulations applicable to the Company.

Our insider trading policy is filed with this Annual Report as Exhibit 19.1.

71 unchanged sentences

provide that, to the fullest extent permitted by applicable law:

(i) no individual serving as a director or an officer shall have

any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar

(i) no individual serving as a director or an officer shall have any

duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar

business activities or lines of business as us;

6 unchanged sentences

See “Part I, Item 1A.

Risk Factors — Risks Relating to Sponsor

HoldCo, our Sponsor and Management Team — Certain of our directors and officers are now, and all of them may in the future

become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may

have conflicts of interest in determining to which entity a particular business opportunity should be presented.” We do not believe,

however, that any of the foregoing fiduciary duties or contractual obligations will materially affect our ability to identify and pursue

business combination opportunities or complete our initial business combination.

Risk Factors - Risks Relating to Sponsor HoldCo, our

Sponsor and Management Team - Certain of our directors and officers are now, and all of them may in the future become, affiliated with

entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest

in determining to which entity a particular business opportunity should be presented.” We do not believe, however, that any of

the foregoing fiduciary duties or contractual obligations will materially affect our ability to identify and pursue business combination

opportunities or complete our initial business combination.

investors should also be aware of the following potential conflicts of interest:

11 unchanged sentences

shareholders have agreed to waive their redemption rights with respect to their founder shares

if we fail to consummate our initial business combination within 18 months after the

closing of our initial public offering (or 24 months from the closing of our initial

public offering if we have executed a definitive agreement for an initial business combination

within 18 months from the closing of our initial public offering) or during any Extension

However, if our sponsor or initial shareholders (or any of our directors, officers

or affiliates) acquire public shares, they will be entitled to liquidating distributions

from the trust account with respect to such public shares if we fail to consummate our initial

business combination within the prescribed time frame.

If we do not complete our initial

business combination within such applicable time period, the proceeds of the sale of the

private placement units and restricted Class A shares held in the trust account will

be used to fund the redemption of our public shares, and the private placement units will

expire worthless.

With certain limited exceptions, the founder shares will not be transferable,

assignable or salable by our initial shareholders until 180 days after completion of

our initial business combination.

With certain limited exceptions, the private placement

units (including the underlying private placement warrants, the private placement shares

and the Class A ordinary shares issuable upon exercise of the private placement warrants),

will not be transferable, assignable or salable by our sponsor or Sponsor HoldCo until 180 days

after the completion of our initial business combination.

With certain limited exceptions,

the restricted Class A shares will not be transferable, assignable or salable by our

initial shareholders until 90 days after completion of our initial business combination.

Since our sponsor and directors and officers may directly or indirectly own ordinary shares

and warrants and will directly or indirectly own founder shares following our initial public

offering, our directors and officers may have a conflict of interest in determining whether

a particular target business is an appropriate business with which to effectuate our initial

if we fail to consummate our initial business combination within 24 months after the closing

of our initial public offering or during any Extension Period.

However, if our sponsor or

initial shareholders (or any of our directors, officers or affiliates) acquire public shares,

they will be entitled to liquidating distributions from the trust account with respect to

such public shares if we fail to consummate our initial business combination within the prescribed

If we do not complete our initial business combination within such applicable

time period, the proceeds of the sale of the private placement units and restricted Class

A shares held in the trust account will be used to fund the redemption of our public shares,

and the private placement units will expire worthless.

With certain limited exceptions, the

founder shares will not be transferable, assignable or salable by our initial shareholders

until 180 days after completion of our initial business combination.

With certain limited

exceptions, the private placement units (including the underlying private placement warrants,

the private placement shares and the Class A ordinary shares issuable upon exercise of the

private placement warrants), will not be transferable, assignable or salable by our sponsor

or Sponsor HoldCo until 180 days after the completion of our initial business combination.

With certain limited exceptions, the restricted Class A shares will not be transferable,

assignable or salable by our initial shareholders until 90 days after completion of our initial

business combination.

Since our sponsor and directors and officers may directly or indirectly

own ordinary shares and warrants and will directly or indirectly own founder shares following

our initial public offering, our directors and officers may have a conflict of interest in

determining whether a particular target business is an appropriate business with which to

effectuate our initial business combination.

directors and officers may negotiate employment or consulting agreements with a target business

13 unchanged sentences

(i) an aggregate of £40,000, which Mr.

Rackind disbursed to the Borrower in two

disbursements of £20,000 each on July 1, 2024 and August 5, 2024, respectively, and

(ii) £160,000 upon the consummation of our initial public offering.

of the Cash Method (as defined below) only, the Note bears interest on the principal amount

outstanding thereunder at a rate of eight percent per annum, and the Note is due and payable

in full upon the consummation of the initial business combination either, at the payment

method election of the Borrower, (i) in cash in an amount equal to the sum of (A) the

aggregate principal amount outstanding under the Note and (B) accrued interest, which

amount shall not be greater than the sum of £200,000 and accrued interest (such payment

method, the “Cash Method”), or (ii) in kind by transferring to Mr.

or his designee 25% of the aggregate amount of membership interests of our sponsor held directly

or indirectly by the Borrower.

In the event that we liquidate and dissolve without having

consummated an initial business combination, the Borrower shall have no obligation to repay

the principal amount outstanding under the Note or any accrued interest.

The Note contains

certain customary events of default and related remedies and acceleration provisions.

Rackind disbursed to the Borrower in two disbursements

of £20,000 each on July 1, 2024 and August 5, 2024, respectively, and (ii) £160,000

upon the consummation of our initial public offering.

For purposes of the Cash Method (as

defined below) only, the Note bears interest on the principal amount outstanding thereunder

at a rate of eight percent per annum, and the Note is due and payable in full upon the consummation

of the initial business combination either, at the payment method election of the Borrower,

(i) in cash in an amount equal to the sum of (A) the aggregate principal amount outstanding

under the Note and (B) accrued interest, which amount shall not be greater than the sum of

£200,000 and accrued interest (such payment method, the “Cash Method”),

or (ii) in kind by transferring to Mr.

Rackind or his designee 25% of the aggregate amount

of membership interests of our sponsor held directly or indirectly by the Borrower.

event that we liquidate and dissolve without having consummated an initial business combination,

the Borrower shall have no obligation to repay the principal amount outstanding under the

Note or any accrued interest.

The Note contains certain customary events of default and related

remedies and acceleration provisions.

conflicts described above may not be resolved in our favor.

3 unchanged sentences

and officers and certain of our affiliates currently have fiduciary duties or contractual obligations that may present a conflict of

Entity’s Business

Robert Rackind

Complete Solaria, Inc.

Solar technology, services and installation company

Specialized financing company in natural products industry

Managing Member

technology, services and installation company

financing company in natural products industry

Pavilion Entertainment

Television and film production and distribution company

Investor and advisor

Nell Cady-Kruse

Varagon Capital Corp.

Business development company

No One Left Behind

Charitable organization focusing on supporting former interpreters and U.S.

government employees eligible for the Iraqi and Afghan Special Immigrant Visa

Member of Senior Advisory Board

Public Investment Fund of Saudi Arabia (PIF)

Sovereign wealth fund

Member of Board Risk Committee

Hella Alashkar

Safra Sarasin

Head of Direct Private Investments

Venture capital firm with consulting and advisory services

and film production and distribution company

Capital Corp.

development company

One Left Behind

organization focusing on supporting former interpreters and U.S.

government employees eligible for the Iraqi and Afghan Special

Immigrant Visa

of Senior Advisory Board

capital firm with consulting and advisory services

are not prohibited from pursuing an initial business combination with a company that is affiliated with either of Sponsor HoldCo, our

22 unchanged sentences

The non-managing HoldCo investors are not required to (i) hold any units,

Class A ordinary shares or public warrants they may purchase in our initial public offering or thereafter for any amount of time,

(ii) vote any Class A ordinary shares they may own at the applicable time in favor of our initial business combination or (iii) refrain

from exercising their right to redeem their public shares at the time of our initial business combination.

Class A ordinary shares or public warrants they may purchase in our initial public offering or thereafter for any amount of time, (ii)

vote any Class A ordinary shares they may own at the applicable time in favor of our initial business combination or (iii) refrain from

exercising their right to redeem their public shares at the time of our initial business combination.

The non-managing HoldCo investors

will have the same rights to the funds held in the trust account with respect to the Class A ordinary shares underlying the units

they may purchase in our initial public offering as the rights afforded to our other public shareholders.

will have the same rights to the funds held in the trust account with respect to the Class A ordinary shares underlying the units they

may purchase in our initial public offering as the rights afforded to our other public shareholders.

on Liability and Indemnification of Officers and Directors

13 unchanged sentences

Accordingly, any indemnification

provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate

an initial business combination.

provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an

initial business combination.

indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their

21 unchanged sentences

Other than quarterly audit committee review of such reimbursements, we do not

expect to have any additional controls in place governing our reimbursement payments to our directors and officers for their out-of-pocket expenses

incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination.

Other than these payments and reimbursements and other than as set forth under “The Offering — Limited Payments to Insiders,”

in our prospectus filed in connection with our initial public offering, no compensation of any kind, including finder’s and consulting

fees, will be paid by the company to Sponsor HoldCo, our sponsor, directors and officers, or our or any of their respective affiliates,

prior to completion of our initial business combination.

expect to have any additional controls in place governing our reimbursement payments to our directors and officers for their out-of-pocket

expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business

Other than these payments and reimbursements and other than as set forth under “The Offering - Limited Payments to

Insiders,” in our prospectus filed in connection with our initial public offering, no compensation of any kind, including finder’s

and consulting fees, will be paid by the company to Sponsor HoldCo, our sponsor, directors and officers, or our or any of their respective

affiliates, prior to completion of our initial business combination.

the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting,

22 unchanged sentences

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

following table sets forth information regarding the beneficial ownership of our ordinary shares available to us at March 25, 2025,

following table sets forth information regarding the beneficial ownership of our ordinary shares available to us at March 12, 2026, by:

person known by us to be the beneficial owner of more than 5% of our outstanding ordinary

4 unchanged sentences

The following table does not reflect record or beneficial ownership of (i) the private placement warrants

underlying the private placement units as such private placement warrants are not exercisable within 60 days of the date of this

prospectus, or (ii) the restricted Class A shares as they will vest upon the consummation of the initial business combination.

and Address of Beneficial Owner (1)

Percentage of

and Outstanding

affiliated with TD Securities (USA) LLC (3)

of Ontario Pension Plan Trust Fund (4)

affiliated with LMR Partners LLP (5)

affiliated with AQR Capital Management, LLC (6)

affiliated with Kepos Capital LP (7)

affiliated with Magnetar Financial LLC (8)

Acquisition LLC (Sponsor HoldCo) (9)(10)

underlying the private placement units as such private placement warrants are not exercisable within 60 days of the date of this Annual

Report, or (ii) the restricted Class A shares as they will vest upon the consummation of the initial business combination.

Name and Address of Beneficial Owner (1)

Approximate Percentage of

Issued and Outstanding

Ordinary Shares

Entities affiliated with AQR Capital Management, LLC (3)

Mahoney Asset Management (4)

FACT II Acquisition LLC (Sponsor HoldCo) (6)(7)

6,035,833 (2)

directors and officers as a group (6 individuals)

Robert Rackind (9)

Adam Gishen (6)

Nell Cady-Kruse

Hella Alashkar

All directors and officers as a group (6 individuals)

than one percent.

3 unchanged sentences

shown consist solely of founder shares, classified as Class B ordinary shares.

shares will convert into Class A ordinary shares on a one-for-one basis, subject to

adjustment, as described in the Description of Securities, which is filed as Exhibit 4.5

to this Annual Report.

solely on information provided in a Schedule 13G filed on March 7, 2025.

The address of TD

Securities (USA) LLC’s (“TDS”) principal office and Toronto Dominion Holdings

USA Inc.’s principal office is One Vanderbilt Avenue, New York, New York 10017.

address of TD Group US Holdings LLC’s principal office is 251 Little Falls Drive, Wellington,

Delaware 19808.

The address of Toronto Dominion Bank’s principal office is Toronto-Dominion

Centre, 66 Wellington Street West, 12th Floor, TD Tower, Toronto, Ontario, Canada M5K 1A2.

TDS has the sole power to vote or direct the vote and the sole power to dispose or direct

the disposition of these shares.

solely on information provided in a Schedule 13G filed on February 14, 2025 by Healthcare

of Ontario Pension Plan Trust Fund.

The business address of Healthcare of Ontario Pension

Plan Trust Fund is 1 York Street, Suite 1900, Toronto, Ontario, Canada M5J 0B6.

solely on information provided in a Schedule 13G filed on February 14, 2025, on behalf of

LMR Partners LLP, LMR Partners Limited, LMR Partners LLC, LMR Partners AG, LMR Partners (DIFC)

Limited and LMR Partners (Ireland) Limited (collectively, the “LMR Investment Managers”),

Ben Levine and Stefan Renold (together with the LMR Investment Managers, the “LMR Reporting

The shares beneficially owned by the LMR Reporting Persons are directly

held by LMR Multi-Strategy Master Fund Limited (“LMR Master Fund”) and LMR CCSA

Master Fund Ltd (“LMR CCSA Master Fund”).

Each of LMR Master Fund and LMR CCSA

Master Fund acquired 500,000 units of the Company in the Company’s initial public offering.

The LMR Investment Managers serve as the investment managers to certain funds, including,

without limitation LMR Master Fund and LMR CCSA Master Fund.

Levine and Mr.

ultimately in control of the investment and voting decisions of the LMR Investment Managers

with respect to the securities held by certain funds, including LMR Master Fund and LMR CCSA

LMR Partners LLP is a United Kingdom limited liability partnership;

Limited is a Hong Kong corporation;

LMR Partners LLC is a Delaware limited liability company;

LMR Partners AG is a Swiss corporation;

LMR Partners (DIFC) Limited is a United Arab Emirates

LMR Partners (Ireland) Limited is a limited company incorporated in Ireland;

Ben Levine is a citizen of the United Kingdom;

and Stefan Renold is a citizen of Switzerland.

