FACT II Acquisition Corp. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were effective as of the end of the annual period ended December 31, 2025. Management’s Report on Internal Controls Over Financial Reporting As 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. GAAP. Our internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, (2) provide 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 (3) provide 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. 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. This 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. Changes in Internal Control over Financial Reporting There 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. Item 9B. Other Information. None . Item 9C. Disclosures Regarding Foreign Jurisdiction that Prevent Inspections. None. 78 Part III Item 10. Directors, Executive Officers and Corporate Governance. Our directors and officers are as follows: Name Age Title Robert Rackind 54 Executive Chairman and Director Adam Gishen 51 Chief Executive Officer and Director Min Lee 46 Chief Financial Officer Nell Cady-Kruse 64 Director James Rallo 60 Director Hella Alashkar 43 Director Robert Rackind, Executive Chairman Robert Rackind is our Executive Chairman. Mr. Rackind is a global real estate investment, management, and development professional with over 30 years of top-down investment and finance experience, combined with bottom-up development and asset management expertise. He has managed and invested over €50 billion across various jurisdictions, including the UK, France, Switzerland, Germany, Spain, Italy, Luxembourg, the Nordics, Asia-Pacific, and North America. His expertise spans a wide range of asset classes, such as office, logistics, industrial, residential, care homes, student accommodation, build-to-rent, and hotels. Mr. Rackind recently 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). His responsibilities included investments through direct, indirect, close-ended, open-ended, co-investment, joint ventures, and listed vehicles. Notably, Mr. Rackind identified and helped close the $830 million acquisition of the Diplomat Hotel and Convention Centre in Hollywood Beach, Florida. Prior to his tenure at CSAM, Mr. 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. Mr. 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. Mr. 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. Given Mr. 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. Adam Gishen, Chief Executive Officer Adam Gishen is our Chief Executive Officer and a director. Mr. Gishen previously served as the Chief Executive Officer of Freedom Acquisition I Corp. 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 Inc. Mr. Gishen has over 20 years of experience in financial services. Mr. 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. 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. 79 Min Lee, Chief Financial Officer Min Lee is our Chief Financial Officer. Mr. Lee has approximately 20 years of financial experience and previously served as Senior Advisor of Freedom Acquisition I Corp. from 2021 to 2023. In 2019, Mr. 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 value. Prior to 2006, Mr. 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 risks. Mr. 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, Director Nell 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. 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. 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. Ms. 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. Ms. 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. Ms. 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. 80 James Rallo, Director James Rallo has served as our director since November 25, 2024. Mr. 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: XMTR), a leading technology company in the advanced manufacturing industry. As 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. 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. Prior to that, Mr. Rallo was an investment banker for five years focused on IPOs, mergers and acquisitions, and debt and equity fundraising. Mr. Rallo started his career at Deloitte and spent 5 years as a public accountant. Mr. Rallo holds an MBA from the Robert H. 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 candidates. Hella Alashkar, Director Hella Alashkar has served as our director since November 25, 2024. Ms. 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 propositions; and, more recently, she has focused on investments in high-impact companies catalyzing transformative change in hard-to-abate industries. In 2013, Ms. 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. 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. Ms. 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. Ms. 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. Her 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. Family Relationships No family relationships exist between any of our directors or executive officers. Prior Blank Check Experience Our 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. Mr. 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. (Nasdaq: SPWR), and at Credit Suisse running its Global Investor Relations and Corporate Communications functions. 81 Mr. Lee has approximately 20 years of financial experience and previously served as Senior Advisor of Freedom Acquisition I Corp. from 2021 to 2023. Mr. 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. Mr. Nespola has over 24 years of experience as an operator and private investor and previously served as Senior Advisor of Freedom Acquisition I Corp. 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. Previously, Mr. Nespola was a member of the leadership team of Liquidity Services (Nasdaq: LQDT); 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. Mr. Nespola is also a Partner in Quimby Ventures where he oversees alternative fund investments. Mr. Nespola has his MBA from the NYU Stern School of Business and holds his BA from Washington University in St Louis. Mr. 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. Mr. 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. Mr. 