PART I – FINANCIAL INFORMATION This part presents the unaudited financial statements, management's discussion, market risk disclosures, and controls and procedures for the company Item 1. Financial Statements This section presents the unaudited financial statements for FG Merger II Corp. as of June 30, 2025, including balance sheet, operations, equity changes, cash flows, and detailed explanatory notes Balance Sheet This table provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific reporting dates | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :-------------------------- | :-------------------------- | :-------------------------- | | Cash | $517,813 | $46,285 | | Cash held in trust account | $81,628,583 | — | | Total Assets | $82,295,308 | $169,035 | | Total Liabilities | $298,486 | $171,667 | | Total Stockholders' Equity | $368,239 | $(2,632) | Statement of Operations This table details the company's revenues, expenses, and net income or loss over specific reporting periods | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $897,385 | $(2,182) | | Investment income on trust account | $1,402,254 | — | | Basic income per share, redeemable shares | $0.207 | $(0.001) | | Diluted income per share, redeemable shares | $0.186 | — | | Basic loss per non-redeemable share | $(0.211) | $(0.001) | | Basic and diluted loss per non-redeemable share | $(0.199) | $(0.0010) | | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | | Net income (loss) | $582,035 | $(885) | | Investment income on trust account | $842,499 | — | | Basic income per share, redeemable shares | $0.071 | $(0.0004) | | Diluted income per share, redeemable shares | $0.065 | — | | Basic loss per non-redeemable share | $0.005 | $(0.0004) | | Basic and diluted loss per non-redeemable share | $0.005 | $(0.0004) | Statement of Changes in Stockholders' Equity This table outlines the changes in the company's equity components, including common stock, additional paid-in capital, and accumulated deficit | Event | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | | :------------------------------------------------ | :-------------------- | :------------------ | :------------------------- | :-------------------- | :------------------------- | | Balance at December 31, 2024 (audited) | 2,300,000 | $230 | $26,436 | $(29,298) | $(2,632) | | Sale of 8,000,000 units in IPO | 8,000,000 | $800 | $79,999,200 | — | $80,000,000 | | Sale of 248,300 units in private placement | 248,300 | $24 | $2,482,976 | — | $2,483,000 | | Sale of 1,000,000 $15 strike warrants in private placement | — | — | $100,000 | — | $100,000 | | Net Income (March 31, 2025) | — | — | — | $315,350 | $315,350 | | Net Income (June 30, 2025) | — | — | — | $582,035 | $582,035 | | Balance at June 30, 2025 | 10,295,800 | $259 | — | $367,980 | $368,239 | Statement of Cash Flows This table summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $1,006,963 | $(1,503) | | Net cash used in investing activities | $(81,628,583) | — | | Net cash provided by financing activities | $81,093,148 | — | | Net increase in cash | $471,528 | $(1,503) | | Cash at end of period | $517,813 | $54,745 | NOTES TO THE FINANCIAL STATEMENTS This section provides detailed explanations and additional information supporting the financial statements NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS This note describes the company's formation, purpose, IPO, private placement, and trust account details - FG Merger II Corp. is a blank check company incorporated on September 20, 2023, for the purpose of a business combination, primarily focusing on the financial services industry1920 - The company consummated its IPO on January 30, 2025, selling 8,000,000 units at $10.00 per unit, generating gross proceeds of $80,000,00022 - Simultaneously, a private placement generated $2,483,000 from private units and $100,000 from $15 private warrants23 - An amount of $80,800,000 ($10.10 per Unit) from the IPO and private placement proceeds was placed in a trust account, invested in a money market fund27 - The company has 24 months from the IPO closing to complete a Business Combination, otherwise, it will redeem 100% of outstanding Public Shares34 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines the key accounting principles and methods used in preparing the financial statements - The financial statements are presented in U.S. Dollars in conformity with GAAP and SEC rules36 - The company is an 'emerging growth company' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards3738 - As of June 30, 2025, assets in the Trust Account were primarily invested in a money market fund focused on U.S. Treasury obligations. The company withdrew $573,671 of interest income for working capital during the six months ended June 