The business address of each of the LMR Reporting Persons is c/o LMR Partners LLP, 9th Floor,

Devonshire House, 1 Mayfair Place, London, W1J8AJ, United Kingdom.

solely on information contained in a Schedule 13G filed on February 14, 2025, by or on behalf

will convert into Class A ordinary shares on a one-for-one basis, subject to adjustment,

as described in the Description of Securities, which is filed as Exhibit 4.5 to this Annual

solely on information contained in a Schedule 13G filed on May 14, 2025, by or on behalf

of AQR Capital Management, LLC (“AQR”), AQR Capital Management Holdings, LLC

3 unchanged sentences

Suite 130, Greenwich, CT 06830.

solely on information contained in a Schedule 13G filed on February 12, 2025, by Kepos Capital

LP (the “Investment Manager”), a Delaware limited partnership, and the investment

adviser to certain funds and accounts (the “Kepos Funds”), with respect to the

securities of the Company directly held by the Kepos Funds;

Mark Carhart, the managing

member of Kepos Capital GP LLC, the general partner of the Investment Manager, with respect

to the securities of the Company directly held by the Kepos Funds.

The Investment Manager

is a Delaware limited partnership.

Carhart is a citizen of the United States.

of the business office of each of the Investment Manager and Mr.

Carhart is 11 Times Square,

35th Floor, New York, New York 10036.

solely on information contained in a Schedule 13G filed on January 29, 2025, by or on behalf

of Magnetar Financial LLC (“Magnetar Financial”), Magnetar Capital Partners LP

(“Magnetar Capital Partners”), Supernova Management LLC (“Supernova Management”)

Snyderman (“Mr.

Snyderman”), each of which share voting and dispositive

power with respect to the reported securities.

The securities are held for Magnetar Constellation

Master Fund, Ltd (“Constellation Master Fund”), Magnetar Xing He Master Fund

Ltd (“Xing He Master Fund”), Magnetar SC Fund Ltd (“SC Fund”), Purpose

Alternative Credit Fund Ltd (“Purpose Credit Fund”), all Cayman Islands exempted

Magnetar Structured Credit Fund, LP (“Structured Credit Fund”) a Delaware

limited partnership;

Magnetar Alpha Star Fund LLC (“Alpha Star Fund”), Magnetar

Lake Credit Fund LLC (“Lake Credit Fund”), Purpose Alternative Credit Fund -

T LLC (“Purpose Credit Fund – T”), all Delaware limited liability companies;

collectively (the “Magnetar Funds”).

Magnetar Financial serves as the investment

adviser to the Magnetar Funds, and as such, Magnetar Financial exercises voting and investment

power over the securities held for the Magnetar Funds’ accounts.

Magnetar Capital Partners

serves as the sole member and parent holding company of Magnetar Financial.

Supernova Management

is the general partner of Magnetar Capital Partners.

The manager of Supernova Management

The address of the principal business office of each of Magnetar Financial,

Magnetar Capital Partners, Supernova Management, and Mr.

Snyderman is 1603 Orrington Avenue,

13th Floor, Evanston, Illinois 60201.

solely on information contained in a Schedule 13G filed on May 13, 2025, by Picton Mahoney

Asset Management.

The address of the business office of Picton Mahoney Asset Management is

33 Yonge Street, #320, Toronto, ON M5E 1G4 Canada.

solely on information contained in a Schedule 13G filed on May 13, 2025, by Barclays PLC.

The address of the business office of Barclays PLC is 1 Churchill Place, London - E14 5HP.

HoldCo is the record holder of 5,613,333 founder shares.

13 unchanged sentences

shares held by Sponsor HoldCo.

non-managing HoldCo investors have (A) purchased approximately $88 million of the units in our initial public offering at the offering price and (B) purchased, indirectly through

the purchase of non-managing Sponsor HoldCo membership interests, (i) an aggregate of

260,000 private placement units at a price of $10.00 per unit and (ii) 162,500 private

placement units and 325,000 restricted Class A shares, which shares would vest only

upon the consummation of the initial business combination, at a combined price of $10.00

per private placement security ($4,225,000 in the aggregate), reflecting the issuance of

restricted Class A shares at no additional price;

subject to each non-managing HoldCo

investor purchasing, indirectly through Sponsor HoldCo, the private placement units or private

placement securities, as applicable, allocated to it Sponsor HoldCo issued membership interests

at a nominal purchase price to the non-managing HoldCo investors at the closing of our initial

public offering reflecting interests in an aggregate of 5,593,333 founder shares and 325,000

restricted Class A shares, as applicable, held by Sponsor HoldCo.

Sponsor HoldCo has agreed

to reserve 20,000 founder shares to sell and transfer to a senior advisor of the Company,

following the consummation of an initial business combination, in consideration for advisory

services to be provided by such senior advisor to the Company in connection with the initial

business combination;

the aforementioned 5,593,333 founder shares excludes such reserved

20,000 founder shares.

The non-managing HoldCo investors are not granted any shareholder

or other rights in addition to those afforded to our other public shareholders, and will

only be issued membership interests in Sponsor HoldCo, with no right to control Sponsor HoldCo

or vote or dispose of any securities held by Sponsor HoldCo, including the founder shares

held by Sponsor HoldCo.

non-managing HoldCo investors have (A) purchased approximately $88 million of the units in

our initial public offering at the offering price and (B) purchased, indirectly through the

purchase of non-managing Sponsor HoldCo membership interests, (i) an aggregate of 260,000

private placement units at a price of $10.00 per unit and (ii) 162,500 private placement

units and 325,000 restricted Class A shares, which shares would vest only upon the consummation

of the initial business combination, at a combined price of $10.00 per private placement

security ($4,225,000 in the aggregate), reflecting the issuance of restricted Class A shares

at no additional price;

subject to each non-managing HoldCo investor purchasing, indirectly

through Sponsor HoldCo, the private placement units or private placement securities, as applicable,

allocated to it Sponsor HoldCo issued membership interests at a nominal purchase price to

the non-managing HoldCo investors at the closing of our initial public offering reflecting

interests in an aggregate of 5,593,333 founder shares and 325,000 restricted Class A shares,

as applicable, held by Sponsor HoldCo.

Sponsor HoldCo has agreed to reserve 20,000 founder

shares to sell and transfer to a senior advisor of the Company, following the consummation

of an initial business combination, in consideration for advisory services to be provided

by such senior advisor to the Company in connection with the initial business combination;

the aforementioned 5,593,333 founder shares excludes such reserved 20,000 founder shares.

The non-managing HoldCo investors are not granted any shareholder or other rights in addition

to those afforded to our other public shareholders, and will only be issued membership interests

in Sponsor HoldCo, with no right to control Sponsor HoldCo or vote or dispose of any securities

held by Sponsor HoldCo, including the founder shares held by Sponsor HoldCo.

(8) Interests

shown consist of (i) 5,613,333 founder shares, classified as Class B ordinary shares,

which will convert into Class A ordinary shares on a one-for-one basis, subject to adjustment,

as described in the Description of Securities, which is filed as Exhibit 4.5 to this Annual

Report, and (ii) 422,500 private placement shares underlying the 422,500 private placement

units purchased by Sponsor HoldCo simultaneously with the closing of our initial public offering.

(12) Interest

shown consist of (i) 5,613,333 founder shares, classified as Class B ordinary shares, which will convert into Class A ordinary shares

on a one-for-one basis, subject to adjustment, as described in the Description of Securities, which is filed as Exhibit 4.5 to this Annual

Report, and (ii) 422,500 private placement shares underlying the 422,500 private placement units purchased by Sponsor HoldCo simultaneously

with the closing of our initial public offering.

shown is related to Robert Rackind’s service as our Executive Chairman.

Rackind holds Class B membership units in Sponsor HoldCo as a non-managing

HoldCo investor.

Rackind holds Class B membership units in Sponsor HoldCo as a non-managing HoldCo investor.

initial shareholders will have the right to elect all of our directors prior to our initial business combination as a result of holding

5 unchanged sentences

and articles of association and approval of significant corporate transactions.

sponsor purchased an aggregate of 440,000 private placement units at a price of $10.00 per unit ($4,400,000 in the aggregate) in a

private placement that closed simultaneously with the closing of our initial public offering.

Such commitment is comprised of

(i) 17,500 private placement units at a price of $10.00 per unit ($175,000 in the aggregate), and (ii) an investment

through Sponsor HoldCo of (a) an aggregate of 260,000 private placement units at a price of $10.00 per unit and

(ii) 162,500 private placement units and 325,000 restricted Class A shares at a combined price of $10.00 per private

placement security ($4,225,000 in the aggregate), reflecting the issuance of restricted Class A shares at no additional price.

purchased an aggregate of 178,500 private placement units at a price of $10.00 per unit ($1,785,000 in the aggregate) in a private

sponsor purchased an aggregate of 440,000 private placement units at a price of $10.00 per unit ($4,400,000 in the aggregate) in a private

placement that closed simultaneously with the closing of our initial public offering.

Additionally, Seaport purchased an aggregate

of 44,625 private placement units at a price of $10.00 per unit ($446,250 in the aggregate) in a private placement that closed

simultaneously with the closing of our initial public offering.

Certain non-managing HoldCo investors have (A) purchased an

aggregate of approximately $88 million of the units in our initial public offering at the offering price and (B) purchased,

indirectly through the purchase of non-managing Sponsor HoldCo membership interests, (i) an aggregate of 260,000 private

placement units at a price of $10.00 per unit and (ii) 162,500 private placement units and 325,000 restricted Class A

shares at a combined price of $10.00 per private placement security ($4,225,000 in the aggregate), reflecting the issuance of

restricted Class A shares at no additional price, in each case in a private placement that closed simultaneously with the

closing of our initial public offering;

Such commitment is comprised of (i) 17,500

private placement units at a price of $10.00 per unit ($175,000 in the aggregate), and (ii) an investment through Sponsor HoldCo

of (a) an aggregate of 260,000 private placement units at a price of $10.00 per unit and (ii) 162,500 private placement units

and 325,000 restricted Class A shares at a combined price of $10.00 per private placement security ($4,225,000 in the aggregate),

reflecting the issuance of restricted Class A shares at no additional price.

CCM purchased an aggregate of 178,500 private placement

units at a price of $10.00 per unit ($1,785,000 in the aggregate) in a private placement that closed simultaneously with the closing

of our initial public offering.

Additionally, Seaport purchased an aggregate of 44,625 private placement units at a price of $10.00 per

unit ($446,250 in the aggregate) in a private placement that closed simultaneously with the closing of our initial public offering.

non-managing HoldCo investors have (A) purchased an aggregate of approximately $88 million of the units in our initial public offering

at the offering price and (B) purchased, indirectly through the purchase of non-managing Sponsor HoldCo membership interests, (i) an

aggregate of 260,000 private placement units at a price of $10.00 per unit and (ii) 162,500 private placement units and 325,000

restricted Class A shares at a combined price of $10.00 per private placement security ($4,225,000 in the aggregate), reflecting

the issuance of restricted Class A shares at no additional price, in each case in a private placement that closed simultaneously

with the closing of our initial public offering;

of such aggregate amount, a purchase, indirectly through the purchase of non-managing

Sponsor HoldCo membership interests, of 260,000 private placement units (at an aggregate price of $2,600,000) were from investors

identified by, and from among the extensive professional network of, our leadership team and the team members of our sponsor.

Subject to each non-managing HoldCo investor purchasing, indirectly through Sponsor HoldCo, the private placement units or private

placement securities, as applicable, allocated to it, Sponsor HoldCo issued membership interests at a nominal purchase price to the

non-managing HoldCo investors reflecting interests in an aggregate of 5,593,333 founder shares and 325,000 restricted Class A

shares, as applicable, held by Sponsor HoldCo.

Sponsor HoldCo has agreed to reserve 20,000 founder shares to sell and transfer to

our Senior Advisor, following the consummation of an initial business combination, in consideration for advisory services to be

provided by such senior advisor to the Company in connection with the initial business combination;

the aforementioned 5,593,333

founder shares excludes such reserved 20,000 founder shares.

Sponsor HoldCo membership interests, of 260,000 private placement units (at an aggregate price of $2,600,000) were from investors identified

by, and from among the extensive professional network of, our leadership team and the team members of our sponsor.

Subject to each non-managing

HoldCo investor purchasing, indirectly through Sponsor HoldCo, the private placement units or private placement securities, as applicable,

allocated to it, Sponsor HoldCo issued membership interests at a nominal purchase price to the non-managing HoldCo investors reflecting

interests in an aggregate of 5,593,333 founder shares and 325,000 restricted Class A shares, as applicable, held by Sponsor HoldCo.

Sponsor HoldCo has agreed to reserve 20,000 founder shares to sell and transfer to our Senior Advisor, following the consummation of

an initial business combination, in consideration for advisory services to be provided by such senior advisor to the Company in connection

with the initial business combination;

the aforementioned 5,593,333 founder shares excludes such reserved 20,000 founder shares.

Authorized for Issuance under Equity Compensation Plans

Certain Relationships and Related Transactions, and Director Independence.

9 unchanged sentences

price to the non-managing HoldCo investors reflecting interests in an aggregate of 5,593,333 founder shares held by Sponsor HoldCo.

Sponsor HoldCo has agreed to reserve 20,000 founder shares to transfer and sell to a senior advisor of the Company, following the consummation

HoldCo has agreed to reserve 20,000 founder shares to transfer and sell to a senior advisor of the Company, following the consummation

of an initial business combination, in consideration for advisory services to be provided by such senior advisor of the Company in connection

6 unchanged sentences

See “Part II, Item 7.