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. We believe that the collective experience of the team members of our sponsor, in combination with their deep and broad global network of relationships across public and private sectors in both mature as well as emerging markets, provides us with a competitive advantage to identify, structure, finance and acquire the operations of a compelling target business. In pursuing our strategy of creating a strong operating company, capable of scaling up and generating free cash flow, we intend to add value to the target business through active engagement with its management team, and enabling that company to leverage the benefits of scale to grow and increase profitability. The 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. Number and Terms of Office of Officers and Directors Our board of directors consists of five members. Prior to our initial business combination, holders of our founder shares will have the right to vote to appoint all of our directors and remove members of the board of directors for any reason, and holders of our public shares will not have the right to vote on the appointment of directors during such time. These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by at least 90% of holders of our ordinary shares who, being eligible, attend (in person or by proxy) and vote at a general meeting of the company. Each of our directors will generally hold 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: 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. The current Class I Director is Hella Alashkar; the current Class II Directors are Nell Cady-Kruse and James Rallo; and the current Class III Directors are Adam Gishen and Robert Rackind. 82 Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our amended and restated memorandum and articles of association as it deems appropriate. Director Independence Nasdaq listing standards require that a majority of our board of directors be independent within one year of our initial public offering. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. We have three “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our board has determined that each of Nell Cady-Kruse, James Rallo, and Hella Alashkar is an independent director under applicable SEC rules and the Nasdaq listing standards. Our independent directors will have regularly scheduled meetings at which only independent directors are present. Committees of the Board of Directors Our board of directors has three standing committees: an audit committee in compliance with Section 3(a)(58)(A) of the Exchange Act, a compensation committee and a nominating and corporate governance committee, each comprised of independent directors. Each committee operates under a charter that was approved by our board of directors and has the composition and responsibilities described below. The 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. Audit Committee We have established an audit committee of the board of directors. The members of our audit committee are James Rallo, Nell Cady-Kruse, and Hella Alashkar. James Rallo serves as chair of the audit committee. Each member of the audit committee is financially literate and our board of directors has determined that James Rallo qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise. We have adopted an audit committee charter, which details the purpose and principal functions of the audit committee, including: ● assisting 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; ● the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm and any other independent registered public accounting firm engaged by us; 83 ● pre-approving all audit and non-audit services to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; ● reviewing and discussing with the independent registered public accounting firm all relationships the independent registered public accounting firm has with us in order to evaluate their continued independence; ● setting clear hiring policies for employees or former employees of the independent registered public accounting firm; ● setting clear policies for audit partner rotation in compliance with applicable laws and regulations; ● obtaining 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; ● meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent registered public accounting firm, including reviewing our specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; ● reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and ● reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. Compensation Committee We have established a compensation committee of the board of directors. Under Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent. The members of our compensation committee are Hella Alashkar, Nell Cady-Kruse and James Rallo. Hella Alashkar serves as chair of the compensation committee. We 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 in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; ● reviewing 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; ● reviewing our executive compensation policies and plans; ● implementing and administering our incentive compensation equity-based remuneration plans; 84 ● assisting management in complying with our proxy statement and annual report disclosure requirements; ● approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; ● producing a report on executive compensation to be included in our annual proxy statement; and ● reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC. Nominating and Corporate Governance Committee We have established a nominating and corporate governance committee of the board of directors. The members of our nominating and corporate governance committee are Nell Cady-Kruse, James Rallo and Hella Alashkar. Nell Cady-Kruse serves as chair of the nominating and corporate governance committee. We have adopted a nominating and corporate governance committee charter, which details the principal functions of the nominating and corporate governance committee, including: ● identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the board of directors, and recommending to the board of directors candidates for nomination for election at the annual general meeting or to fill vacancies on the board of directors; ● developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines; ● coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the company; and ● reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary. The charter also provides that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and is directly responsible for approving the search firm’s fees and other retention terms. Director Nominations Our nominating and corporate governance committee will recommend to the board of directors candidates for nomination for appointment at the annual general meeting. We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders. Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination to our board of directors. 85 Clawback Policy The 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. Our clawback policy is filed with this Annual Report as Exhibit 97.1. Code of Ethics We adopted a code of business conduct and ethics (our “Code of Ethics”) applicable to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The 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 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. Insider Trading Policy 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. Conflicts of Interest Under Cayman Islands law, directors and officers owe the following fiduciary duties: ● duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; ● duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; ● duty to not improperly fetter the exercise of future discretion; ● duty to exercise powers fairly as between different sections of shareholders; ● duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and ● duty to exercise independent judgment. 86 In addition to the above, directors also owe a duty of care, which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge, skill and experience of that director. As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders; provided that there is full disclosure by the directors. This can be done by way of permission granted in the amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings. In addition, members of our management team and our board of directors directly or indirectly own founder shares and/or private placement units, and, accordingly, 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. Sponsor Holdco paid a nominal aggregate purchase price of $25,000 for the founder shares, or approximately $0.0037 per share. Accordingly, our management team, which owns interests in Sponsor Holdco, through our sponsor, and directors who own founder shares may be more willing to pursue a business combination with a riskier or less-established target business than would be the case if Sponsor Holdco had paid the same per share price for the founder shares as our public shareholders paid for their public shares. Certain members of our management team may receive compensation upon consummation of our initial business combination, and accordingly, they 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 as such compensation will not be received unless we consummate such business combination. In the event our sponsor or members of our management team provide loans to us to finance transaction costs and/or incur expenses on our behalf in connection with an initial business combination, such persons 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 as such loans may not be repaid and/or such expenses may not be reimbursed unless we consummate such business combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, either of Sponsor HoldCo, our sponsor, any of their respective affiliates or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up 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. Similarly, if we agree to pay our sponsor or a member of our management team a finder’s fee, advisory fee, consulting fee or success fee in order to effectuate the completion of our initial business combination, such persons 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 as any such fee may not be paid unless we consummate such business combination. Our management team, in their capacities as directors, officers or employees of our sponsor or its affiliates or in their other endeavors, may choose to present potential business combinations to the related entities described above, current or future entities affiliated with or managed by either of Sponsor HoldCo, our sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under Cayman Islands law and any other applicable fiduciary duties. 87 Our directors and officers presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity, or in the case of a non-compete restriction, may not present such opportunity to us at all, subject to his or her fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association 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 business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other. Our directors and officers are also not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. 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. Potential investors should also be aware of the following potential conflicts of interest: ● None of our directors or officers is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities. ● In the course of their other business activities, our directors and officers may become aware of investment and business opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. ● Our sponsor, initial shareholders, directors and officers have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the consummation of our initial business combination. Additionally, our sponsor and initial shareholders have agreed to waive their redemption rights with respect to their founder shares 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 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 business combination. 88 ● Our directors and officers may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether to proceed with a particular business combination. ● Our directors and officers may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such directors and officers was included by a target business as a condition to any agreement with respect to our initial business combination. ● On October 14, 2024, a member of our sponsor (the “Borrower”), issued a promissory note in the principal amount of up to £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 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. 