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Item 1. Financial Statements

2026-08-12 compared with 2026-05-11 · 100 added, 75 removed, 285 unchanged (38% of the section changed)

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TOTAL ASSETS $ 187,149,343 $ 184,422,847

LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT

LIABILITIES, ORDINARY SHARES SUBJECT TO

POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT

Current liabilities

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COMMITMENTS AND CONTINGENCIES (Note 6)

Class A ordinary shares subject to possible redemption, 17,500,000 shares at redemption value of approximately $ 10.59 and $ 10.50 per share at March 31, 2026 and December 31, 2025, respectively 185,334,240 183,785,456

Class A ordinary shares subject to possible redemption, 17,500,000 shares at redemption value of approximately $ 10.68 and $ 10.50 per share at June 30, 2026 and December 31, 2025, respectively 186,893,545 183,785,456

SHAREHOLDERS’ DEFICIT

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1,000,000 shares authorized;

none issued and outstanding at March 31, 2026 and December 31, 2025 — —

none issued and outstanding at June 30, 2026 and December 31, 2025 — —

Class A ordinary shares, $ 0.0001 par value;

200,000,000 shares authorized;

988,125 issued and outstanding at March 31, 2026 and December 31, 2025 (excluding 17,500,000 shares subject to possible redemption) 99 99

988,125 shares issued and outstanding at June 30, 2026 and December 31, 2025 (excluding 17,500,000 shares subject to possible redemption) 99 99

Class B ordinary shares, $ 0.0001 par value;

20,000,000 shares authorized;

5,833,333 shares issued and outstanding at March 31, 2026 and December 31, 2025 583 583

5,833,333 shares issued and outstanding at June 30, 2026 and December 31, 2025 583 583

Additional paid-in capital — —

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

the Three Months Ended

For the Three Months Ended

For the Six Months Ended

General and administrative expenses $ 700,265 $ 199,558 $ 1,217,881 $ 563,903

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IN SHAREHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2026

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

Ordinary Shares

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Balance – March 31, 2026 (unaudited) 988,125 99 5,833,333 583 — ( 9,039,414 ) ( 9,038,732 )

FOR THE THREE MONTHS ENDED MARCH 31, 2025

Accretion for common stock to redemption amount — — — — — ( 1,559,305 ) ( 1,559,305 )

Net income — — — — — 859,927 859,927

Balance – June 30, 2026 (unaudited) 988,125 $ 99 5,833,333 $ 583 $ — $ ( 9,738,792 ) $ ( 9,738,110 )

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

Ordinary Shares

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Balance – March 31, 2025 (unaudited) 988,125 99 5,833,333 583 — ( 6,691,902 ) ( 6,691,220 )

Accretion for common stock to redemption amount — — — — — ( 1,819,161 ) ( 1,819,161 )

Net income — — — — — 1,631,524 1,631,524

Balance – June 30, 2025 (unaudited) 988,125 $ 99 5,833,333 $ 583 $ — $ ( 6,879,539 ) $ ( 6,878,857 )

The accompanying notes are an integral part of

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

For the Six Months Ended

Cash Flows from Operating Activities:

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

JUNE 30, 2026

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

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

There was no activity for the period from June 19, 2024 (inception) through March 31, 2026 besides the Company’s formation, initial public offering (the “IPO”), and searching for a Business Combination opportunity, which are described below.

As of June 30, 2026, the Company had not commenced any operations.

The Company’s activities for the period from June 19, 2024 (inception) through June 30, 2026 were limited to the Company’s formation, activities relating to its initial public offering (the “IPO”), identifying and evaluating prospective target businesses and negotiating and pursuing the proposed PAD Business Combination (as defined below), which are described below.

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

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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 (as defined below) at the date of the IPO.

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 in Note 5) and (ii) purchased Private Placement Securities (as defined below) at the date of the IPO.

The registration statement for the Company’s IPO was declared effective on November 25, 2024.

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(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.

Financial Group, LLC (“CCM”) and (D) 44,625 Private Placement Units ($ 446,250 in the aggregate) with Seaport Global Securities LLC (“Seaport”) (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) (i) are subject to certain limited exceptions and will be subject to transfer restrictions until 180 days following the consummation of the Company’s initial Business Combination and (ii) are 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.

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There is no assurance that the Company will be able to successfully effect a Business Combination.

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.

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 a 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.

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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 Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.”

The Class A ordinary shares were recorded at redemption value and classified as temporary equity at the completion of the IPO, in accordance with Financial Accounting Standard Board (“FASB”) 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.

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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), (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, or (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.

The Company has 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 pursuant to the Company’s Amended and Restated Memorandum and Articles of Association (the “Extension Period”) to complete a Business Combination.

On November 26, 2025, the Company entered into a business combination agreement, as amended by Amendment No.