Management’s Discussion and Analysis of

Financial Condition and Results of Operation – Liquidity and Capital Resources.”

sponsor purchased an aggregate of 440,000 private placement units at a price of $10.00 per unit ($4,400,000 in the aggregate) in a

private placement that closed simultaneously with the closing of our initial public offering.

Such commitment is comprised of

(i) a direct purchase by our sponsor of 17,500 private placement units at a price of $10.00 per unit ($175,000 in the

aggregate), and (ii) a purchase through Sponsor HoldCo of (a) an aggregate of 260,000 private placement units at a price

of $10.00 per unit and (b) 162,500 private placement units and 325,000 restricted Class A shares ($4,225,000 in the aggregate).

CCM purchased an aggregate of 178,500 private placement units at a price of $10.00 per unit ($1,785,000 in the aggregate) in a

private placement that closed simultaneously with the closing of our initial public offering.

Additionally, Seaport purchased an

aggregate of 44,625 private placement units at a price of $10.00 per unit ($446,250 in the aggregate) in a private placement that

closed simultaneously with the closing of our initial public offering.

Certain non-managing HoldCo investors have

(A) purchased approximately $88 million of the units in our initial public offering at the offering price and

(B) purchased, indirectly through the purchase of non-managing Sponsor HoldCo membership interests, (i) an aggregate

of 260,000 private placement units at a price of $10.00 per unit and (ii) 162,500 private placement units and 325,000

restricted Class A shares at a combined price of $10.00 per private placement security ($4,225,000 in the aggregate),

reflecting the issuance of restricted Class A shares at no additional price, in each case in a private placement that closed

simultaneously with the closing of our initial public offering;

of such aggregate amount, purchases, indirectly through the purchase

of non-managing Sponsor HoldCo membership interests, of 260,000 private placement units (at an aggregate price of $2,600,000)

were from investors identified by, and from among the extensive professional network of, our leadership team and the team members of

Management’s Discussion and Analysis

of Financial Condition and Results of Operation - Liquidity and Capital Resources.”

sponsor purchased an aggregate of 440,000 private placement units at a price of $10.00 per unit ($4,400,000 in the aggregate) in a private

placement that closed simultaneously with the closing of our initial public offering.

Such commitment is comprised of (i) a direct purchase

by our sponsor of 17,500 private placement units at a price of $10.00 per unit ($175,000 in the aggregate), and (ii) a purchase through

Sponsor HoldCo of (a) an aggregate of 260,000 private placement units at a price of $10.00 per unit and (b) 162,500 private placement

units and 325,000 restricted Class A shares ($4,225,000 in the aggregate).

CCM purchased an aggregate of 178,500 private placement units

at a price of $10.00 per unit ($1,785,000 in the aggregate) in a private placement that closed simultaneously with the closing of our

initial public offering.

Additionally, Seaport purchased an aggregate of 44,625 private placement units at a price of $10.00 per unit

($446,250 in the aggregate) in a private placement that closed simultaneously with the closing of our initial public offering.

non-managing HoldCo investors have (A) purchased approximately $88 million of the units in our initial public offering at the offering

price and (B) purchased, indirectly through the purchase of non-managing Sponsor HoldCo membership interests, (i) an aggregate of 260,000

private placement units at a price of $10.00 per unit and (ii) 162,500 private placement units and 325,000 restricted Class A shares

at a combined price of $10.00 per private placement security ($4,225,000 in the aggregate), reflecting the issuance of restricted Class

A shares at no additional price, in each case in a private placement that closed simultaneously with the closing of our initial public

of such aggregate amount, purchases, indirectly through the purchase of non-managing Sponsor HoldCo membership interests, of

260,000 private placement units (at an aggregate price of $2,600,000) were from investors identified by, and from among the extensive

professional network of, our leadership team and the team members of our sponsor.

October 14, 2024, a member of our sponsor (the “Borrower”), issued a promissory note in the principal amount of up to £200,000

£200,000 (the “Note”) to Robert Rackind, our Executive Chairman.

Pursuant to the Note, Mr.

Rackind agreed to lend

to the Borrower, (i) an aggregate of £40,000, which Mr.

Rackind disbursed to the Borrower in two disbursements of £20,000

each on July 1, 2024 and August 5, 2024, respectively, and (ii) £160,000 upon the consummation of our initial public

For purposes of the Cash Method (as defined below) only, the Note bears interest on the principal amount outstanding thereunder

at a rate of eight percent per annum, and the Note is due and payable in full upon the consummation of the initial business combination

either, at the payment method election of the Borrower, (i) in cash in an amount equal to the sum of (A) the aggregate principal

amount outstanding under the Note and (B) accrued interest, which amount shall not be greater than the sum of £200,000 and

accrued interest (such payment method, the “Cash Method”), or (ii) in kind by transferring to Mr.

Rackind or his

designee 25% of the aggregate amount of membership interests of our sponsor held directly or indirectly by the Borrower.

that we liquidate and dissolve without having consummated an initial business combination, the Borrower shall have no obligation to repay

the principal amount outstanding under the Note or any accrued interest.

The Note contains certain customary events of default and related

remedies and acceleration provisions.

purchased, from Sponsor Holdco, Class B membership units in Sponsor HoldCo for an aggregate principal amount of $50,000, and is

a non-managing HoldCo investor.

(the “Note”) to Robert Rackind, our Executive Chairman, who is the Borrower’s father-in-law.

Pursuant to the Note,

Rackind agreed to lend to the Borrower, (i) an aggregate of £40,000, which Mr.

Rackind disbursed to the Borrower in two disbursements

of £20,000 each on July 1, 2024 and August 5, 2024, respectively, and (ii) £160,000 upon the consummation of our initial

public offering.

For purposes of the Cash Method (as defined below) only, the Note bears interest on the principal amount outstanding

thereunder at a rate of eight percent per annum, and the Note is due and payable in full upon the consummation of the initial business

combination either, at the payment method election and in the sole discretion of the Borrower, (i) on the date the Business Combination

is consummated in cash in an amount equal to the sum of (A) the aggregate principal amount outstanding under the Note and (B) accrued

interest, which amount shall not be greater than the sum of £200,000 and accrued interest (such payment method, the “Cash

Method”), or (ii) in kind by selling (in one or multiple transactions) all of the Class B ordinary shares (including such

other securities that the founder shares are convertible into upon consummation of the Business Combination) to which Borrower is indirectly

entitled pursuant to his membership interests of our sponsor and remitting to Mr.

Rackind or his designee, promptly upon receipt, 25%

of the aggregate amount of the proceeds actually received by Borrower from such sale, commencing upon expiry of any contractual or regulatory

lock-up restrictions existing on the founder shares.

The Borrower shall remain the sole owner of any such Class B ordinary shares

(including such other securities that the founder shares are convertible into upon consummation of the Business Combination) held by

him until he sells such Class B ordinary shares, and Mr.

Rackind shall have no right to direct or control the timing, price,

method or quantity of any sale by the Borrower of such Class B ordinary shares, nor shall Mr.

Rackind have any security interest

in any such Class B ordinary shares held by the Borrower.

In the event that we liquidate and dissolve without having consummated

an initial business combination, the Borrower shall have no obligation to repay the principal amount outstanding under the Note or any

accrued interest.

The Note contains certain customary events of default and related remedies and acceleration provisions.

Rackind purchased, from Sponsor Holdco, Class B membership units in Sponsor HoldCo for an aggregate principal amount of $50,000, and

is a non-managing HoldCo investor.

discussed in “Part III, Item 11.

Directors, Executive Officers and Corporate Governance — Conflicts of Interest,”

if any of our directors or officers becomes aware of a business combination opportunity that falls within the line of business of any

entity to which he or she has then-current fiduciary or contractual obligations, he or she may be required to present such business

combination opportunity to such entity prior to presenting such business combination opportunity to us.

Our directors and officers currently

have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

Directors, Executive Officers and Corporate Governance - Conflicts of Interest,” if any

of our directors or officers becomes aware of a business combination opportunity that falls within the line of business of any entity

to which he or she has then-current fiduciary or contractual obligations, he or she may be required to present such business combination

opportunity to such entity prior to presenting such business combination opportunity to us.

Our directors and officers currently have

certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

of our management team and our board of directors directly or indirectly own founder shares and/or private placement units following

20 unchanged sentences

the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts.

to $2,000,000 of such loans may be convertible into Class A ordinary shares or units upon the consummation of our initial business

combination at a price of $10.00 per Class A ordinary share or unit, as applicable, at the option of the lender.

ordinary shares would be identical to the private placement shares, and such units would be identical to the private placement units.

The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.

We do not expect

to seek loans from parties other than Sponsor HoldCo, our sponsor or an affiliate of either of Sponsor HoldCo or our sponsor, as we do

not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds

in our trust account.

to $2,000,000 of such loans may be convertible into Class A ordinary shares or units upon the consummation of our initial business combination

at a price of $10.00 per Class A ordinary share or unit, as applicable, at the option of the lender.

Such Class A ordinary shares would

be identical to the private placement shares, and such units would be identical to the private placement units.

The terms of such loans,

if any, have not been determined and no written agreements exist with respect to such loans.

We do not expect to seek loans from parties

other than Sponsor HoldCo, our sponsor or an affiliate of either of Sponsor HoldCo or our sponsor, as we do not believe third parties

will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting,

8 unchanged sentences

it will be up to the directors of the post-combination business to determine executive officer and director compensation.

holders of the (i) founder shares, (ii) private placement units, Class A ordinary shares underlying the private placement

units, private placement warrants underlying the private placement units and the Class A ordinary shares underlying such private

placement warrants, (iii) restricted Class A shares, and (iv) any private placement units that may be issued upon conversion

of working capital loans will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or

on the effective date of our initial public offering requiring us to register our securities held by them for resale (in the case of

the founder shares, only after conversion to our Class A ordinary shares, and in the case of the restricted Class A shares,

upon vesting after the consummation of the initial business combination).

holders of the (i) founder shares, (ii) private placement units, Class A ordinary shares underlying the private placement units, private

placement warrants underlying the private placement units and the Class A ordinary shares underlying such private placement warrants,

(iii) restricted Class A shares, and (iv) any private placement units that may be issued upon conversion of working capital loans will

be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of our

initial public offering requiring us to register our securities held by them for resale (in the case of the founder shares, only after

conversion to our Class A ordinary shares, and in the case of the restricted Class A shares, upon vesting after the consummation of the

initial business combination).

connection with the execution of the Business Combination Agreement, on November 26, 2025, Sponsor HoldCo entered into the Sponsor

Support Agreement with us and PAD.

Under the Sponsor Support Agreement, among other things, Sponsor HoldCo agreed to vote, at any

meeting of our shareholders, and in any action by written consent of our shareholders, all of its Class A ordinary shares and Class B

ordinary shares (i) in favor of each of the Business Combination Agreement, any ancillary document required by the Business Combination

Agreement, the Domestication and the Business Combination, including the Merger, and any other matters necessary or appropriate for consummation

of the Business Combination and (ii) against any proposal relating to an Alternative Transaction (as defined therein) or any proposal

that would be reasonably likely to materially impede, interfere with, delay or attempt to discourage, frustrate the purposes of, result

in a breach by PAD or us of, prevent or nullify any provision of the Business Combination Agreement.

In addition, the Sponsor Support

Agreement prohibits Sponsor HoldCo from, among other things, selling, assigning or transferring any Class A ordinary shares or Class B

ordinary shares held by it, other than pursuant to the terms of the Sponsor Support Agreement or as expressly contemplated by the Business

Combination Agreement, until the earlier of (a) the closing of the Business Combination and (b) the valid termination of the

Business Combination Agreement.

connection with the closing of the Business Combination (i) we, PAD, Sponsor HoldCo and certain holders of our equity interests

will each enter into a Sponsor Lock-Up Agreement, and (ii) we, PAD and certain holders of PAD’s equity interests will each

enter into a PAD Shareholder Lock-Up Agreement (together, with the Sponsor Lock-Up Agreement, the “Lock-Up Agreements”).

to the Lock-Up Agreements, Sponsor HoldCo, the holders of our equity interests signatory thereto, and the holders of PAD’s equity

interests signatory thereto, as applicable, will agree not to transfer (except for certain permitted transfers) (i) any PAD Shares

issuable upon the conversion of PAD equity interests or Class B ordinary shares, as applicable, and held by such holders after the

Closing until 180 days after the Closing Date and (ii) any PAD Shares issuable upon conversion of shares of restricted Class A

ordinary shares and held by such holders after the Closing until 90 days after the Closing Date.

November 26, 2025, we entered into the Advisory Agreement with our sponsor pursuant to which our sponsor will provide certain services

to us including, without limitation, in each case relating to the Business Combination, assisting us in preparing presentations, introducing

us to potential investors, assisting us in arranging meetings with stockholders of PAD to the extent applicable, and assisting us with

the preparation of any press releases and filings.

The Advisory Agreement provides for us to pay to our sponsor a fee of up to $240,000

(which, in our sole discretion, may be payable in up to 12 monthly installments).

The Advisory Agreement was reviewed and approved by

the our board of directors and our Audit Committee.

Party Transactions Policy

had not adopted a formal policy for the review, approval or ratification of related party transactions prior to our initial public offering.

Accordingly, the transactions discussed above were not reviewed, approved or ratified in accordance with any such policy.

have adopted our Code of Ethics, requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions

18 unchanged sentences

that our initial business combination is fair to our shareholders from a financial point of view.

In addition, pursuant to Nasdaq listing

rules, our initial business combination must be approved by a majority of our independent directors.

there will be no finder’s fees, reimbursements or cash payments made by us to Sponsor HoldCo, our sponsor, directors or officers,

43 unchanged sentences

December 31, 2024 financial statements included in this Annual Report on Form 10-K.

For the year ended December 31, 2025, fees for our

independent registered public accounting firm were approximately $105,000 for the services Withum performed in connection with the audit

of our financial statements for the year ended December 31, 2025.

Audit-Related

During the period from June 19, 2024 (inception) through December 31, 2024, our independent registered public accounting firm

did not render assurance and related services related to the performance of the audit or review of financial statements.