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. The conflicts described above may not be resolved in our favor. Accordingly, as a result of multiple business affiliations, our directors and officers have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Below is a table summarizing the entities to which our directors and officers and certain of our affiliates currently have fiduciary duties or contractual obligations that may present a conflict of interest: Individual Entity Entity’s Business Affiliation Robert Rackind — — — Adam Gishen SunPower Inc. Solar technology, services and installation company Director Min Lee BFY Capital Specialized financing company in natural products industry Managing Member Pavilion Entertainment Television and film production and distribution company Investor and advisor Nell Cady-Kruse Varagon Capital Corp. Business development company Director 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 James Rallo — — — Hella Alashkar 1648 Capital Venture capital firm with consulting and advisory services Co-Founder 89 We are not prohibited from pursuing an initial business combination with a company that is affiliated with either of Sponsor HoldCo, our sponsor, our directors or officers, or non-managing HoldCo investors, or making the acquisition through a joint venture or other form of shared ownership with either of Sponsor HoldCo, our sponsor, our directors or officers, or non-managing HoldCo investors; accordingly, such affiliated person(s) 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 as such affiliated person(s) would have interests different from our public shareholders and would likely not receive any financial benefit unless we consummated such business combination. In the event we seek to complete our initial business combination with such a company, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking firm that is a member of FINRA or from a valuation or appraisal firm that such an initial business combination is fair to our shareholders from a financial point of view. Furthermore, in no event will Sponsor Holdco, our sponsor or any of our directors or existing officers, or any of their respective affiliates, be paid by the company any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination. In addition, pursuant to Nasdaq listing rules, our initial business combination must be approved by a majority of our independent directors. In addition, Sponsor HoldCo, our sponsor or any of their respective affiliates may make additional investments in the company in connection with the initial business combination, although Sponsor HoldCo, our sponsor and their affiliates have no obligation or current intention to do so. If Sponsor HoldCo, our sponsor or any of their respective affiliates elects to make additional investments, such proposed investments could influence Sponsor HoldCo and our sponsor’s motivation to complete an initial business combination. In the event that we submit our initial business combination to our public shareholders for a vote, our sponsor, initial shareholders, directors and officers have agreed, pursuant to the terms of a letter agreement entered into with us, to vote any founder shares and public shares held by them in favor of our initial business combination. 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. 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. Limitation on Liability and Indemnification of Officers and Directors Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of directors and officers, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association provide for indemnification of our directors and officers to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We maintain a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors. We also entered into indemnity agreements with them. Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever. 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. Our indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions. 90 We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced directors and officers. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. Item 11. Executive Compensation. Officer and Director Compensation None of our directors or officers has received any cash compensation for services rendered to us. Sponsor HoldCo, our sponsor, directors and officers, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to Sponsor HoldCo, our sponsor, directors, officers or our or any of their respective affiliates. Any such payments prior to an initial business combination will be made from funds held outside the trust account (other than any permitted withdrawals). 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. After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other compensation from the combined company. All compensation will be fully disclosed to shareholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our shareholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the initial proposed business combination because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our officers after the completion of our initial business combination will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors. We are not party to any agreements with our directors and officers that provide for benefits upon termination of employment. We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our directors and officers may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements may influence our management’s motivation in identifying or selecting a target business, and we do not believe that the ability of our management to remain with us after the consummation of our initial business combination should be a determining factor in our decision to proceed with any potential business combination. Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information We do not grant equity awards to our executive officers or other employees of the Company and therefore do not have a policy regarding the timing of grants of option awards in relation to the disclosure of material non-public information by the Company. 