1 thereto dated May 17, 2026 (the “PAD Business Combination Agreement” and the transactions contemplated thereby, including the Domestication and the Merger, each as defined below, the “PAD Business Combination”), by and among the Company, Sponsor HoldCo, Patriot Merger Subsidiary, Inc., a Florida corporation and a direct, wholly-owned subsidiary of the Company (“Merger Sub”), and Precision Aerospace & Defense Group, Inc., a Florida corporation (“PAD”).

As a result of executing the PAD Business Combination Agreement within 18 months from the closing of the IPO, the Company has until November 27, 2026 to consummate its initial 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.

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Risks and Uncertainties

The United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from global conflicts, including from the ongoing Russia-Ukraine and Israel-Hamas conflicts, the war in Iran, and recent developments to trade and tariff policies of the United States and other countries.

The United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from global conflicts, including from the ongoing Russia-Ukraine and Israel-Hamas conflicts, the war in Iran, and certain 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.

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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, the war in Iran 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 ability to consummate an initial Business Combination or search for any target business with which the Company may ultimately consummate an initial Business Combination.

Proposed Business Combination with Precision Aerospace & Defense Group, Inc.

On November 26, 2025, the Company entered into a business combination agreement (the “Business Combination Agreement” and the transactions contemplated thereby, including the Domestication and the Merger, each as defined below, the “PAD Business Combination”) by and among the Company, Sponsor HoldCo, Patriot Merger Subsidiary, Inc.

(“Merger Sub”), and Precision Aerospace & Defense Group, Inc., a Florida corporation (“PAD”).

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.

Consummation of the transactions contemplated by the Business Combination Agreement are subject to customary conditions of the respective parties, including the approval of the Business Combination Agreement, the PAD Business Combination and certain other actions related thereto by the Company’s shareholders.

For more information, see Note 6.

Termination of the Business Combination with Precision Aerospace & Defense Group, Inc.

On November 26, 2025, the Company entered into the PAD Business Combination Agreement.

The PAD Business Combination Agreement provided, among other things, that on the terms and subject to the conditions set forth therein:

(i) the Company would 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 would merge with and into PAD with PAD surviving the merger as a wholly-owned subsidiary of the Company (the “Merger”), in accordance with the PAD Business Combination Agreement and the Florida Business Corporation Act.

Consummation of the transactions contemplated by the PAD Business Combination Agreement was subject to customary conditions of the respective parties, including the approval of the PAD Business Combination Agreement, the PAD Business Combination and certain other actions related thereto by the Company’s shareholders.

On July 16, 2026, the PAD Business Combination Agreement was terminated in accordance with the terms set forth therein (the “Termination”).

No termination fee was payable by either party.

As a result of the Termination, the PAD Support Agreements (as defined in Note 9) terminated in accordance with their respective terms.

Following the Termination, the Company intends to continue to identify and evaluate opportunities to consummate an initial Business Combination.

SIGNIFICANT ACCOUNTING POLICIES

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Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of adjustments of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 13, 2026.

The interim results for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future periods.

The interim results for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future periods.

Principles of Consolidation

The Company has one wholly-owned subsidiary, Patriot Merger Subsidiary, Inc., which was incorporated in Florida.

The subsidiary was formed for purposes of consummating the PAD Business Combination and was formed on November 7, 2025.

The subsidiary was formed on November 7, 2025 for purposes of consummating the PAD Business Combination.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and Merger Sub.

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Going Concern

In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Subtopic 205-40, “Presentation of Financial Statements – Going Concern,” management has determined that the Company’s liquidity condition, the limited period remaining to identify and complete an alternative initial Business Combination following the Termination, and the Company’s liquidation date of November 27, 2026, 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 Extension Period.

As of March 31, 2026, the Company had $ 412,909 in its operating bank account and working capital of $ 342,233 .

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.

As of June 30, 2026, the Company had $ 170,477 in its operating bank account and working capital of $ 104,855 .

The Company believes its cash on hand will not be sufficient to fund its operating expenses and working capital requirements for the next twelve months, raising liquidity concerns that are discussed above.

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 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 pay directors’ and officers’ liability insurance premiums.

Emerging Growth Company

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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 $ 250,000 in cash as of March 31, 2026 and December 31, 2025.

The Company had $ 162,909 and $ 294,791 in cash equivalents as of March 31, 2026 and December 31, 2025, respectively.

The Company had $ 170,477 and $ 250,000 in cash as of June 30, 2026 and December 31, 2025, respectively.

The Company had $ 0 and $ 294,791 in cash equivalents as of June 30, 2026 and December 31, 2025, respectively.

Cash Held in Trust Account

As of March 31, 2026 and December 31, 2025, all of the assets held in the Trust Account were held in a demand deposit account.