During the period from June 19, 2024 (inception) through December 31, 2024, our independent registered public accounting firm

did not render services to us for tax compliance, tax advice and tax planning.

During the period from June 19, 2024 (inception) through December 31, 2024, there were no fees billed for products and

services provided by our independent registered public accounting firm other than those set forth above.

During the period from June 19, 2024 (inception) through December 31, 2024 and for the year ended December 31, 2025, our independent

registered public accounting firm did not render assurance and related services related to the performance of the audit or review of

financial statements.

During the period from June 19, 2024 (inception) through December 31, 2024 and for the year ended December 31, 2025, our independent

registered public accounting firm did not render services to us for tax compliance, tax advice and tax planning.

During the period from June 19, 2024 (inception) through December 31, 2024 and for the year ended December 31, 2025,

there were no fees billed for products and services provided by our independent registered public accounting firm other than those set

audit committee was formed upon the consummation of our initial public offering.

7 unchanged sentences

Exhibits, Financial Statement Schedules.

following documents are filed as part of this Form 10-K:

Financial Statements:

Report of Independent Registered Public Accounting Firm

Balance Sheet

Statement of Operations

Statement of Changes in Shareholders’ Deficit

Statement of Cash Flows

Notes to Financial Statements

Financial Statement Schedules:

hereby file as part of this Annual Report the exhibits listed in the attached Exhibit Index.

Exhibits which are incorporated herein

by reference can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580,

Washington, D.C.

Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street,

N.E., Washington, D.C.

20549, at prescribed rates or on the SEC website at www.sec.gov.

(1) Financial

is made to the Index to Financial Statements of the Company under Item 8 of Part II above.

(2) Financial

Statement Schedules.

financial statement schedules are omitted because they are not applicable or the amounts are immaterial, not required, or the required

information is presented in the financial statements and notes thereto in Item 8 of Part II above.

(3) Exhibits.

exhibits listed in the Exhibit Index below are filed or incorporated by reference as part of this Annual Report on Form 10-K.

Exhibit Number

Business Combination Agreement, by and among FACT II Acquisition Corp., FACT II Acquisition LLC, Patriot Merger Subsidiary, Inc.

and Precision Aerospace & Defense Group, Inc., dated as of November 26, 2025 (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on December 3, 2025).

Amended and Restated Memorandum and Articles of Association (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 27, 2024).

3 unchanged sentences

Warrant Agreement, dated November 25, 2024, between the Company and Odyssey Transfer and Trust Company (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on November 27, 2024).

Description of Securities.

Description of Securities (incorporated herein by reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K filed on March 27, 2025).

Private Placement Units and Restricted Shares Subscription Agreement, dated November 25, 2024, between the Company and FACT II Acquisition LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 27, 2024).

5 unchanged sentences

Registration Rights Agreement, dated November 25, 2024, among the Company, the Sponsor, Sponsor HoldCo and the other Holders (as defined therein) signatory thereto (incorporated herein by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on November 27, 2024).

Agreement, dated November 25, 2024, among the Company, the Sponsor, Sponsor HoldCo, and each of the initial shareholders, directors and

officers of the Company (incorporated herein by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on

November 27, 2024) .

of Indemnity Agreement, November 25, 2024, between the Company and each of the officers and directors of the Company (incorporated herein

by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on November 27, 2024) .

Insider Trading Policy.

Letter Agreement, dated November 25, 2024, among the Company, the Sponsor, Sponsor HoldCo, and each of the initial shareholders, directors and officers of the Company (incorporated herein by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on November 27, 2024).

Form of Indemnity Agreement, November 25, 2024, between the Company and each of the officers and directors of the Company (incorporated herein by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on November 27, 2024).

Sponsor Support Agreement, dated as of November 26, 2025 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 3, 2025).

Form of PAD Support Agreement (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 3, 2025).

Form of Sponsor Lock-Up Agreement (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 3, 2025).

Form of PAD Shareholder Lock-Up Agreement (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on December 3, 2025).

Advisory Agreement, dated as of November 26, 2025 (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on December 3, 2025).

Insider Trading Policy (incorporated herein by reference to Exhibit 19.1 to the Company’s Annual Report on Form 10-K filed on March 27, 2025).

List of Subsidiaries (incorporated herein by reference to Exhibit 21.1.

to the Company’s Registration Statement on Form S-4 filed on January 2, 2026).

Power of Attorney (included on the signature page to this Annual Report on Form 10-K).

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

4 unchanged sentences

Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Compensation Recovery Policy.

Compensation Recovery Policy (incorporated herein by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed on March 27, 2025).

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because the XBRL tags are embedded within the Inline XBRL document.

5 unchanged sentences

Cover Page Interaction Data File (formatted as inline XBRL with application taxonomy extension information contained in Exhibit 101).

of the exhibits, schedules and similar attachments to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K.

Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

personally identifiable information has been omitted from this exhibit pursuant to Item 601(a)(6) of Regulation S-K.

Form 10-K Summary.

to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused

this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State

of New York, on the 27th day of March 2025.

FACT II ACQUISITION CORP.

/s/ Adam Gishen

Chief Executive Officer

to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this

Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of

New York, on the 13th day of March, 2026.

II ACQUISITION CORP.

Executive Officer

ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Adam Gishen and Min Lee, and each

of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution and full power

to act without the other, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments

to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with

the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each

and every act and thing requisite or necessary to be done in and about the premises hereby ratifying and confirming all that said attorneys-in-fact

and agents, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the

following persons on behalf of the registrant and in the capacities and on the dates indicated.

Chief Executive Officer and Director (Principal

Executive Officer)

March 27, 2025

Chief Financial Officer (Principal Financial

and Accounting Officer)

March 27, 2025

Robert Rackind

Executive Officer and Director (Principal Executive Officer)

Financial Officer

(Principal Financial and Accounting Officer)

Robert Rackind

Executive Chairman and

March 27, 2025

Nell Cady-Kruse

Chairman and Director

Nell Cady-Kruse

March 27, 2025

Hella Alashkar

March 27, 2025

FACT II ACQUISITION CORP.

INDEX TO FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Financial Statements:

Balance Sheet

Statement of Operations

Statement of Changes in Shareholders’ Deficit

Statement of Cash Flows

Notes to Financial Statements

Consolidated Balance Sheets as of December 31, 2025 and 2024

Consolidated Statements of Operations for the Year Ended December 31, 2025 and for the period from June 19, 2024 (inception) through December 31, 2024

Consolidated Statements of Changes in Shareholders’ Deficit for the Year Ended December 31, 2025 and for the period from June 19, 2024 (inception) through December 31, 2024

Consolidated Statements of Cash Flows for the Year Ended December 31, 2025 and for the period from June 19, 2024 (inception) through December 31, 2024

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting

To the Shareholders and the Board of Directors

Board of Directors and Shareholders

FACT II Acquisition Corp.

Opinion on the Financial Statements

We have audited the accompanying balance

sheet of FACT II Acquisition Corp.

(the “Company”) as of December 31, 2024, the related statements of operations, changes in

shareholders’ deficit and cash flows for the period from June 19, 2024, (inception) through December 31, 2024 and the related

notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2024 and the results of its operations and its

cash flows for the period from June 19, 2024, (inception) through December 31, 2024, in conformity with accounting principles

generally accepted in the United States of America.

We have audited the accompanying balance sheets of FACT II Acquisition Corp.

as of December 31, 2025 and 2024, the related statements of operations, changes in shareholders’ deficit and cash flows for the year ended December 31, 2025 and for the period from June 19, 2024 (inception) through December 31, 2024 and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024 and the results of its operations and its cash flows for the year ended December 31, 2025 and for the period from June 19, 2024 (inception) through December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, if the Company is unable to raise additional funds to alleviate liquidity needs and complete a business combination by May 27, 2026, then the Company will cease all operations except for the purpose of liquidating.

The date for mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans regarding these matters are also described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s

internal control over financial reporting.

These financial statements are the responsibility of the entity’s management.

Our responsibility is to express an opinion on these financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to FACT II Acquisition Corp.

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

FACT II Acquisition Corp.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

WithumSmith+Brown, PC

We have served as the Company’s auditor

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ WithumSmith+Brown, PC

We have served as FACT II Acquisition Corp.’s auditor since 2024.

New York, New York

2 unchanged sentences

FACT II ACQUISITION CORP.

BALANCE SHEET

DECEMBER 31, 2024

CONSOLIDATED BALANCE SHEETS

Current assets

Cash $ 544,791 $ 1,447,921

Prepaid expenses 92,600 95,833

2 unchanged sentences

Cash held in Trust Account 183,785,456 176,597,270

$ 178,218,232

Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit

TOTAL ASSETS $ 184,422,847 $ 178,218,232

LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT

Current liabilities

3 unchanged sentences

Deferred legal fees 2,137,965 850,000

Deferred underwriting fee

Deferred underwriting fee payable 7,000,000 7,000,000

TOTAL LIABILITIES 9,161,472 7,974,395

COMMITMENTS AND CONTINGENCIES (Note 6)

Class A ordinary shares subject to possible redemption, 17,500,000 shares at redemption value of $ 10.09 per share

Class A ordinary shares subject to possible redemption, 17,500,000 shares at redemption value of approximately $ 10.50 and $ 10.09 per share at December 31, 2025 and 2024, respectively 183,785,456 176,597,270

SHAREHOLDERS’ DEFICIT

1 unchanged sentence

1,000,000 shares authorized;

none issued or outstanding

none issued and outstanding at December 31, 2025 and 2024 — —

Class A ordinary shares, $ 0.0001 par value;

200,000,000 shares authorized;

988,125 shares issued and outstanding (excluding 17,500,000 shares subject to possible redemption)

988,125 issued and outstanding at December 31, 2025 and 2024 (excluding 17,500,000 shares subject to possible redemption) 99 99

Class B ordinary shares, $ 0.0001 par value;

20,000,000 shares authorized;

6,708,333 shares issued and outstanding (1)

5,833,333 and 6,708,333 shares issued and outstanding at December 31, 2025 and 2024, respectively 583 671 (1)

Additional paid-in capital — —

Accumulated deficit ( 8,524,763 ) ( 6,354,203 )

( 6,354,203 )

TOTAL SHAREHOLDERS’ DEFICIT ( 8,524,081 ) ( 6,353,433 )

( 6,353,433 )

Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit

$ 178,218,232

(1) Includes an aggregate of up to 875,000 Class B ordinary shares that were forfeited by Sponsor HoldCo upon expiry of the over-allotment option effective as of January 10, 2025 (Note 5).

The accompanying notes are an integral

part of this financial statement.

TOTAL LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT $ 184,422,847 $ 178,218,232

(1) Includes an aggregate of up to 875,000 Class B ordinary shares that were subject to forfeiture if the underwriter did not exercise its over-allotment option.

On January 10, 2025, the over-allotment option expired unexercised.

As a result, the 875,000 shares were forfeited.

The accompanying notes are an integral part

of this consolidated financial statement.

FACT II ACQUISITION CORP.

STATEMENT OF OPERATIONS

FOR THE PERIOD FROM JUNE 19, 2024

(INCEPTION) THROUGH DECEMBER 31, 2024

General and administrative costs

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended

2024 (inception)

General and administrative expenses $ 2,225,030 $ 1,079,899

Loss from operations ( 2,225,030 ) ( 1,079,899 )

( 1,079,899 )

Other income:

Change in fair value of over-allotment liability 26,558 285,738

Interest earned on bank account 27,824 —

Interest earned on cash held in Trust Account 7,188,186 722,270

Total other income 7,242,568 1,008,008

NET INCOME (LOSS) $ 5,017,538 $ ( 71,891 )

Weighted average shares outstanding of Class A ordinary shares 18,488,125 3,223,571

Basic and diluted net loss per ordinary share, Class A ordinary shares

Basic and diluted net income (loss) per ordinary share, Class A ordinary shares $ 0.21 $ ( 0.01 )

Weighted average shares outstanding, Class B ordinary shares (1) 5,833,333 5,145,299

Basic and diluted net loss per ordinary share, Class B ordinary shares

(1) Excludes an aggregate of up to 875,000 Class B ordinary shares that were forfeited by Sponsor HoldCo upon expiry of the over-allotment option effective as of January 10, 2025 (Note 5).

The accompanying notes are an integral

part of this financial statement.

Basic and diluted net income (loss) per ordinary share, Class B ordinary shares $ 0.21 $ ( 0.01 )

(1) Excludes an aggregate of up to 875,000 Class B ordinary shares that were subject to forfeiture if the underwriter did not exercise its over-allotment option.

On January 10, 2025, the over-allotment option expired unexercised.

As a result, the 875,000 shares were forfeited.

The accompanying notes are an integral part

of this consolidated financial statement.

FACT II ACQUISITION CORP.

STATEMENT OF CHANGES IN SHAREHOLDERS’

FOR THE PERIOD FROM JUNE 19, 2024

(INCEPTION) THROUGH DECEMBER 31, 2024

CONSOLIDATED STATEMENTS OF CHANGES IN

SHAREHOLDERS’ DEFICIT

FOR THE YEAR ENDED DECEMBER 31, 2025 AND

FOR THE PERIOD FROM JUNE 19, 2024 (INCEPTION)

THROUGH DECEMBER 31, 2024

Ordinary Shares

Shareholders’

Additional Paid-in

Total Shareholders’

Balance — June 19, 2024 (inception) — $ — — $ — $ — $ — $ —

4 unchanged sentences

Allocated value of transaction costs to Class A ordinary shares — — — — ( 71,958 ) — ( 71,958 )

Accretion for common stock to redemption amount

( 7,108,522 )

( 6,282,312 )

( 13,390,834 )

Accretion of Class A ordinary shares subject to redemption to redemption amount — — — — ( 7,108,522 ) ( 6,282,312 ) ( 13,390,834 )

Net loss — — — — — ( 71,891 ) ( 71,891 )

Balance – December 31, 2024 988,125 99 6,708,333 $ 671 ― ( 6,354,203 ) ( 6,353,433 )

$ ( 6,354,203 )

$ ( 6,353,433 )

(1) Excludes an aggregate of up to 875,000 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full by the underwriters (Note 5).