91 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The following table sets forth information regarding the beneficial ownership of our ordinary shares available to us at March 12, 2026, by: ● each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares; ● each of our executive officers and directors; and ● all our executive officers and directors as a group. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially owned by them. 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 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) Number of Shares Beneficially Owned Approximate Percentage of Issued and Outstanding Ordinary Shares Entities affiliated with AQR Capital Management, LLC (3) 1,277,639 5.32 % Picton Mahoney Asset Management (4) 1,250,000 5.21 % Barclays PLC (5) 1,328,519 5.54 % FACT II Acquisition LLC (Sponsor HoldCo) (6)(7) 6,035,833 (2) 25.15 % (8) Robert Rackind (9) 130,000 (2) * Adam Gishen (6) - - Min Lee (6) - - Nell Cady-Kruse 30,000 * James Rallo 30,000 * Hella Alashkar 30,000 (2) * All directors and officers as a group (6 individuals) 220,000 (2) * * Less than one percent. (1) Unless otherwise noted, the business address of each of the following entities or individuals is c/o FACT II Acquisition Corp., 14 Wall Street, 20th Floor, New York, NY 10005. (2) Interests shown consist solely of founder shares, classified as Class B ordinary shares. Such 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. (3) Based 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 (“AQR Holdings”) and AQR Arbitrage, LLC (“AQR Arbitrage”), each of which share voting and dispositive power with respect to the reported securities. The address of the business office of each of AQR, AQR Holdings and AQR Arbitrage is One Greenwich Plaza, Suite 130, Greenwich, CT 06830. (4) Based 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. (5) Based 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. 92 (6) Sponsor HoldCo is the record holder of 5,613,333 founder shares. Our sponsor is the managing member of Sponsor HoldCo. Investment and voting decisions are made by 51% or more of the voting power held by the managing member of Sponsor HoldCo. By virtue of having a greater than 51% interest in the voting power in Sponsor HoldCo, our sponsor may be deemed to beneficially own the founder shares held by Sponsor HoldCo. The members of our sponsor are Adam Gishen, Min Lee, Richard Nespola, Jr. and Joseph Wagman, who by virtue of their control of our sponsor may be deemed to share beneficial ownership of the founder shares held by Sponsor HoldCo. Each of Messrs. Gishen, Lee, Nespola and Wagman disclaims beneficial ownership of the founder shares held by Sponsor HoldCo. (7) 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, 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. (9) Interest shown is related to Robert Rackind’s service as our Executive Chairman. Separately, Mr. Rackind holds Class B membership units in Sponsor HoldCo as a non-managing HoldCo investor. Our initial shareholders will have the right to elect all of our directors prior to our initial business combination as a result of holding all of the founder shares. Holders of our public shares will not have the right to vote to appoint any directors to our board of directors prior to our initial business combination. In addition, because of their ownership block, our initial shareholders may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments to our amended and restated memorandum and articles of association and approval of significant corporate transactions. Our 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. 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 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. Securities Authorized for Issuance under Equity Compensation Plans None. 93 Item 13. Certain Relationships and Related Transactions, and Director Independence. On July 12, 2024, Sponsor HoldCo paid $25,000, or approximately $0.0037 per share, to cover certain of our offering and formation costs in exchange for an aggregate of 6,708,333 founder shares. Prior to this initial investment in us by the Sponsor HoldCo, we had no assets, tangible or intangible. On August 6, 2024, the Sponsor HoldCo transferred 30,000 founder shares to each of our independent directors and 130,000 founder shares to our Executive Chairman (an aggregate of 220,000 founder shares), in each case at their original purchase price. Our sponsor holds founder shares through the Sponsor HoldCo, which purchased private placement units and private placement securities simultaneously with the closing of our initial public offering. Sponsor HoldCo has 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 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 of an initial business combination, in consideration for advisory services to be provided by such senior advisor of the Company in connection with the initial business combination; the aforementioned 5,593,333 founder shares excludes such reserved 20,000 founder shares. Effective January 10, 2025, upon expiry of the underwriters’ over-allotment option, 875,000 founder shares were forfeited by Sponsor HoldCo. In addition, in order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, either of Sponsor HoldCo, our sponsor, any of their respective affiliates or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. See “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation - Liquidity and Capital Resources.” Our 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 our sponsor. 94 On October 14, 2024, a member of our sponsor (the “Borrower”), issued a promissory note in the principal amount of up to £200,000 (the “Note”) to Robert Rackind, our Executive Chairman, who is the Borrower’s father-in-law. 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 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. Mr. 