As of June 30, 2026 and December 31, 2025, all of the assets held in the Trust Account were held in a demand deposit account.

Concentration of Credit Risk

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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 warrants sold as part of the Units in our IPO (“Public Warrants”) and Private Placement Units were charged to shareholders’ deficit as the Public Warrants and warrants sold as part of the Private Placement Units (“Private Placement Warrants”), after management’s evaluation, were accounted for under equity treatment.

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 the 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 warrants sold as part of the Units in the Company’s IPO (“Public Warrants”) and Private Placement Units were charged to shareholders’ deficit as the Public Warrants and warrants sold as part of the Private Placement Units (“Private Placement Warrants”), after management’s evaluation, were accounted for under equity treatment.

Fair Value of Financial Instruments

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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 March 31, 2026 and December 31, 2025.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2026 and December 31, 2025.

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

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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 statements 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.

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Weighted average shares were reduced for the effect of an aggregate of 875,000 ordinary shares that were forfeited upon the expiration of the over-allotment option granted to the underwriters, effective as of January 10, 2025.

As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the period presented.

As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the periods presented.

The following table presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for each class of ordinary shares:

For the Three Months Ended

March 31, 2026 For the Three Months Ended

March 31, 2025

Class A Class B Class A Class B

For the Six Months Ended

2026 2025 2026 2025

Class A Class B Class A Class B Class A Class B Class A Class B

Allocation of net income, basic and diluted $ 653,679 $ 206,248 $ 1,240,214 $ 391,310 $ 1,439,783 $ 454,277 $ 2,340,843 $ 738,578

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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 March 31, 2026 and December 31, 2025, 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 condensed consolidated balance sheets.

As of March 31, 2026 and December 31, 2025, the Class A ordinary shares subject to possible redemption reflected in the condensed consolidated balance sheets are reconciled in the following table:

Accordingly, as of June 30, 2026 and December 31, 2025, 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 condensed consolidated balance sheets.

As of June 30, 2026 and December 31, 2025, the Class A ordinary shares subject to possible redemption reflected in the condensed consolidated balance sheets are reconciled in the following table:

Class A ordinary shares subject to possible redemption, December 31, 2024 $ 176,597,270

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Class A ordinary shares subject to possible redemption, March 31, 2026 185,334,240

Accretion for common stock to redemption amount 1,559,305

Class A ordinary shares subject to possible redemption, June 30, 2026 $ 186,893,545

Recently Issued Accounting Standards

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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).

(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 ($446,250 in the aggregate) with Seaport.

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) (i) are subject to certain limited exceptions and will be subject to transfer restrictions until 180 days following the consummation of the Company’s initial Business Combination and (ii) are entitled to registration rights.

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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.

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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.

Upon consummation of a Business Combination, the Working Capital Loans would either be repaid, without interest, or, at the lender’s discretion, up to $ 2,000,000 of such Working Capital Loans may be convertible into Class A ordinary shares or units at a price of $ 10.00 per Class A ordinary share or unit, as applicable.

Such Class A ordinary shares would be identical to the Class A ordinary shares sold as part of the Private Placement Units (“Private Placement Shares”), and such units would be identical to the Private Placement Units.

As of March 31, 2026 and December 31, 2025, there were no Working Capital Loans outstanding.

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.

As of June 30, 2026 and December 31, 2025, there were no Working Capital Loans outstanding.

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.

In connection with the transactions contemplated by the PAD Business Combination Agreement, on November 26, 2025, the Company and the Sponsor entered into an advisory agreement (the “Advisory Agreement”) pursuant to which the Sponsor agreed to 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 target company stockholders, 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).

For the three months ended March 31, 2026, the Company did not incur any fees.

For the three and six months ended June 30, 2026, the Company did no t incur any fees.

Senior Advisor Services Agreement

In connection with the transactions contemplated by the Business Combination Agreement, on December 1, 2025, the Company and Annie Gishen entered into a senior advisor services agreement (the “Services Agreement”) pursuant to which Ms.

Gishen will provide certain services to the Company including, without limitation, providing support to our Chief Executive Officer, the board of directors, and the partners of the Sponsor, undertaking special tasks or project work delegated by the senior management team and providing such other services as the Company reasonably requests.

Gishen is the daughter of Adam Gishen, our Chief Executive Officer.

In connection with the transactions contemplated by the PAD Business Combination Agreement, on December 1, 2025, the Company and Annie Gishen entered into a senior advisor services agreement (the “Services Agreement”) pursuant to which Ms.

Gishen will provide certain services to the Company including, without limitation, providing support to the Company’s Chief Executive Officer, the board of directors, and the partners of the Sponsor, undertaking special tasks or project work delegated by the senior management team and providing such other services as the Company reasonably requests.