The accompanying notes are an integral

part of this financial statement.

Forfeiture of Founder Shares — — ( 875,000 ) ( 88 ) 88 ― ―

Accretion of Class A ordinary shares subject to redemption to redemption amount — — — — ( 88 ) ( 7,188,098 ) ( 7,188,186 )

Net income — — — — — 5,017,538 5,017,538

Balance – December 31, 2025 988,125 $ 99 5,833,333 $ 583 $ ― $ ( 8,524,763 ) $ ( 8,524,081 )

(1) Includes an aggregate of up to 875,000 Class B ordinary shares that were subject to forfeiture if the underwriter did not exercise its over-allotment option.

On January 10, 2025, the over-allotment option expired unexercised.

As a result, the 875,000 shares were forfeited.

The accompanying notes are an integral part

of this consolidated financial statement.

FACT II ACQUISITION CORP.

STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM JUNE 19, 2024

(INCEPTION) THROUGH DECEMBER 31, 2024

CONSOLIDATED STATEMENTS OF CASH FLOWS

2024 (inception)

Cash Flows from Operating Activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Net income (loss) $ 5,017,538 $ ( 71,891 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Change in fair value of over-allotment liability ( 26,558 ) ( 285,738 )

8 unchanged sentences

Investment of cash into Trust Account — ( 175,875,000 )

( 175,875,000 )

Net cash used in investing activities — ( 175,875,000 )

( 175,875,000 )

Cash Flows from Financing Activities:

1 unchanged sentence

Proceeds from sale of Units, net of underwriting discounts paid — 171,500,000

Proceeds from sale of Private Placements Warrants

Proceeds from sale of Private Placement Warrants — 6,631,250

Proceeds from advances from Sponsor — 4,400,006

Repayment of advances from Sponsor through the private placement proceeds — ( 4,400,006 )

( 4,400,006 )

Payment of offering costs — ( 528,226 )

1 unchanged sentence

Net Change in Cash ( 903,130 ) 1,447,921

Cash, beginning of the period

Cash, end of the period

Supplemental disclosure of cash flow information:

Cash – Beginning of period 1,447,921 —

Cash – End of period $ 544,791 $ 1,447,921

Non-Cash investing and financing activities:

Deferred underwriting fee payable $ — $ 7,000,000

The accompanying notes are an integral

part of this financial statement.

The accompanying notes are an integral part

of this consolidated financial statement.

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

DESCRIPTION OF ORGANIZATION AND BUSINESS

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

FACT II Acquisition Corp.

(the “Company”)

is a blank check company incorporated as a Cayman Islands exempted company on June 19, 2024.

The Company was incorporated for the purpose

of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more

businesses (“Business Combination”).

The Company is not limited to a particular industry

or geographic region for purposes of completing a Business Combination.

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 December 31, 2024, the Company had not commenced

any operations.

All activity for the period from June 19, 2024 (inception) through December 31, 2024 relates to the Company’s formation

and the initial public offering (“Initial Public Offering”), which is described below.

The Company will not generate any operating

revenues until after the completion of a Business Combination, at the earliest.

The Company will generate non-operating income in the

form of interest income from the proceeds derived from the Initial Public Offering.

The Company has selected December 31 as its fiscal

On June 19, 2024, FACT II Acquisition Parent LLC,

a Cayman Islands limited liability company (which is referred to as the “Sponsor”), formed FACT II Acquisition LLC, a Cayman

Islands limited liability company (which is referred to as “Sponsor HoldCo”), through which the Sponsor (i) holds its founder

shares (as defined below) and (ii) purchased Private Placement Securities at the date of the Initial Public Offering.

The registration statement for the Company’s

Initial Public Offering was declared effective on November 25, 2024.

On November 27, 2024, the Company consummated the Initial Public

Offering of 17,500,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered,

the “Public Shares”) at $ 10.00 per Unit, generating gross proceeds of $ 175,000,000 , which is discussed in Note 3.

Simultaneously with the closing of the Initial

Public Offering, the Company consummated the sale of 663,125 private placement units (each, a “Private Placement Unit”) at

a price of $ 10.00 per Private Placement Unit, generating gross proceeds of $ 6,631,250 , which is discussed in Note 4, as follows:

Private Placement Units ($ 175,000 in the aggregate) with the Sponsor, (B) (i) 260,000 Private Placement Units and (ii) 162,500 Private

Placement Units and 325,000 restricted Class A ordinary shares (such restricted Class A ordinary shares together with such Private Placement

Units collectively, the “Private Placement Securities”) ($ 4,225,000 in the aggregate) with Sponsor HoldCo, (C) 178,500 Private

Placement Units ($ 1,785,000 in the aggregate) with Cohen & Company Capital Markets, a division of J.V.B.

Financial Group, LLC (“CCM”)

and (D) 44,625 Private Placement Units with Seaport Global Securities LLC (“Seaport”) ($ 446,250 in the aggregate) (collectively,

the “Private Placement”).

The Private Placement Units, which were purchased by the Sponsor, Sponsor HoldCo, CCM and Seaport,

are identical to the Units, except that, they (including the underlying securities) are (i) subject to certain limited exceptions, will

be subject to transfer restrictions until 180 days following the consummation of the Company’s initial Business Combination and

(ii) will be entitled to registration rights.

The Private Placement Securities, which were purchased by Sponsor HoldCo, are identical

to the Private Placement Units except that they include restricted Class A ordinary shares, which will be subject to transfer restrictions

until 90 days following the consummation of the Company’s initial Business Combination.

Transaction costs amounted to $ 11,028,226 , consisting

of $ 3,500,000 of cash underwriting fee, $ 7,000,000 of deferred underwriting fee, and $ 528,226 of other offering costs.

The Company’s management has broad discretion

with respect to the specific application of the net proceeds of the Initial Public Offering and the Private Placement, although substantially

all of the net proceeds are intended to be applied generally toward completing a Business Combination.

The Company must complete its initial

Business Combination with one or more target businesses that together have a fair market value equal to at least 80 % of the net assets

held in the Trust Account (as defined below) (excluding any deferred underwriting commissions held in the Trust Account) at the time of

the agreement to enter into a Business Combination.

The Company will only complete a Business Combination if the post-Business Combination

company owns or acquires 50 % or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling

interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company

Act of 1940, as amended (the “Investment Company Act”).

There is no assurance that the Company will be able to successfully

effect a Business Combination.

Following the closing of the Initial Public Offering,

on November 27, 2024, an amount of $ 175,875,000 ($ 10.05 per Unit) of the net proceeds of the Initial Public Offering and the Private Placement

was placed in the trust account (the “Trust Account”), located in the United States, with Odyssey Transfer and Trust Company

acting as trustee, and the funds will be invested or held either (i) in U.S.

government securities, within the meaning set forth in Section

2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself

out as a money market fund meeting certain conditions of Rule 2a-7 of the Investment Company Act, (ii) as uninvested cash, or (iii) an

interest bearing bank demand deposit account or other accounts at a bank, as determined by the Company, until the earlier of (i) the completion

of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described

No later than 18 months after the closing of the Initial Public Offering (or 24 months from the closing of the Initial Public Offering

if the Company has executed a definitive agreement for an initial business combination within 18 months from the Initial Public Offering),

the amounts held in the Trust Account will be held as cash or cash items, including in demand deposit accounts.

(the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on June 19, 2024.

The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (“Business Combination”).

The Company is not limited to a particular industry or geographic region for purposes of completing a Business Combination.

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 December 31, 2025, the Company had not commenced any operations.

There was no activity for the period from June 19, 2024 (inception) through December 31, 2025 besides the Company’s formation, initial public offering (the “IPO”), and searching for a Business Combination opportunity, which are described below.

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

The Company generates non-operating income in the form of interest income from the proceeds derived from the IPO.

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

On June 19, 2024, FACT II Acquisition Parent LLC, a Cayman Islands limited liability company (which is referred to as the “Sponsor”), formed FACT II Acquisition LLC, a Cayman Islands limited liability company (which is referred to as “Sponsor HoldCo”), through which the Sponsor (i) holds its founder shares (as defined below) and (ii) purchased Private Placement Securities at the date of the IPO.

The registration statement for the Company’s IPO was declared effective on November 25, 2024.

On November 27, 2024, the Company consummated the IPO of 17,500,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”) at $ 10.00 per Unit, generating gross proceeds of $ 175,000,000 , which is discussed in Note 3.

Simultaneously with the closing of the IPO, the Company consummated the sale of 663,125 private placement units (each, a “Private Placement Unit”) at a price of $ 10.00 per Private Placement Unit, generating gross proceeds of $ 6,631,250 , which is discussed in Note 4, as follows:

(A) 17,500 Private Placement Units ($ 175,000 in the aggregate) with the Sponsor, (B) (i) 260,000 Private Placement Units and (ii) 162,500 Private Placement Units and 325,000 restricted Class A ordinary shares (such restricted Class A ordinary shares together with such Private Placement Units collectively, the “Private Placement Securities”) ($ 4,225,000 in the aggregate) with Sponsor HoldCo, (C) 178,500 Private Placement Units ($ 1,785,000 in the aggregate) with Cohen & Company Capital Markets, a division of J.V.B.

Financial Group, LLC (“CCM”) and (D) 44,625 Private Placement Units with Seaport Global Securities LLC (“Seaport”) ($ 446,250 in the aggregate) (collectively, the “Private Placement”).

The Private Placement Units, which were purchased by the Sponsor, Sponsor HoldCo, CCM and Seaport, are identical to the Units, except that, they (including the underlying securities) are (i) subject to certain limited exceptions, will be subject to transfer restrictions until 180 days following the consummation of the Company’s initial Business Combination and (ii) will be entitled to registration rights.

The Private Placement Securities, which were purchased by Sponsor HoldCo, are identical to the Private Placement Units except that they include restricted Class A ordinary shares, which will be subject to transfer restrictions until 90 days following the consummation of the Company’s initial Business Combination.

Transaction costs amounted to $ 11,028,226 , consisting of $ 3,500,000 of cash underwriting fee, $ 7,000,000 of deferred underwriting fee, and $ 528,226 of other offering costs.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the Private Placement, although substantially all of the net proceeds are intended to be applied generally toward completing a Business Combination.

The Company must complete its initial Business Combination with one or more target businesses that together have a fair market value equal to at least 80 % of the net assets held in the Trust Account (as defined below) (excluding any deferred underwriting commissions held in the Trust Account) at the time of the agreement to enter into a Business Combination.

The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50 % or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

There is no assurance that the Company will be able to successfully effect a Business Combination.

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

The Company will provide its shareholders with

the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection

with a general meeting called to approve the Business Combination or (ii) by means of a tender offer.

The decision as to whether the Company

will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company.

The shareholders will

be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially $ 10.05 per share), calculated

as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in

the Trust Account and not previously released to the Company to pay its tax obligations.

There will be no redemption rights upon the completion

of a Business Combination with respect to the Company’s warrants.

The Class A ordinary shares were recorded at redemption value

and classified as temporary equity at the completion of the Initial Public Offering, in accordance with Accounting Standards Codification

(“ASC”) Topic 480, “Distinguishing Liabilities from Equity.”

If the Company seeks shareholder approval in connection

with a Business Combination, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires

the affirmative vote of a majority of the shareholders who vote at a general meeting of the Company.

If a shareholder vote is not required

under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or

other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions

pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing

substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.

If the Company seeks shareholder approval in connection with a Business Combination, Sponsor HoldCo has agreed to vote its founder shares

(as defined in Note 5) and any Public Shares purchased in or after the Initial Public Offering in favor of approving a Business Combination

and to waive its redemption rights with respect to any such shares in connection with a shareholder vote to approve a Business Combination.

Additionally, each public shareholder may elect to redeem its Public Shares, without voting, and if they do vote, irrespective of whether

they vote for or against a proposed Business Combination.

Notwithstanding the foregoing, if the Company

seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s

Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder

or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities

Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more

than an aggregate of 15 % of the Public Shares without the Company’s prior written consent.

Sponsor HoldCo has agreed (a) to waive its redemption

rights with respect to any founder shares and Public Shares held by it in connection with the completion of a Business Combination and

(b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing

of the Company’s obligation to redeem 100 % of the Public Shares if the Company does not complete a Business Combination within the

Extension Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial

Business Combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares

in conjunction with any such amendment and (iii) to waive its rights to liquidating distributions from the Trust Account with respect

to the founder shares if the Company fails to complete a Business Combination.

The Company will have until 18 months from the

closing of the Initial Public Offering (or 24 months from the closing of the Initial Public Offering if the Company has executed a definitive

agreement for an initial Business Combination within 18 months from the closing of the Initial Public Offering) or such later period approved

by the Company’s Shareholders (the “Extension Period”) to complete a Business Combination.

If the Company is unable

to complete a Business Combination within the Extension 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 10 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 (less

up to $ 100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding Public Shares,

which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further

liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of

the remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject in each case to its obligations

under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

Sponsor HoldCo has agreed to waive its liquidation

rights with respect to the founder shares if the Company fails to complete a Business Combination within the Extension Period.

if Sponsor HoldCo acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions

from the Trust Account if the Company fails to complete a Business Combination within the Extension Period.

The underwriters have agreed

to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not

complete a Business Combination within the Extension Period and, in such event, such amounts will be included with the funds held in the

Trust Account that will be available to fund the redemption of the Public Shares.