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. As 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. Members of our management team and our board of directors directly or indirectly own founder shares and/or private placement units following our initial public offering, as set forth in Part II, Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, and, accordingly, 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. Sponsor HoldCo, our sponsor, directors and officers, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to Sponsor HoldCo, our sponsor, directors, officers or our or any of their respective affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf. 95 In addition, in order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, either of Sponsor HoldCo, our sponsor, any of their respective affiliates or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up 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. After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other compensation from the combined company. All compensation will be fully disclosed to shareholders, to the extent then known, in the tender offer materials or proxy solicitation materials, as applicable, furnished to our shareholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a general meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive officer and director compensation. 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 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). In 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. In 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”). 96 Pursuant 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. On 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. Related Party Transactions Policy We have adopted our Code of Ethics, requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. Under our Code of Ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company. In addition, our audit committee, pursuant to its written charter, is responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in order to approve a related party transaction. A majority of the members of the entire audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a related party transaction. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors, or our or any of their affiliates. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer. To further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of Sponsor HoldCo, our sponsor, directors or officers unless we, or a committee of independent and disinterested directors, have obtained an opinion from an independent investment banking firm which is a member of FINRA or from a valuation or appraisal firm that our initial business combination is fair to our shareholders from a financial point of view. Furthermore, there will be no finder’s fees, reimbursements or cash payments made by us to Sponsor HoldCo, our sponsor, directors or officers, or our or any of their respective affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of our initial public offering and the sale of the private placement units and restricted Class A shares held in the trust account (other than any permitted withdrawals) prior to the completion of our initial business combination: ● payment of customary fees for financial advisory services; ● payment of consulting, success or finder fees to our officers, independent directors, advisors, or their respective affiliates in connection with the consummation of our initial business combination; ● any other payment to Sponsor, Sponsor HoldCo, or an affiliate of Sponsor or Sponsor HoldCo as an advisor or otherwise in connection with our initial business combination and certain other transactions; ● reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and 97 ● repayment of loans which may be made by the Sponsor HoldCo, our sponsor, any of their respective affiliates or certain of our directors and officers to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up 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. These payments may be funded using the net proceeds of our initial public offering and the sale of the private placement units and restricted Class A shares not held in the trust account (other than any permitted withdrawals) or, upon completion of the initial business combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith. Director Independence Nasdaq listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. We have three “independent directors” as defined in Nasdaq listing standards and applicable SEC rules. Our board has determined that each of Nell Cady-Kruse, James Rallo, and Hella Alashkar is an independent director under applicable SEC rules and the Nasdaq listing standards. Our independent directors will have regularly scheduled meetings at which only independent directors are present. Item 14. Principal Accounting Fees and Services. The firm of WithumSmith+Brown, PC, or Withum, acts as our independent registered public accounting firm. The following is a summary of fees paid to Withum for services rendered. Audit Fees . During the period from June 19, 2024 (inception) through December 31, 2024, fees for our independent registered public accounting firm were approximately $144,000 for the services Withum performed in connection with our initial public offering and the audit of our 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 Fees. 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. Tax Fees . 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. All Other Fees . 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 forth above. Pre-Approval Policy Our audit committee was formed upon the consummation of our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit). 98 Part IV Item 15. Exhibits, Financial Statement Schedules. (1) Financial Statements. Reference is made to the Index to Financial Statements of the Company under Item 8 of Part II above. (2) Financial Statement Schedules. All 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. The 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 Description 2.1†# 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). 3.1 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). 4.1 Specimen Unit Certificate (incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed on November 21, 2024). 4.2 Specimen Class A Ordinary Share Certificate (incorporated herein by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 filed on November 21, 2024). 