Fortress Value Acquisition Corp. V 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. References to the “Company,” “our,” “us” or “we” refer to Fortress Value Acquisition Corp. V. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q includes, and oral statements made from time to time by representatives of the Company may include, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (the “SEC”) filings. Forward-looking statements in this Quarterly Report may include, for example, statements about: ● our ability to select an appropriate target business or businesses; ● our ability to complete our initial business combination; ● our expectations around the performance of the prospective target business or businesses; ● our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; ● our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; ● our potential ability to obtain additional financing to complete our initial business combination; ● our pool of prospective target businesses; ● our ability to consummate an initial business combination due to the uncertainty resulting from geopolitical events like the conflict in Ukraine, Iran, Israel, and Gaza and economic impacts such as inflation and rising interest rates; ● the ability of our officers and directors to generate a number of potential business combination opportunities; ● our public securities’ potential liquidity and trading; ● the use of proceeds not held in the Trust Account (as defined below) or available to us from interest income on the Trust Account balance; ● the Trust Account not being subject to claims of third parties; 19 ● the number of redemptions by our public shareholders in connection with a business combination; ● our financial performance; and ● the other risks and uncertainties discussed in “Risk Factors.” The forward-looking statements contained in this Quarterly Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Item 1A. Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Overview We are a blank check company incorporated as a Cayman Islands exempted company on November 24, 2025, formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses that we have not yet identified (“Business Combination”). Although we may pursue an acquisition in any geography or industry for purposes of consummating a Business Combination, we intend to capitalize on the ability of our management team and the broader Fortress platform to identify, acquire and operate a business that may provide opportunities for attractive risk-adjusted returns. Our Sponsor is Fortress Value Acquisition Sponsor V LLC (the “Sponsor”). We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies. Our registration statement for the initial public offering (the “Initial Public Offering”) was declared effective on February 25, 2026. On February 27, 2026, we consummated our Initial Public Offering of 25,000,000 public Class A ordinary shares (the “Public Shares”) at $10.00 per share, generating gross proceeds of $250.0 million and incurring offering costs of $14.8 million, inclusive of $13.8 million in deferred underwriting commissions. In March 2026, the underwriter exercised its over-allotment option and purchased 3,750,000 Class A ordinary shares at the initial public offering price to cover over-allotments made in the Initial Public Offering generating additional gross proceeds of $37.5 million and incurring additional offering costs of $2.2 million, inclusive of approximately $2.1 million in deferred underwriting commissions. Substantially concurrently with the closing of the Initial Public Offering, we consummated a private placement (the “Private Placement”) of 200,000 private placement shares at $10.00 per share (the “Private Placement Shares”) with the Company’s sponsor, Fortress Value Acquisition Sponsor V LLC (the “Sponsor”), generating gross proceeds of $2.0 million. Upon the closing of the Initial Public Offering and the exercise of the over-allotment option, a portion of the $287.5 million ($10.00 per share) aggregate cash proceeds of the sale of the Public Shares in the Initial Public Offering and the over-allotment exercise and a portion of the proceeds from the sale of the Private Placement Shares in the Private Placement were placed in a U.S. based trust account (the “Trust Account”) at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee. The cash proceeds held in the Trust Account are invested 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 selected by us meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account as described below. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account (or less than that in certain circumstances). In order to protect the amounts held in the Trust Account, the Sponsor has agreed to 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 a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriter of the Initial Public Offering 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, the Sponsor will not be responsible to the extent of any liability for such third-party claims. 20 The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all third parties, service providers (other than the Company’s independent registered public accounting firm), 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. Results of Operations Since the Initial Public Offering, our activity has been limited to the search for a prospective initial Business Combination, and we will not generate any operating revenues until the closing and completion of our initial Business Combination. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with completing a Business Combination. For the three months ended June 30, 2026, we had net income of $1.7 million which consisted of $2.6 million in interest and dividend income partially offset by $0.8 million in formation, general and administrative expenses. For the six months ended June 30, 2026, we had net income of $2.5 million which consisted of $3.4 million in interest and dividend income and a change in the fair value of the over-allotment option liability of less than $0.1 million partially offset by $0.9 million in formation, general and administrative expenses. Liquidity and Capital Resources As indicated in the accompanying unaudited condensed financial statements, as of June 30, 2026, we had $0.9 million in our operating bank account and working capital deficit of $0.1 million. Through our Initial Public Offering, our liquidity needs have been satisfied through receipt of a $25,000 capital contribution from our Sponsor in exchange for the issuance of the Founder Shares to our Sponsor, up to $0.3 million in loans from our Sponsor and the proceeds not held in the Trust Account which resulted from the consummation of the Initial Public Offering and the sale of Private Placement Shares to the Sponsor. Following the closing of the Initial Public Offering, the exercise of the over-allotment option, and the sale of Private Placement Shares, which resulted in $287.5 million ($10.00 per share) being placed into a Trust Account and payment of expenses, we had $0.9 million in cash held outside of the Trust Account as of June 30, 2026, which we intend to use for working capital purposes. In addition, in order to finance transaction costs in connection with a business combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required (see Related Party Transactions). Based on the foregoing, we believe we will have sufficient cash to meet our needs through the earlier of consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing accounts payable and accrued expenses. 