In the event of such distribution, it is possible that

the per share value of the assets remaining available for distribution will be less than the initial amount held in the Trust Account

Following the closing of the IPO, on November 27, 2024, an amount of $ 175,875,000 ($ 10.05 per Unit) of the net proceeds of the IPO and the Private Placement was placed in the trust account (the “Trust Account”), located in the United States, with Odyssey Transfer and Trust Company acting as trustee, and the funds will be invested or held either (i) in U.S.

government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting certain conditions of Rule 2a-7 of the Investment Company Act, (ii) as uninvested cash, or (iii) an interest bearing bank demand deposit account or other accounts at a bank, as determined by the Company, until the earlier of (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.

No later than 18 months after the closing of the IPO (or 24 months from the closing of the IPO if the Company has executed a definitive agreement for an initial business combination within 18 months from the IPO), the amounts held in the Trust Account will be held as cash or cash items, including in demand deposit accounts.

The Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer.

The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company.

The shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially $ 10.05 per share), calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations.

There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

The Class A ordinary shares were recorded at redemption value and classified as temporary equity at the completion of the IPO, in accordance with Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.”

If the Company seeks shareholder approval in connection with a Business Combination, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who vote at a general meeting of the Company.

If a shareholder vote is not required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.

If the Company seeks shareholder approval in connection with a Business Combination, Sponsor HoldCo has agreed to vote its founder shares (as defined in Note 5) and any Public Shares purchased in or after the IPO in favor of approving a Business Combination and to waive its redemption rights with respect to any such shares in connection with a shareholder vote to approve a Business Combination.

Additionally, each public shareholder may elect to redeem its Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.

Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15 % of the Public Shares without the Company’s prior written consent.

Sponsor HoldCo has agreed (a) to waive its redemption rights with respect to any founder shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to redeem 100 % of the Public Shares if the Company does not complete a Business Combination within the Extension Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment and (iii) to waive its rights to liquidating distributions from the Trust Account with respect to the founder shares if the Company fails to complete a Business Combination.

The Company will have until 18 months from the closing of the IPO (or 24 months from the closing of the IPO if the Company has executed a definitive agreement for an initial Business Combination within 18 months from the closing of the IPO) or such later period approved by the Company’s Shareholders (the “Extension Period”) to complete a Business Combination.

If the Company is unable to complete a Business Combination within the Extension 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 10 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 (less up to $ 100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Sponsor HoldCo has agreed that it will be liable

to the Company, if and to the extent any claims by a third party for services rendered or products sold to the Company, or by a prospective

target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account

to below (1) $ 10.05 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation

of the Trust Account due to reductions in the value of trust assets, in each case net of the amount of interest which may be withdrawn

to pay taxes.

This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to

seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial

Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities

Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, Sponsor HoldCo will not

be responsible to the extent of any liability for such third-party claims.

The Company will seek to reduce the possibility that Sponsor

HoldCo will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other

than the Company’s independent auditors), prospective target businesses or other entities with which the Company does business,

execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Sponsor HoldCo has agreed to waive its liquidation rights with respect to the founder shares if the Company fails to complete a Business Combination within the Extension Period.

However, if Sponsor HoldCo acquires Public Shares in or after the IPO, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Extension Period.

The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Extension Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares.

In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the initial amount held in the Trust Account ($ 10.05 ).

Sponsor HoldCo has agreed that it will be liable to the Company, if and to the extent any claims by a third party for services rendered or products sold to the Company, or by a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $ 10.05 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes.

This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).

Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, Sponsor HoldCo will not be responsible to the extent of any liability for such third-party claims.

The Company will seek to reduce the possibility that Sponsor HoldCo will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent auditors), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Risks and Uncertainties

The United States and global markets are

experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the

recent escalation of the Israel-Hamas conflict.

In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization

(“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European

Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and

entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication

payment system.

Certain countries, including the United States, have also provided and may continue to provide military aid or other

assistance to Ukraine and to Israel, increasing geopolitical tensions among a number of nations.

The invasion of Ukraine by Russia and

the escalation of the Israel-Hamas conflict and the resulting measures that have been taken, and could be taken in the future, by NATO,

the United States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global

security concerns that could have a lasting impact on regional and global economies.

Although the length and impact of the ongoing conflicts

are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital

markets, as well as supply chain interruptions and increased cyberattacks against U.S.

Additionally, any resulting sanctions

could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.

Any of the above mentioned factors, or any other

negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine,

the escalation of the Israel-Hamas conflict and subsequent sanctions or related actions, could adversely affect the Company’s search

for an initial business combination and any target business with which the Company may ultimately consummate an initial business combination.

The United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting global conflicts, including from the ongoing Russia-Ukraine and Israel-Hamas conflicts, as well as recent developments to trade and tariff policies of the United States and other countries.

In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system.

Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel, increasing geopolitical tensions among a number of nations.

The invasion of Ukraine by Russia and the escalation of the Israel-Hamas conflict and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and global economies.

Although the length and impact of the ongoing conflicts, as well as changes in global trade and tariff policies, are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyberattacks against U.S.

Additionally, any resulting sanctions or tariffs, as applicable, could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.

Any of the above mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine, the Israel-Hamas conflict and subsequent sanctions or related actions or the ongoing trade and tariff policy changes by the United States or other countries, could adversely affect the Company’s search for an initial business combination and any target business with which the Company may ultimately consummate an initial business combination.

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements are presented

The accompanying consolidated financial statements are presented in U.S.

dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC.

Liquidity and Capital Resources

As of December 31, 2024, the Company had $ 1,447,921

in cash and a working capital of $ 1,419,359 .

In connection with the Company’s assessment of going concern considerations in accordance

with ASC 205-40, “Going Concern,” and through the consummation of the Initial Public Offering, the Company has sufficient

funds for the working capital needs of the Company until a minimum of one year from the date of issuance of these financial statements.

The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating the business.

However, if estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination

are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to

the initial Business Combination.

Moreover, the Company may need to obtain additional financing either to complete the Business Combination

or because it became obligated to redeem a significant number of public shares upon completion of a Business Combination, in which case

the Company may issue additional securities or incur debt in connection with such Business Combination.

The Company cannot be assured

that its plans to consummate an initial Business Combination will be successful.

The Company does not believe it will need to raise

additional funds in order to meet the expenditures required for operating its business.

However, if the estimate of the costs of identifying

a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary

to do so, the Company may have insufficient funds available to operate its business prior to the initial Business Combination.

GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”).

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Principles of Consolidation

The Company has one wholly-owned subsidiary, Patriot Merger Subsidiary, Inc., which was incorporated in Florida.

The accompanying consolidated financial statements include the accounts of the Company and Patriot Merger Subsidiary, Inc.

All significant intercompany balances and transactions have been eliminated in consolidation.

Going Concern

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 205-40, “Presentation of Financial Statements – Going Concern,” management has determined that the Company’s liquidity condition and the liquidation date raise substantial doubt about the Company’s ability to continue as a going concern.

No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Combination Period.

As of December 31, 2025, the Company had $ 544,791 in its operating bank account and working capital of $ 613,884 .

Until the consummation of a Business Combination or the Company’s liquidation, the Company will use the funds held outside the Trust Account primarily to complete the initial business combination, or in the event that the Company is unable to complete the initial business combination, to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a Business Combination, and to pay for directors and officers’ liability insurance premiums.

Emerging Growth Company

The Company is an “emerging growth company,”

as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),

and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that

are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements

of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports

and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder

approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts

emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that

is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered

under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company

can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but

any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which means that

when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging

growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison

of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth

company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting

standards used.

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of financial statements in conformity

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting

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 financial statements, which management considered in formulating its estimate, could change in the near

term due to one or more future confirming events.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.

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 consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.

Accordingly, the actual results could differ significantly from those estimates.

FACT II ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Cash and Cash Equivalents

The Company considers all short-term investments

with an original maturity of three months or less when purchased to be cash equivalents.

The Company had $ 1,447,921 in cash and no cash

equivalents as of December 31, 2024.

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

The Company had $ 544,791 and $ 1,447,921 in cash as of December 31, 2025 and 2024, respectively.

The Company had no cash equivalents as of December 31, 2025 or 2024.

Cash Held in Trust Account

At December 31,

2024, substantially all of the assets held in the Trust Account were held in demand deposit account.

As of December 31, 2025 and 2024, all of the assets held in the Trust Account were held in a demand deposit account.

Concentration of Credit Risk

Financial instruments that potentially subject

the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times may exceed the Federal

Deposit Insurance Corporation limit of $ 250,000 .

Any loss incurred or a lack of access to such funds could have a significant adverse

impact on the Company’s financial condition, results of operations and cash flows.

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times may exceed the Federal Deposit Insurance Corporation limit of $ 250,000 .

Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations and cash flows.

Offering Costs

The Company complies with the requirements of

the Financial Accounting Standards Board (“FASB”) ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses

of Offering.” Offering costs consist principally of professional and registration fees that are directly related to the Initial

Public Offering.

FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds

from the issuance of convertible debt into its equity and debt components.

The Company applies this guidance to allocate Initial Public

Offering proceeds from the Units between Class A ordinary shares and warrants, using the residual method by allocating Initial

Public Offering proceeds first to assigned value of the warrants and then to the Class A ordinary shares.

Offering costs allocated

to the Public Shares were charged to temporary equity, and offering costs allocated to the Public Warrants and Private Placement Units

were charged to shareholders’ deficit as the Public and Private Placement Warrants, after management’s evaluation, were accounted

for under equity treatment.

The Company complies with the requirements of the Financial Accounting Standards Board (“FASB”) ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Offering costs consist principally of professional and registration fees that are directly related to the IPO.

FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components.

The Company applies this guidance to allocate IPO proceeds from the Units between Class A ordinary shares and warrants, using the residual method by allocating IPO proceeds first to assigned value of the warrants and then to the Class A ordinary shares.

Offering costs allocated to the Public Shares were charged to temporary equity, and offering costs allocated to the Public Warrants and Private Placement Units were charged to shareholders’ deficit as the Public and Private Placement Warrants, after management’s evaluation, were accounted for under equity treatment.

Fair Value of Financial Instruments

The fair value of the Company’s assets and

liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying

amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

The Company accounts for income taxes under ASC 740,

“Income Taxes” (“ASC 740”).

ASC 740 requires the recognition of deferred tax assets and liabilities

for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected

future tax benefit to be derived from tax loss and tax credit carryforwards.

ASC 740 additionally requires a valuation allowance

to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for

uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement

process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

There were no unrecognized tax benefits

and no amounts accrued for interest and penalties as of December 31, 2024.

The Company is currently not aware of any issues under review

that could result in significant payments, accruals or material deviation from its position.

The Company has been subject to income tax

examinations by major taxing authorities since inception.

The Company is considered an exempted Cayman Islands

Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.

As such, the Company’s tax provision was zero for the period presented.

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature.

The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”).

ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryforwards.

ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

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

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2025 and 2024.

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

The Company has been subject to income tax examinations by major taxing authorities since inception.

The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.

As such, the Company’s tax provision was zero for the periods presented.

Derivative Financial Instruments

The Company evaluates its financial instruments

to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815,

“Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument

is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value

reported in the statement of operations.

The classification of derivative instruments, including whether such instruments should be recorded

as liabilities or as equity, is evaluated at the end of each reporting period.

Derivative liabilities are classified in the balance sheet

as current or non-current based on whether or not net cash settlement or conversion of the instrument could be required within 12 months

of the balance sheet date.

The underwriters’ over-allotment option is deemed to be a freestanding financial instrument indexed on

the contingently redeemable shares and will be accounted for as a liability pursuant to ASC 480 if not fully exercised at the time

of the Initial Public Offering.

Warrant Instruments

The Company accounted for the Public and Private

Placement Warrants issued in connection with the Initial Public Offering and the private placement in accordance with guidance contained

in FASB ASC Topic 815, “Derivatives and Hedging.” Accordingly, the Company evaluated and classified the warrant instruments

as equity at their assigned values.

Net Loss per Ordinary Share

Net loss per ordinary share is computed by dividing

net loss by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture.

Weighted average shares were reduced for the effect of an aggregate of 875,000 ordinary shares that were forfeited upon the expiry of

the over-allotment option granted to the underwriters, effective as of January 10, 2025.

As a result, diluted net loss per ordinary share

is the same as basic net loss per ordinary share for the period presented.

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statement of operations.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

Derivative liabilities are classified in the balance sheets as current or non-current based on whether or not net cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

The underwriters’ over-allotment option is deemed to be a freestanding financial instrument indexed on the contingently redeemable shares and was accounted for as a liability pursuant to ASC 480 as the option was not fully exercised at the time of the IPO.

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

The following table presents a reconciliation

of the numerator and denominator used to compute basic and diluted net loss per share for each class of ordinary shares:

Basic net loss per ordinary share:

Allocation of net loss, basic

Basic weighted average ordinary shares outstanding

Basic net loss per ordinary share

Class A Ordinary Shares Subject to Possible

The public shares contain a redemption feature

which allows for the redemption of such public shares in connection with the Company’s liquidation, or if there is a shareholder

vote or tender offer in connection with the Company’s initial Business Combination.

In accordance with ASC 480-10-S99, the Company

classifies public shares subject to possible redemption outside of permanent equity as the redemption provisions are not solely within

the control of the Company.

The Company recognizes changes in redemption value immediately as it occurs and will adjust the carrying value

of redeemable shares to equal the redemption value at the end of each reporting period.

Immediately upon the closing of the Initial Public

Offering, the Company recognized the accretion from initial book value to redemption amount value.

The change in the carrying value of

redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit.

as of December 31, 2024, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity,

outside of the shareholders’ deficit section of the Company’s balance sheet.

As of December 31, 2024, the Class A ordinary

shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:

Warrant Instruments

The Company accounted for the Public Warrants and Private Placement Warrants issued in connection with the IPO and the private placement in accordance with guidance contained in FASB ASC Topic 815, “Derivatives and Hedging.” Accordingly, the Company evaluated and classified the warrant instruments as equity at their assigned values.