4.3 Specimen Warrant Certificate (incorporated herein by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1 filed on November 21, 2024). 4.4 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). 4.5 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). 10.1 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). 10.2 Private Placement Units Subscription Agreement, dated November 25, 2024, between the Company and FACT II Acquisition Parent LLC (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 27, 2024). 10.3 Private Placement Units Subscription Agreement, dated November 25, 2024, between the Company and Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 27, 2024). 10.4 Private Placement Units Subscription Agreement, dated November 25, 2024, between the Company and Seaport Global Securities LLC (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on November 27, 2024). 10.5 Investment Management Trust Agreement, dated November 25, 2024, between the Company and Odyssey Transfer and Trust Company (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on November 27, 2024). 99 10.6 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). 10.7 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). 10.8 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). 10.9† 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). 10.10 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). 10.11 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). 10.12 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). 10.13 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). 19.1 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). 21.1 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). 24.1* Power of Attorney (included on the signature page to this Annual Report on Form 10-K). 31.1* 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. 31.2* Certification of Principal Financial 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. 32.1* Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 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). 101.NS* 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. 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEL* Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.DRF* Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interaction Data File (formatted as inline XBRL with application taxonomy extension information contained in Exhibit 101). * Filed herewith. † Certain of the exhibits, schedules and similar attachments to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. # Certain personally identifiable information has been omitted from this exhibit pursuant to Item 601(a)(6) of Regulation S-K. Item 16. Form 10-K Summary. None. 100 SIGNATURES Pursuant 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. FACT II ACQUISITION CORP. By: /s/ Adam Gishen Name: Adam Gishen Title: Chief Executive Officer POWER OF ATTORNEY KNOW 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. Pursuant 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. By: /s/ Adam Gishen Name: Adam Gishen Title: Chief Executive Officer and Director (Principal Executive Officer) Date: March 13, 2026 By: /s/ Min Lee Name: Min Lee Title: Chief Financial Officer (Principal Financial and Accounting Officer) Date: March 13, 2026 By: /s/ Robert Rackind Name: Robert Rackind Title: Executive Chairman and Director Date: March 13, 2026 By: /s/ Nell Cady-Kruse Name: Nell Cady-Kruse Title: Director Date: March 13, 2026 By: /s/ James Rallo Name: James Rallo Title: Director Date: March 13, 2026 By: /s/ Hella Alashkar Name: Hella Alashkar Title: Director Date: March 13, 2026 101 FACT II ACQUISITION CORP. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F-2 Financial Statements: Consolidated Balance Sheets as of December 31, 2025 and 2024 F-3 Consolidated Statements of Operations for the Year Ended December 31, 2025 and for the period from June 19, 2024 (inception) through December 31, 2024 F-4 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 F-5 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 F-6 Notes to Consolidated Financial Statements F-7 to F-18 F- 1 Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders FACT II Acquisition Corp. Opinion on the Financial Statements 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 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 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 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 March 13, 2026 PCAOB ID Number 100 F- 2 FACT II ACQUISITION CORP. CONSOLIDATED BALANCE SHEETS December 31, December 31, 2025 2024 ASSETS Current assets Cash $ 544,791 $ 1,447,921 Prepaid expenses 92,600 95,833 Total current assets 637,391 1,543,754 Prepaid insurance ― 77,208 Cash held in Trust Account 183,785,456 176,597,270 TOTAL ASSETS $ 184,422,847 $ 178,218,232 LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT Current liabilities Accrued expenses $ 23,507 $ 97,837 Over-allotment option liability — 26,558 Total current liabilities 23,507 124,395 Deferred legal fees 2,137,965 850,000 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 approximately $ 10.50 and $ 10.09 per share at December 31, 2025 and 2024, respectively 183,785,456 176,597,270 SHAREHOLDERS’ DEFICIT Preference shares, $ 0.0001 par value; 1,000,000 shares authorized; 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 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; 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 ) TOTAL SHAREHOLDERS’ DEFICIT ( 8,524,081 ) ( 6,353,433 ) 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. F- 3 FACT II ACQUISITION CORP. CONSOLIDATED STATEMENTS OF OPERATIONS For the Year Ended December 31, 2025 For the Period from June 19, 2024 (inception) through December 31, 2024 General and administrative expenses $ 2,225,030 $ 1,079,899 Loss from operations ( 2,225,030 ) ( 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 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 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. F- 4 FACT II ACQUISITION CORP. 