21 If our estimates of the costs of undertaking in-depth due diligence and negotiating our initial Business Combination are less than the actual amount necessary to do so, or the amount of interest available to us from the Trust Account is less than we expect as a result of the current interest rate environment, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to consummate our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial Business Combination. Following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations. Related Party Transactions Founder shares In December 2025, the Company issued an aggregate of 7,187,500 Class B ordinary shares to the Sponsor (the “Founder Shares”) in exchange for an aggregate capital contribution of $25,000. The Sponsor had agreed to forfeit an aggregate of up to 937,500 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriter. In March 2026, subsequent to the Initial Public Offering, the underwriter exercised the over-allotment option in full. Accordingly, none of the aforementioned Class B ordinary shares were forfeited. The Founder Shares will automatically convert into Class A ordinary shares upon the consummation of a Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment. The Sponsor waives its rights to liquidating distributions with respect to any Founder Shares if the Company fails to complete an initial Business Combination. Prior to the Initial Public Offering, the Sponsor sold 30,000 Founder Shares to an independent director of the Company, for the same per-share price initially paid by the Sponsor. In May 2026, the Sponsor sold an additional 30,000 Founder Shares to another independent director of the Company, for the same per-share price initially paid by the Sponsor. Each director’s total consideration paid for these Founder Shares was approximately $100. Subsequent to these transfers, the Sponsor holds 7,127,500 Class B ordinary shares. Each Founder Share will automatically convert to one Class A ordinary share concurrently with or immediately following the consummation of the Business Combination. The Initial Shareholders will retain all voting and dispositive power over all Founder Shares until the consummation of the Business Combination. Private placement Substantially concurrently with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 200,000 Private Placement Shares at $10.00 per share, or $2.0 million in the aggregate. These Private Placement Shares are identical to the Class A ordinary shares except that such Private Placement Shares will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if the Company fails to complete its initial Business Combination. A portion of the proceeds from the Private Placement Shares have been added to the proceeds from the Initial Public Offering and are held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Sponsor waives its rights to liquidating distributions from the Trust Account with respect to the Private Placement Shares if the Company fails to complete an initial Business Combination. The Sponsor and the Company’s officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Shares until 30 days after the completion of the Business Combination. Promissory note—related party Our Sponsor loaned us an aggregate of $160,375 to cover expenses related to the Initial Public Offering pursuant to a promissory note. The promissory note was non-interest bearing. The Company repaid the promissory note on February 27, 2026. 22 Office space and related support services During February 2026, the Company entered into an agreement with an affiliate of the Sponsor to pay a monthly fee of $20,000 for office space, utilities and administrative services. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. As of June 30, 2026, the Company had no accrued expenses payable for services provided by an affiliate of the Sponsor in connection with the aforementioned agreement. Related party loans In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may 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 lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into shares at a price of $10.00 per share. The shares would be identical to the Private Placement Shares. As of June 30, 2026 and December 31, 2025, respectively, no Working Capital Loans were outstanding. Contractual Obligations We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor $20,000 per month for office space, utilities and administrative services. The underwriter is entitled to a deferred underwriting discount of $15,812,500 (5.5% of the gross proceeds of the Initial Public Offering held in the Trust Account) upon the completion of the Company’s initial Business Combination, subject to the terms of the underwriting agreement. The deferred discount will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes its Business Combination. The underwriter is not entitled to any interest accrued on the deferred discount. Critical Accounting Estimates The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and income and expenses during the periods reported. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future significant events. Actual results could materially differ from those estimates. Sale of Founder Shares The sale of the Founder Shares to the Company’s independent director is in the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the sale date. The fair value of the 30,000 shares sold to the Company’s independent director prior to the IPO was less than $0.1 million or $1.50 per share as of the sale date. The fair value of the additional 30,000 Founder Shares sold to the Company’s other independent director during May 2026 was $0.1 million or $3.81 per share as of the sale date. 23 Recent accounting pronouncements Our management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our condensed financial statements. Off-Balance Sheet Arrangements As of June 30, 2026, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K. Jumpstart our Business Startups (“JOBS”) Act Section 102(b)(1) of the JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our condensed financial statements may not be comparable to companies that comply with public company effective dates. Item 3. Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.