Net Income (Loss) per Ordinary Share

Net income (loss) per ordinary share is computed by dividing net income (loss)by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture.

Weighted average shares were reduced for the effect of an aggregate of 875,000 ordinary shares that were forfeited upon the expiry of the over-allotment option granted to the underwriters, effective as of January 10, 2025.

As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share for the period presented.

The following table presents a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of ordinary shares:

For the Year Ended

December 31, 2025 For the period from June 19,

2024 (inception) through

December 31, 2024

Class A Class B Class A Class B

Basic net income (loss) per share:

Allocation of net income (loss) basic $ 3,814,116 $ 1,203,422 $ ( 27,691 ) $ ( 44,200 )

Basic and diluted weighted average ordinary shares outstanding 18,488,125 5,833,333 3,223,571 5,145,299

Basic and diluted net income (loss) per ordinary share $ 0.21 $ 0.21 $ ( 0.01 ) $ ( 0.01 )

Class A Ordinary Shares Subject to Possible Redemption

The public shares contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, or if there is a shareholder vote or tender offer in connection with the Company’s initial Business Combination.

In accordance with ASC 480-10-S99, the Company classifies public shares subject to possible redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company.

The Company recognizes changes in redemption value immediately as it occurs and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period.

Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount value.

The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit.

Accordingly, as of December 31, 2025 and 2024, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheets.

As of December 31, 2025 and 2024, the Class A ordinary shares subject to possible redemption reflected in the balance sheets are reconciled in the following table:

Gross proceeds $ 175,000,000

$ 175,000,000

Proceeds allocated to Public Warrants ( 525,000 )

1 unchanged sentence

Class A ordinary shares issuance costs ( 10,956,268 )

( 10,956,268 )

Remeasurement of carrying value to redemption value 13,390,834

Class A ordinary shares subject to possible redemption, December 31, 2024 $ 176,597,270

$ 176,597,270

Recently Issued Accounting Standards

In November 2023, the FASB

issued Accounting Standards Update (“ASU”) 2023-07, “Segment

Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” The amendments in this ASU require

disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating

officer decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure

of segment profit or loss.

The ASU requires that a public entity disclose the title and position of the CODM and an

explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how

to allocate resources.

Public entities will be required to provide all annual disclosures currently required by

Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures

required by the amendments in this ASU and existing segment disclosures in Topic 280.

This ASU is effective

for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with

early adoption permitted.

Management does not believe that any recently

issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial

INITIAL PUBLIC OFFERING

Pursuant to the Initial Public Offering on November

27, 2024, the Company sold 17,500,000 Units at a purchase price of $ 10.00 per Unit.

Each Unit consists of one Class A ordinary share and

one-half of one redeemable warrant (“Public Warrant”).

Each whole Public Warrant will entitle the holder to purchase one Class

A ordinary share at an exercise price of $ 11.50 per share, subject to adjustment (see Note 7).

Accretion for common stock to redemption amount 7,188,186

Class A ordinary shares subject to possible redemption, December 31, 2025 $ 183,785,456

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Recently Issued Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

INITIAL PUBLIC OFFERING

Pursuant to the IPO on November 27, 2024, the Company sold 17,500,000 Units at a purchase price of $ 10.00 per Unit.

Each Unit consists of one Class A ordinary share and one -half of one redeemable warrant (“Public Warrant”).

Each whole Public Warrant will entitle the holder to purchase one Class A ordinary share at an exercise price of $ 11.50 per share, subject to adjustment (see Note 6).

PRIVATE PLACEMENT

Simultaneously with the closing of the Initial

Public Offering, the Company consummated the sale of 663,125 Private Placement Units at a price of $ 10.00 per Private Placement Unit,

generating gross proceeds of $ 6,631,250 , as follows:

(A) 17,500 Private Placement Units ($ 175,000 in the aggregate) with the Sponsor,

(B) (i) 260,000 Private Placement Units and (ii) 162,500 Private Placement Units and 325,000 restricted Class A ordinary shares ($ 4,225,000

in the aggregate) with Sponsor HoldCo, (C) 178,500 Private Placement Units ($ 1,785,000 in the aggregate) with CCM and (D) 44,625 Private

Placement Units with Seaport ($ 446,250 in the aggregate).

The Private Placement Units, which were purchased

by the Sponsor, Sponsor HoldCo, CCM and Seaport, are identical to the Units, except that, they (including the underlying securities) are

(i) subject to certain limited exceptions, will be subject to transfer restrictions until 180 days following the consummation of the Company’s

initial Business Combination and (ii) will be entitled to registration rights.

The Private Placement Securities, which were purchased

by Sponsor HoldCo, are identical to the Private Placement Units except that they include restricted Class A ordinary shares, which will

be subject to transfer restrictions until 90 days following the consummation of the Company’s initial Business Combination.

Simultaneously with the closing of the IPO, the Company consummated the sale of 663,125 Private Placement Units at a price of $ 10.00 per Private Placement Unit, generating gross proceeds of $ 6,631,250 , as follows:

(A) 17,500 Private Placement Units ($ 175,000 in the aggregate) with the Sponsor, (B) (i) 260,000 Private Placement Units and (ii) 162,500 Private Placement Units and 325,000 restricted Class A ordinary shares ($ 4,225,000 in the aggregate) with Sponsor HoldCo, (C) 178,500 Private Placement Units ($ 1,785,000 in the aggregate) with CCM and (D) 44,625 Private Placement Units with Seaport ($ 446,250 in the aggregate).

RELATED PARTY TRANSACTIONS

Founder Shares

On July 12, 2024, Sponsor HoldCo made a capital

contribution of $ 25,000 in consideration for 6,708,333 Class B ordinary shares (the “founder shares”).

Effective as of

January 10, 2025, upon the expiry of the underwriters’ over-allotment option, 875,000 founder shares were forfeited by Sponsor

HoldCo, such that the number of founder shares collectively represents 25 % of the Company’s issued and outstanding shares upon the

completion of the Initial Public Offering.

On August 6, 2024, Sponsor HoldCo transferred 30,000 founder shares to each of the Company’s

independent directors and 130,000 founder shares to the Company’s Executive Chairman (an aggregate of 220,000 ).

The holders of founder shares have agreed, subject

to limited exceptions, not to transfer, assign or sell any of their founder shares until 180 days after completion of the Company’s

initial Business Combination.

On July 12, 2024, Sponsor HoldCo made a capital contribution of $ 25,000 in consideration for 6,708,333 Class B ordinary shares (the “founder shares”).

Effective as of January 10, 2025, upon the expiry of the underwriters’ over-allotment option, 875,000 founder shares were forfeited by Sponsor HoldCo, such that the number of founder shares collectively represents 25 % of the Company’s issued and outstanding shares upon the completion of the IPO.

On August 6, 2024, Sponsor HoldCo transferred 30,000 founder shares to each of the Company’s independent directors and 130,000 founder shares to the Company’s Executive Chairman (an aggregate of 220,000 ).

The holders of founder shares have agreed, subject to limited exceptions, not to transfer, assign or sell any of their founder shares until 180 days after completion of the Company’s initial Business Combination.

Related Party Loans

In order to finance transaction costs in connection

with a Business Combination, either of Sponsor HoldCo, the Sponsor, any of their respective affiliates or certain of the Company’s

directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).

If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account

released to the Company.

In order to finance transaction costs in connection with a Business Combination, either of Sponsor HoldCo, the Sponsor, any of their respective affiliates or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).

If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.

Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account.

event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the

Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

Except for the foregoing,

the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans.

The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the Class A ordinary

share or unit upon the consummation of the initial Business Combination at lender’s discretion, up to $ 2,000,000 of such Working

Capital Loans for each such person may be convertible into a price of $ 10.00 per Class A ordinary share or unit, as applicable, at the

option of the lender.

Such Class A ordinary shares would be identical to the Private Placement Shares, and such units would be identical

to the Private Placement Units.

As of December 31, 2024, there were no Working Capital Loans outstanding.

In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans.

The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the Class A ordinary share or unit upon the consummation of the initial Business Combination at lender’s discretion, up to $ 2,000,000 of such Working Capital Loans for each such person may be convertible into a price of $ 10.00 per Class A ordinary share or unit, as applicable, at the option of the lender.

Such Class A ordinary shares would be identical to the Private Placement Shares, and such units would be identical to the Private Placement Units.

As of December 31, 2025 and 2024, there were no Working Capital Loans outstanding.

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Advisory Agreement

In connection with the transactions contemplated by the Business Combination Agreement, on November 26, 2025, the Company and Sponsor entered into an advisory agreement (the “Advisory Agreement”) pursuant to which the Sponsor will provide certain services to the Company including, without limitation, in each case relating to the Business Combination, assisting the Company in preparing presentations, introducing the Company to potential investors, assisting the Company in arranging meetings with stockholders of PAD to the extent applicable, and assisting the Company with the preparation of any press releases and filings.

The Advisory Agreement provides for the Company to pay to the Sponsor a fee of up to $ 240,000 (which, in the sole discretion of the Company, may be payable in up to 12 monthly installments).

COMMITMENTS AND CONTINGENCIES

Business Combination Agreement

On November 26, 2025, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) by and among the Company, FACT II Acquisition LLC, a Cayman Islands limited liability company (“Sponsor HoldCo”), Patriot Merger Subsidiary, Inc., a Florida corporation and a direct, wholly-owned subsidiary of FACT (“Merger Sub”) and Precision Aerospace & Defense Group, Inc.

(“PAD”), a Florida corporation.

The Business Combination Agreement provides, among other things, that on the terms and subject to the conditions set forth therein:

(i) the Company will domesticate as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law and Part XII of the Companies Act (As Revised) of the Cayman Islands (the “Domestication”);

and (ii) following the Domestication, Merger Sub will merge with and into PAD with PAD surviving the merger as a wholly-owned subsidiary of the Company (the “Merger”), in accordance with the Business Combination Agreement and the Florida Business Corporation Act.

Registration Rights

The holders of the (i) founder shares, (ii) Private

Placement Units, Class A ordinary shares underlying the Private Placement Units, Private Placement Warrants underlying the Private Placement

Units and the Class A ordinary shares underlying such Private Placement Warrants, (iii) restricted Class A ordinary shares, and (iv) any

Private Placement Units that may be issued upon conversion of Working Capital Loans will be entitled to registration rights pursuant to

a registration rights agreement signed prior to the date of the Initial Public Offering requiring the Company to register its securities

held by them for resale (in the case of the founder shares, only after conversion to Class A ordinary shares, and in the case of the restricted

Class A ordinary shares, upon vesting after the consummation of the initial Business Combination).

The holders of these securities will

be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities.

the holders have certain piggyback registration rights with respect to registration statements filed subsequent to the Company’s

completion of its initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule

415 under the Securities Act.

The registration rights agreement provides that the Company will use commercially reasonable efforts to

effect the registration of the applicable securities after the completion of the initial Business Combination and prior to the expiration

of the applicable lock-up period.

The registration rights agreement does not contain liquidating damages or other cash settlement provisions

resulting from delays in registering the Company’s securities.

The Company will bear the expenses incurred in connection with the

filing of any such registration statements.

The holders of the (i) founder shares, (ii) Private Placement Units, Class A ordinary shares underlying the Private Placement Units, Private Placement Warrants underlying the Private Placement Units and the Class A ordinary shares underlying such Private Placement Warrants, (iii) restricted Class A ordinary shares, and (iv) any Private Placement Units that may be issued upon conversion of Working Capital Loans will be entitled to registration rights pursuant to a registration rights agreement signed prior to the date of the IPO requiring the Company to register its securities held by them for resale (in the case of the founder shares, only after conversion to Class A ordinary shares, and in the case of the restricted Class A ordinary shares, upon vesting after the consummation of the initial Business Combination).

The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities.

In addition, the holders have certain piggyback registration rights with respect to registration statements filed subsequent to the Company’s completion of its initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act.

The registration rights agreement provides that the Company will use commercially reasonable efforts to effect the registration of the applicable securities after the completion of the initial Business Combination and prior to the expiration of the applicable lock-up period.

The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities.

The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The Company granted the underwriters a 45 -day

option to purchase up to 2,625,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting

commissions, which option expired effective as of January 10, 2025.

The underwriters were entitled to a cash underwriting

discount of $ 0.20 per Unit, or $ 3,500,000 in the aggregate, which was paid upon the closing of the Initial Public Offering.

the underwriters were entitled to a deferred fee of (i) $ 0.40 per Unit sold in the offering of the Initial Public Offering, or $ 7,000,000

in the aggregate, payable based on the percentage of funds remaining in the Trust Account after redemptions of public shares, solely in

the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

Warrants — As of December

31, 2024, there were 9,081,563 warrants outstanding, including 8,750,000 Public Warrants and 331,563 Private Placement Warrants.

Warrants may only be exercised for a whole number of shares.

The Company granted the underwriters a 45 -day option to purchase up to 2,625,000 additional Units to cover over-allotments at the IPO price, less the underwriting commissions, which option expired effective as of January 10, 2025.

The underwriters were entitled to a cash underwriting discount of $ 0.20 per Unit, or $ 3,500,000 in the aggregate, which was paid upon the closing of the IPO.

In addition, the underwriters were entitled to a deferred fee of $ 0.40 per Unit sold in the offering of the IPO, or $ 7,000,000 in the aggregate, payable based on the percentage of funds remaining in the Trust Account after redemptions of public shares, solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

FACT II ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Warrants — As of December 31, 2025 and 2024, there were 9,081,563 warrants outstanding, including 8,750,000 Public Warrants and 331,563 Private Placement Warrants.

Public Warrants may only be exercised for a whole number of shares.

No fractional shares will be issued upon exercise of the Public Warrants.

The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months

from the closing of the Initial Public Offering.

The Public Warrants will expire five years from the completion of a Business Combination

or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any

Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise

unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of

the warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations

with respect to registration, or a valid exemption from registration is available.

No warrant will be exercisable for cash or on a cashless

basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of

the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption

is available.