Gishen is the daughter of Adam Gishen, the Company’s Chief Executive Officer.

The Services Agreement provides for the Company to pay Ms.

Gishen a monthly fee of $ 4,000 .

For the three months ended March 31, 2026, the Company incurred a total of $ 12,000 in fees associated with the Services Agreement.

For the three and six months ended June 30, 2026, the Company incurred a total of $ 12,000 and $ 24,000 in fees associated with the Services Agreement, respectively.

COMMITMENTS AND CONTINGENCIES

Business Combination Agreement

On November 26, 2025, the Company entered into the Business Combination Agreement by and among the Company, Sponsor HoldCo, Merger Sub and PAD.

The Business Combination Agreement provides, among other things, that on the terms and subject to the conditions set forth therein:

Termination of the PAD Business Combination Agreement

The PAD Business Combination Agreement provided, among other things, that on the terms and subject to the conditions set forth therein:

and (ii) following the Domestication, Merger Sub would merge with and into PAD, with PAD surviving the merger as a wholly-owned subsidiary of the Company (the “Merger”), in accordance with the PAD Business Combination Agreement and the Florida Business Corporation Act.

On July 16, 2026, the PAD Business Combination Agreement was terminated in accordance with its terms.

No termination fee was payable by either party.

As a result of the Termination, the PAD Support Agreements (as defined in Note 9) terminated in accordance with their respective terms.

Registration Rights

9 unchanged sentences

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.

As of March 31, 2026 and December 31, 2025, there were 9,081,563 warrants outstanding, including 8,750,000 Public Warrants and 331,563 Private Placement Warrants.

As of June 30, 2026 and December 31, 2025, 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.

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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 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.

The Private Placement Warrants sold as part of the Private Placement Units will be identical to the Public Warrants underlying the Units 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.

1 unchanged sentence

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 March 31, 2026 and December 31, 2025, there were no preference shares issued or outstanding.

As of June 30, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025, there were 988,125 Class A ordinary shares issued and outstanding, excluding the 17,500,000 shares subject to possible redemption.

As of June 30, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025, there were 5,833,333 Class B ordinary shares issued and outstanding.

As of June 30, 2026 and December 31, 2025, there were 5,833,333 Class B ordinary shares issued and outstanding.

On January 10, 2025, the underwriters’ over-allotment option expired unexercised, resulting in the forfeiture of 875,000 founder shares.

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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:

March 31, December 31,

June 30, December 31,

Cash and cash equivalents $ 170,477 $ 544,791

Cash held in Trust Account $ 186,893,545 $ 183,785,456

Three Months Ended

For the Three Months Ended

June 30, For the Six Months Ended

2026 2025 2026 2025

General and administrative expenses $ 700,265 $ 199,558 $ 1,217,881 $ 563,903

Interest earned on cash held in Trust Account $ 1,559,305 $ 1,819,161 $ 3,108,089 $ 3,604,845

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 Investment Management Trust Agreement, dated November 25, 2024, between the Company and Odyssey Transfer and Trust Company.

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.

The CODM reviews interest earned on cash held in the 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 Investment Management Trust Agreement, dated November 25, 2024, between the Company and Odyssey Transfer and Trust Company.

General and administrative costs are reviewed and monitored by the CODM to manage and forecast cash to ensure that sufficient 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 that costs are aligned with all agreements and the Company’s budget.

General and administrative expenses, as reported on the unaudited condensed consolidated statements of operations, are the significant segment expenses provided to the CODM on a regular basis.

1 unchanged sentence

SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the condensed consolidated balance sheet date up to the date that the unaudited condensed consolidated financial statements were issued.

Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

The Company evaluated subsequent events and transactions that occurred after the condensed consolidated balance sheet date up to the date on which the unaudited condensed consolidated financial statements were issued.

Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

On July 16, 2026, the PAD Business Combination Agreement was terminated in accordance with its terms.

No termination fee was payable by either party.

As a result of the Termination, the voting and support agreement, dated November 26, 2025, by and among Sponsor HoldCo, the Company and PAD (the “Sponsor Support Agreement”), terminated in accordance with its terms, and the voting and support agreements, dated January 6, 2026 and January 19, 2026, by and among PAD, the Company and certain stockholders of PAD (the “PAD Stockholder Support Agreements,” and together with the Sponsor Support Agreement, the “PAD Support Agreements”), terminated in accordance with their respective terms.

Following the Termination, the Company intends to continue to identify and evaluate opportunities to consummate an initial Business Combination.

The Company must complete an initial Business Combination by November 27, 2026, unless the period within which it must complete an initial Business Combination is extended pursuant to the Company’s Amended and Restated Memorandum and Articles of Association.

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

What changed 10-Q

Item 1. Financial Statements