fact-20251231

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-42421

FACT II Acquisition Corp.

(Exact name of Registrant as specified in its Charter)

Cayman Islands		N/A
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

14 Wall Street, 20th Floor
New York, New York 10005
(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (212) 618-1798

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one Class A ordinary share, par value $0.0001 per share, and one-half of one redeemable warrant	FACTU	Nasdaq Global Market
Class A ordinary shares, par value $0.0001 per share, included as part of the units	FACT	Nasdaq Global Market
Warrants included as part of the units, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50	FACTW	Nasdaq Global Market

Securities registered pursuant to Section 12 (g) of the Act:
None

Indicate by check mark if the Registrant is a well - known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Act. YES ☐ NO ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by the check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404 (b) of the Sarbanes - Oxley Act (15 U.S.C. 7262 (b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b - 2 of the Exchange Act). YES ☒ NO ☐

At June 30, 2025, the last business day of the Registrant’s most recently completed second fiscal quarter, the aggregate market value of the Registrant’s voting and non-voting common equity held by non-affiliates, computed by reference to the closing price of the Registrant’s Class A ordinary shares on such date, as reported on The Nasdaq Global Market, was $182,559,603.

As of March 12, 2026 there were 18,488,125 shares of the Registrant's Class A ordinary shares, $0.0001 par value, and 5,833,333 of the Registrant’s Class B ordinary shares, $0.0001 par value, issued and outstanding.

Documents Incorporated by Reference: None.

TABLE OF CONTENTS

		Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		ii
Part I		1
Item 1. Business.		4
Item 1A. Risk Factors.		24
Item 1B. Unresolved Staff Comments.		73
Item 1C. Cybersecurity.		73
Item 2. Properties.		73
Item 3. Legal Proceedings.		73
Item 4. Mine Safety Disclosures.		73
Part II		74
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.		74
Item 6. [Reserved].		75
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		75
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.		78
Item 8. Financial Statements and Supplementary Data.		78
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.		78
Item 9A. Controls and Procedures.		78
Item 9B. Other Information.		78
Item 9C. Disclosures Regarding Foreign Jurisdiction that Prevent Inspections.		78
Part III		79
Item 10. Directors, Executive Officers and Corporate Governance.		79
Item 11. Executive Compensation.		91
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.		92
Item 13. Certain Relationships and Related Transactions, and Director Independence.		94
Item 14. Principal Accounting Fees and Services.		98
Part IV		99
Item 15. Exhibits, Financial Statement Schedules.		99
Item 16. Form 10-K Summary.		100
SIGNATURES		101

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report 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 (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this Annual 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, the following risks, uncertainties and other factors:

●

risks associated with our proposed business combination with Precision Aerospace & Defense Group, Inc.;

●

our ability to select an appropriate target business or businesses;

●

our ability to complete our initial business combination, which is impacted by various factors;

●

our expectations around the performance of a prospective target business or businesses or of markets or industries;

●

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

●

our directors and officers allocating their time to other businesses and potentially having conflicts of interest with or otherwise conflicting contractual obligations in connection with our business or in approving or consummating our initial business combination;

●

our potential ability to obtain additional financing to complete our initial business combination;

●

our pool of prospective target businesses;

●

the ability of our directors and officers to generate a number of potential business combination opportunities;

●

the potential liquidity and trading of our public securities;

●

the lack of a market for our securities;

●

the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

●

global geopolitical conditions resulting from political and economic instability, including wars, terrorism and political unrest, including the outbreak of hostilities in Ukraine and the Middle East and potential instability in Venezuela, outbreak of disease, boycotts, curtailment of trade and other business restrictions;

●

the trust account not being subject to claims of third parties;

●

our financial performance following our initial public offering; and

●

the other risks and uncertainties discussed in “Risk Factors” and elsewhere in this Annual Report.

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.

Part I

References in this Annual Report to:

●

“amended and restated memorandum and articles of association” are to our amended and restated memorandum and articles of association in effect upon the completion of our initial public offering;

●

“Business Combination” are to the Merger, the Domestication and the other transactions contemplated by the Business Combination Agreement;

●

“Business Combination Agreement” are to the Business Combination Agreement, dated as of November 26, 2025 (as it may be amended, restated, supplemented, or otherwise modified from time to time), by and among the Company, Sponsor HoldCo, Merger Sub, and PAD;

●

“CCM” are to Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC, a representative of the underwriters in our initial public offering;

●

“Closing” are to the closing of the Business Combination;

●

“Closing Date” are to the date the Closing occurs;

●

“Domestication” are to the deregistration of the Company from the Cayman Islands and the registration by way of continuation of the Company as a corporation incorporated in the State of Delaware, in accordance with the amended and restated memorandum and articles of association, Section 388 of the DGCL and Part XII of the Cayman Companies Act;