The Company has agreed that as soon as practicable,

but in no event later than 15 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts

to file with the SEC a registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares issuable

upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within

60 business days after the closing of a Business Combination and to maintain the effectiveness of such registration statement, and a current

prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement.

Notwithstanding

the above, if the Class A ordinary shares are, at the time of any exercise of a warrant, not listed on a national securities exchange

such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may,

at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance

with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain

in effect a registration statement, but will use its commercially reasonable efforts to register or qualify the shares under applicable

blue sky laws to the extent an exemption is not available.

Redemption of Public Warrants — Once

the warrants become exercisable, the Company may redeem the outstanding Public Warrants:

whole and not in part;

a price of $ 0.01 per Public Warrant;

not less than 30 days’ prior written notice of redemption to each warrant holder;

The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the IPO.

The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available.

No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available.

The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of a Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement.

Notwithstanding the above, if the Class A ordinary shares are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

Redemption of Public Warrants — Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants:

● in whole and not in part;

● at a price of $ 0.01 per Public Warrant;

● upon not less than 30 days’ prior written notice of redemption to each warrant holder;

● if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ 18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to warrant holders.

The Company will not redeem the warrants for cash unless a registration statement under the Securities Act covering the issuance of the shares of Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period, unless the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act.

If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

If the Company calls the warrants for redemption as described in this paragraph, its management will have the option to require any holder that wishes to exercise his, her or its warrant following the notice of redemption to do so on a cashless basis.

In the case of such a cashless exercise, each holder would pay the exercise price by surrendering the public warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value.

The “fair market value” as used in the preceding sentence shall mean the volume-weighted average price of the Class A ordinary shares for the 10 trading day period ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

The Company will not redeem the warrants for cash

unless a registration statement under the Securities Act covering the issuance of the shares of Class A ordinary shares issuable upon

exercise of the warrants is then effective and a current prospectus relating to those Class A ordinary shares is available throughout

the 30-day redemption period, unless the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration

If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is

unable to register or qualify the underlying securities for sale under all applicable state securities laws.

If the Company calls the warrants for redemption

as described in this paragraph, its management will have the option to require any holder that wishes to exercise his, her or its warrant

following the notice of redemption to do so on a cashless basis.

In the case of such a cashless exercise, each holder would pay the exercise

price by surrendering the public warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the

product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value”

(defined below) less the exercise price of the warrants by (y) the fair market value.

The “fair market value” as used in the

preceding sentence shall mean the volume-weighted average price of the Class A ordinary shares for the 10 trading day period ending on

the trading day prior to the date on which the notice of exercise is received by the warrant agent.

In addition, if (x) the Company issues additional

ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination

at an issue price or effective issue price of less than $ 9.20 per ordinary share (with such issue price or effective issue price to be

determined in good faith by its board of directors and, in the case of any such issuance to either of Sponsor HoldCo or its affiliates,

without taking into account any founder shares held by Sponsor HoldCo or such affiliates, as applicable, prior to such issuance) (the

“Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds,

and interest thereon, available for the funding of its initial Business Combination on the date of the completion of its initial Business

Combination (net of redemptions), and (z) the volume weighted average trading price of Class A ordinary shares during the 20 trading day

period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the

“Market Value”) is below $ 9.20 per share, the exercise price of the public warrants will be adjusted (to the nearest cent)

to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, and, in the case of the Public Warrants only, the $ 18.00

per share redemption trigger prices described below under “Redemption of public warrants” will be adjusted (to the nearest

cent) to be equal to 180 % of the higher of the Market Value and the Newly Issued Price.

The Private Placement Warrants sold as part of

the Private Placement Units will be identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except

that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will

not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.

In addition, if (x) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $ 9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by its board of directors and, in the case of any such issuance to either of Sponsor HoldCo or its affiliates, without taking into account any founder shares held by Sponsor HoldCo or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of its initial Business Combination on the date of the completion of its initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $ 9.20 per share, the exercise price of the public warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, and, in the case of the Public Warrants only, the $ 18.00 per share redemption trigger prices described below under “Redemption of public warrants” will be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and the Newly Issued Price.

The Private Placement Warrants sold as part of the Private Placement Units will be identical to the Public Warrants underlying the Units being sold in the IPO, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.

Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable.

SHAREHOLDERS’ DEFICIT

Preference Shares — The

Company is authorized to issue 1,000,000 preference shares with a par value of $ 0.0001 per share, with such designations, voting and other

rights and preferences as may be determined from time to time by the Company’s board of directors.

As of December 31, 2024, there

were no preference shares issued or outstanding.

Class A Ordinary Shares — The

Company is authorized to issue 200,000,000 Class A ordinary shares, with a par value of $ 0.0001 per share.

Holders of Class A ordinary

shares are entitled to one vote for each share.

As of December 31, 2024, there were 988,125 Class A ordinary shares issued and outstanding,

excluding the 17,500,000 shares subject to possible redemption.

Class B Ordinary Shares — The

Company is authorized to issue 20,000,000 Class B ordinary shares, with a par value of $ 0.0001 per share.

Holders of the Class B ordinary

shares are entitled to one vote for each share.

As of December 31, 2024, there were 6,708,333 Class B ordinary shares issued and outstanding,

of which an aggregate of up to 875,000 shares were subject to forfeiture by the holders thereof depending on the extent to which the underwriters’

over-allotment option is exercised so that the number of founder shares will equal 25 % of the Company’s issued and outstanding ordinary

shares after the Initial Public Offering.

Only holders of Class B ordinary shares will have

the right to vote on the election of directors prior to the Business Combination.

Holders of Class A ordinary shares and holders of Class

B ordinary shares will vote together as a single class on all other matters submitted to a vote of the Company’s shareholders except

as otherwise required by law.

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024

The Class B ordinary shares will automatically

convert into Class A ordinary shares at the time of a Business Combination or earlier at the option of the holder, on a one-for-one basis,

subject to adjustment.

In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in

excess of the amounts issued in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which the

Class B ordinary shares will convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and

outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance)

so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on

an as-converted basis, 25 % of the sum of all ordinary shares issued and outstanding upon the completion of the Initial Public Offering

(not including (i) any Class A ordinary shares, subject to vesting and any other restrictions, issued or deemed issued to Sponsor HoldCo

(or its members or affiliates) in connection with the consummation of the Initial Public Offering, (ii) the Class A ordinary shares underlying

the Private Placement Warrants, (iii) any Class A ordinary shares issued to the Sponsor (or its members or affiliates) upon conversion

of Working Capital Loans, and (iv) any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in the

initial business combination).

The term “equity-linked securities” refers to any debt or equity securities that are convertible,

exercisable or exchangeable for Class A ordinary shares, including but not limited to a private placement of equity or debt.

FAIR VALUE MEASUREMENTS

The fair value of the Company’s financial

assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale

of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the

measurement date.

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of

observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions

about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities

based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Preference Shares — The Company is authorized to issue 1,000,000 preference shares with a par value of $ 0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors.

As of December 31, 2025 and 2024, there were no preference shares issued or outstanding.

Class A Ordinary Shares — The Company is authorized to issue 200,000,000 Class A ordinary shares, with a par value of $ 0.0001 per share.

Holders of Class A ordinary shares are entitled to one vote for each share.

As of December 31, 2025 and 2024, there were 988,125 Class A ordinary shares issued and outstanding, excluding the 17,500,000 shares subject to possible redemption.

Class B Ordinary Shares — The Company is authorized to issue 20,000,000 Class B ordinary shares, with a par value of $ 0.0001 per share.

Holders of the Class B ordinary shares are entitled to one vote for each share.

As of December 31, 2025 and 2024, there were 5,833,333 and 6,708,333 Class B ordinary shares issued and outstanding, respectively.

On January 10, 2025, the underwriters’ over-allotment option expired unexercised, resulting in the forfeiture of 875,000 founder shares.

Only holders of Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination.

Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of the Company’s shareholders except as otherwise required by law.

The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination or earlier at the option of the holder, on a one-for-one basis, subject to adjustment.

In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the IPO and related to the closing of a Business Combination, the ratio at which the Class B ordinary shares will convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 25 % of the sum of all ordinary shares issued and outstanding upon the completion of the IPO (not including (i) any Class A ordinary shares, subject to vesting and any other restrictions, issued or deemed issued to Sponsor HoldCo (or its members or affiliates) in connection with the consummation of the IPO, (ii) the Class A ordinary shares underlying the Private Placement Warrants, (iii) any Class A ordinary shares issued to the Sponsor (or its members or affiliates) upon conversion of Working Capital Loans, and (iv) any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in the initial business combination).

The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for Class A ordinary shares, including but not limited to a private placement of equity or debt.

NOTE 8 — FAIR VALUE MEASUREMENTS

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date.

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Quoted prices in active markets for identical assets or liabilities.

3 unchanged sentences

Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability.

The following table presents information about

the Company’s assets and liabilities that are measured at fair value as of December 31, 2024, and indicates the fair value hierarchy

of the valuation inputs the Company utilized to determine such fair value:

Over-allotment option liability

The over-allotment option was accounted for as

a liability in accordance with ASC 815-40 and was presented within liabilities on the balance sheet.

The over-allotment option liability

is measured at fair value at inception and on a recurring basis, with changes in fair value presented within changes in fair value of

over-allotment option liability in the statement of operations.

The Company used a Black-Scholes model to value

the over-allotment option.

The over-allotment option liability was classified within Level 3 of the fair value hierarchy at the measurement

dates due to the use of unobservable inputs inherent in pricing models are assumptions related to expected share-price volatility, expected

life and risk-free interest rate.

The Company estimates the volatility of its ordinary shares based on historical volatility that matches

the expected remaining life of the option.

The risk-free interest rate is based on the U.S.

Treasury zero-coupon yield curve on the grant

date for a maturity similar to the expected remaining life of the option.

The expected life of the option is assumed to be equivalent

to their remaining contractual term.

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

The key inputs into the Black-Scholes model

were as follows at the December 31, 2024 and the at initial measurement date of the over-allotment option:

The following table presents information about the Company’s assets and liabilities that are measured at fair value as of December 31, 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Level December 31,

Over-allotment option liability 3 $ 26,558

The over-allotment option was accounted for as a liability in accordance with ASC 815-40 and was presented within liabilities on the balance sheet.

The over-allotment option liability is measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of over-allotment liability in the statement of operations.

The Company used a Black-Scholes model to value the over-allotment option.

The over-allotment option liability was classified within Level 3 of the fair value hierarchy at the measurement dates due to the use of unobservable inputs inherent in pricing models are assumptions related to expected share-price volatility, expected life and risk-free interest rate.

The Company estimates the volatility of its ordinary shares based on historical volatility that matches the expected remaining life of the option.

The risk-free interest rate is based on the U.S.

Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the option.

The expected life of the option is assumed to be equivalent to their remaining contractual term.

The key inputs into the Black-Scholes model were as follows at December 31, 2024 and the at initial measurement date of the over-allotment option:

Inputs December 31,

Risk-free interest rate 4.40 %

2 unchanged sentences

Exercise price $ 10.00

Inputs November 27,

Risk-free interest rate 4.76 %

2 unchanged sentences

Exercise price $ 10.00

The fair value of the Public Warrants as of November

27, 2024, the date of the IPO was $ 525,000 , or $ 0.06 per Public Warrant.

The fair value of the Public Warrants was determined using the

Monte Carlo Simulation Model.

The Public Warrants have been classified within shareholders’ deficit and will not require remeasurement

after issuance.

The following table presents the quantitative information regarding market assumptions used in the valuation of the Public

The fair value of the Public Warrants as of November 27, 2024, the date of the IPO was $ 525,000 , or $ 0.06 per Public Warrant.

The fair value of the Public Warrants was determined using the Monte Carlo Simulation Model.

The Public Warrants have been classified within shareholders’ deficit and will not require remeasurement after issuance.

The following table presents the quantitative information regarding market assumptions used in the valuation of the Public Warrants:

Estimated share price $ 9.92

Exercise price $ 11.50

Term (years) 6.50

Risk-free rate 4.07 %

Selected volatility 2.7 %

Public Warrants are not remeasured subsequent

to the date of the Initial Public Offering.

SEGMENT INFORMATION

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 CODM, or group, in deciding how to allocate resources and assess performance.

The Company’s CODM has been identified as

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

On January 10, 2025, the underwriters’ election to exercise their over-allotment option expired unexercised, resulting in the forfeiture of 875,000 founder shares and the elimination of the corresponding over-allotment option liability.

Public Warrants are not remeasured subsequent to the date of the IPO.

FACT II ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

The CODM assesses performance for the single segment

and decides how to allocate resources based on net income (loss) that also is reported on the statement of operations as net income (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 (loss) and total assets, which

include the following:

NOTE 9 — SEGMENT INFORMATION

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 (“CODM”), or group, in deciding how to allocate resources and assess performance.

The Company’s CODM has been identified as 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 that also is reported on the statements of operations as net income.

The measure of segment assets is reported on the balance sheets 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 and total assets, which include the following:

December 31, December 31,

Trust Account $ 183,785,456 $ 176,597,270

$ 176,597,270

General and administrative costs

Cash $ 544,791 $ 1,447,921

General and administrative expenses $ 2,225,030 $ 1,079,899

Interest earned on cash held in Trust Account $ 7,188,186 $ 722,270

The CODM reviews interest earned on cash held

in Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account

funds while maintaining compliance with the Trust Agreement.

General and administrative costs 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 Extension 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

(loss) are reported on the statement of operations and described within their respective disclosures.

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

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

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

SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions

that occurred after the balance sheet date up to the date that the financial statements were issued.

Based upon this review and other

than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial

On January 10, 2025, the underwriters’ election

to exercise their over-allotment option expired unexercised, resulting in the forfeiture of 875,000 founder shares.

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued.

Based upon this review and other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

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-K

Item 9A. Controls and Procedures