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 Class A Ordinary Shares Class B Ordinary Shares Additional Paid-in Accumulated Total Shareholders’ Shares Amount Shares Amount Capital Deficit Deficit Balance — June 19, 2024 (inception) — $ — — $ — $ — $ — $ — Class B ordinary shares issued to Sponsor (1) — — 6,708,333 671 24,329 — 25,000 Sale of Private Placement Warrants 663,125 66 — — 6,471,934 — 6,472,000 Fair value of Public Warrants at issuance — — — — 525,000 — 525,000 Sale of Restricted Shares 325,000 33 159,217 159,250 Allocated value of transaction costs to Class A ordinary shares — — — — ( 71,958 ) — ( 71,958 ) 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 ) 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. F- 5 FACT II ACQUISITION CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2025 For the period from June 19, 2024 (inception) through December 31, 2024 Cash Flows from 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 ) Interest earned on cash held in Trust Account ( 7,188,186 ) ( 722,270 ) Changes in operating assets and liabilities: Prepaid expenses 3,233 ( 95,833 ) Prepaid insurance 77,208 ( 77,208 ) Accrued expenses ( 74,330 ) 97,837 Deferred legal fees 1,287,965 850,000 Net cash used in operating activities ( 903,130 ) ( 305,103 ) Cash Flows from Investing Activities: Investment of cash into Trust Account — ( 175,875,000 ) Net cash used in investing activities — ( 175,875,000 ) Cash Flows from Financing Activities: — Proceeds from issuance of Class B ordinary shares to Sponsor — 25,000 Proceeds from sale of Units, net of underwriting discounts paid — 171,500,000 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 ) Payment of offering costs — ( 528,226 ) Net cash provided by financing activities — 177,628,024 Net Change in Cash ( 903,130 ) 1,447,921 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 consolidated financial statement. F- 6 FACT II ACQUISITION CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 NOTE 1. 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, 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. F- 7 FACT II ACQUISITION CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 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. F- 8 FACT II ACQUISITION CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 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 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. companies. 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. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation 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 Securities and Exchange Commission (the “SEC”). F- 9 FACT II ACQUISITION CORP. 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 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 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. F- 10 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 $ 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 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. 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 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 sheets, primarily due to their short-term nature. Income Taxes 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 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. F- 11 FACT II ACQUISITION CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 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: Numerator: Allocation of net income (loss) basic $ 3,814,116 $ 1,203,422 $ ( 27,691 ) $ ( 44,200 ) Denominator: 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 Less: Proceeds allocated to Public Warrants ( 525,000 ) Proceeds allocated to over-allotment option ( 312,296 ) Class A ordinary shares issuance costs ( 10,956,268 ) Plus: Remeasurement of carrying value to redemption value 13,390,834 Class A ordinary shares subject to possible redemption, December 31, 2024 $ 176,597,270 Plus: Accretion for common stock to redemption amount 7,188,186 Class A ordinary shares subject to possible redemption, December 31, 2025 $ 183,785,456 F- 12 FACT II ACQUISITION CORP. 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. NOTE 3. 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). NOTE 4. PRIVATE PLACEMENT 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). 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. NOTE 5. 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 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. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. 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. F- 13 FACT II ACQUISITION CORP. 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). NOTE 6. 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 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 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. F- 14 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 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; and ● 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. F- 15 FACT II ACQUISITION CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 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. NOTE 7. 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, 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: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability. F- 16 FACT II ACQUISITION CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 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, 2024 Liabilities: 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, 2024 Risk-free interest rate 4.40 % Expected term (years) 0.04 Expected volatility 4.91 % Exercise price $ 10.00 Inputs November 27, 2024 Risk-free interest rate 4.76 % Expected term (years) 0.12 Expected volatility 6.23 % 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 Warrants: November 27, 2024 Estimated share price $ 9.92 Exercise price $ 11.50 Term (years) 6.50 Risk-free rate 4.07 % Selected volatility 2.7 % 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. F- 17 FACT II ACQUISITION CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 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, 2025 2024 Trust Account $ 183,785,456 $ 176,597,270 Cash $ 544,791 $ 1,447,921 For the Year Ended December 31, 2025 For the period from June 19, 2024 (inception) through December 31, 2024 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 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. NOTE 10. SUBSEQUENT EVENTS 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. F- 18