●

“non-managing HoldCo investors” means certain investors (none of which are affiliated with any member of our management, our sponsor or any other investor, except for Robert Rackind, our Executive Chairman) that (A) purchased $88 million of the units sold 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, 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 6,468,333 founder shares (which were subsequently reduced by 875,000 founder shares that were forfeited effective as of January 10, 2025 upon the expiry of the underwriters’ over-allotment option) and 325,000 restricted Class A shares, as applicable, held by Sponsor HoldCo;

●

“Companies Act” are to the Companies Act (As Revised) of the Cayman Islands as the same may be amended from time to time;

●

“directors” are to our directors;

●

“founder shares” are to our Class B ordinary shares initially purchased by Sponsor Holdco, a portion of which were transferred to our three independent directors and our Executive Chairman prior to the effectiveness of the Registration Statement, and our Class A ordinary shares that will be issued upon conversion thereof as provided in the Registration Statement;

●

“initial shareholders” are to Sponsor Holdco and the three independent directors and our Executive Chairman who will hold our founder shares prior to the completion of our initial public offering;

●

“initial public offering” or “IPO” are to the initial public offering that we consummated on November 27, 2024;

●

“letter agreement” refer to the letter agreement, included hereto as Exhibit 10.7;

●

“Lock-Up Agreements” are to collectively the Sponsor Lock-Up Agreement and the PAD Shareholder Lock-Up Agreement;

●

“management” or our “management team” are to our directors and officers;

●

“Merger” are to the merger of Merger Sub with and into PAD with PAD surviving the merger as a wholly-owned subsidiary of the Company;

●

“Merger Sub” are to Patriot Merger Subsidiary, Inc., a Florida corporation and a direct, wholly-owned subsidiary of FACT;

●

“Nasdaq” are to The Nasdaq Global Market, unless the context requires otherwise;

●

“New PAD” are to the post-Merger entity, Precision Aerospace & Defense Group, Inc., a Florida corporation;

●

“New PAD Common Stock” are to our Class A ordinary shares, par value $0.0001 per share, after the consummation of the Merger.

●

“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;

●

“PAD” are to Precision Aerospace & Defense Group, Inc., a Florida corporation;

●

“permitted withdrawals” means amounts withdrawn from the trust account to pay our franchise and income tax obligations, provided that permitted withdrawals can only be made from interest earned and not from the principal held in the trust account;

●

“private placement securities” are to the private placement units and the restricted class A shares, collectively;

●

“private placement shares” are to the Class A ordinary shares sold as part of the private placement units;

●

“private placement units” are to the units issued to Sponsor HoldCo, CCM and Seaport in private placements simultaneously with the closing of our initial public offering, which private placement units are identical to the units sold in our initial public offering, subject to certain limited exceptions described in the prospectus filed November 26, 2024;

●

“private placement warrants” are to the warrants sold as part of the private placement units;

●

“public shareholders” are to the holders of our public shares, including Sponsor HoldCo, our sponsor, any non-managing HoldCo investors, directors and officers to the extent such persons purchase public shares, provided their status as a “public shareholder” shall only exist with respect to such public shares;

●

“public shares” are to our Class A ordinary shares sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market);

●

“public warrants” are to our warrants sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market);

●

“Registration Statement” are to the Company’s registration statement on Form S-1 (File No. 333-281593) relating to the Company’s initial public offering, which was declared effective by the Securities and Exchange Commission;

●

“restricted Class A shares” are to 325,000 Class A ordinary shares, par value $0.0001 per share, which would vest only upon the consummation of our initial business combination;

●

“Seaport” are to Seaport Global Securities LLC, a representative of the underwriters in our initial public offering;

●

“SEC” are to the United States Securities and Exchange Commission;

●

“Senior Advisor” are to Rachelle du Rocher, a senior advisor of our company;

●

“sponsor” and “FACT Sponsor” are to FACT II Acquisition Parent LLC, a Cayman Islands limited liability company;

●

“Sponsor HoldCo” are to FACT II Acquisition LLC, a Cayman Islands limited liability company, formed by our sponsor on June 19, 2024, which directly holds (i) all of the founder shares (other than the founder shares held by our three independent directors and our Executive Chairman) and (ii) upon consummation of the private placement that closed simultaneously with the closing of our initial public offering, 422,500 private placement units and 325,000 restricted Class A shares;

●

“warrants” are, collectively, to the public warrants and the private placement warrants;

●

“warrant agreement” are, together, to our warrant agreement governing the warrants;

●

“we,” “us,” “our,” “Company,” “FACT” or our “company” are to FACT II Acquisition Corp., a Cayman Islands exempted company.

SEC Form 10-K filed by FACT II Acquisition Corp.