30, 202541 - Deferred offering costs of $1,481,032 (including $750,000 underwriting fee and $250,000 advisor fee) were charged to shareholders' equity upon IPO completion42 - Common stock subject to possible redemption is classified as temporary equity at redemption value, with changes recognized immediately4344 - The company estimated $294,474 in income tax expense on income earned in the Trust Account as of June 30, 202547 - The company operates as one operating segment and adopted ASU 2023-07 (Segment Reporting) on January 31, 2025, resulting in disclosure changes only5556 NOTE 3. INITIAL PUBLIC OFFERING This note details the terms and proceeds of the company's initial public offering - On January 30, 2025, the company consummated its IPO, selling 8,000,000 units at $10.00 per unit, generating gross proceeds of $80,000,00057 NOTE 4. PRIVATE PLACEMENT This note describes the concurrent private placement of units and warrants - Simultaneously with the IPO, the Sponsor and Ramnaraine Jaigobind purchased 248,300 private units at $10.00 each, generating $2,483,00058 - The Sponsor also purchased 1,000,000 $15 Private Warrants at $0.10 each, for an aggregate purchase price of $100,00058 NOTE 5. RELATED PARTY TRANSACTIONS This note discloses transactions and agreements between the company and its related parties - Initially, 2,156,250 Founder Shares were issued to the Sponsor for $25,000. Due to the underwriters' over-allotment option termination, 300,000 Founder Shares were forfeited, leaving 2,000,000 outstanding as of June 30, 20255961 - The company had two promissory notes with the Sponsor: an initial $125,000 note and an unsecured $417,000 note (bearing 12% interest). Both notes were fully repaid by April 1, 2025, with no outstanding balance as of June 30, 20256364 - An administrative services agreement with the Sponsor entails a monthly fee of $15,000, with $90,000 paid as of June 30, 202565 NOTE 6. COMMITMENTS AND CONTINGENCIES This note outlines the company's contractual obligations and potential future liabilities - Holders of Founder Shares, Private Units, and $15 Private Warrants are entitled to registration rights, with the company bearing filing expenses67 - The underwriters' over-allotment option for 1,200,000 units was terminated on February 5, 202568 - A $750,000 underwriting discount was paid at IPO closing, and 3.5% deferred underwriting commissions are due upon Business Combination completion6970 - The financial advisor received $250,000 and 25,000 Advisor Units at IPO closing71 NOTE 7. STOCKHOLDERS' EQUITY This note provides details on the company's common shares, rights, and warrants outstanding - As of June 30, 2025, there were 2,295,800 common shares outstanding (excluding 8,000,000 redeemable shares)73 - Total rights outstanding were 829,580, including 800,000 Public Rights73 - There are 1,000,000 $15 Private Warrants outstanding, exercisable at $15.00 per share for 10 years from the Business Combination date74 NOTE 8. SUBSEQUENT EVENTS This note reports significant events that occurred after the balance sheet date - On July 21, 2025, the company made a final withdrawal of $626,329 from the Trust Account for working capital purposes, bringing the aggregate withdrawal to $1,200,00076 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's analysis of the company's financial condition, operational results, liquidity, and critical accounting policies Overview This section introduces the company's nature as a blank check entity and its operational status - FG Merger II Corp. is a blank check company formed on September 20, 2023, to pursue a business combination, with an intended focus on the financial services industry7980 - As of June 30, 2025, the company had not commenced operations and generates non-operating income from interest on IPO proceeds held in a trust account81 Recent Developments This section highlights the company's recent IPO, private placement, and trust account funding activities - The company consummated its IPO on January 30, 2025, selling 8,000,000 units at $10.00 per unit, generating $80,000,000 in gross proceeds82 - A concurrent private placement generated $2,483,000 from private units and $100,000 from $15 private warrants8384 - $80,800,000 from the IPO and private placement was placed in a trust account, to be used for a business combination within 24 months8894 - The Business Combination must have a fair market value of at least 80% of the net assets in the Trust Account87 Results of Operations This section analyzes the company's financial performance, focusing on income and expenses over specific periods - The company reported net income for the three and six months ended June 30, 2025, primarily from investment income in the Trust Account, contrasting with net losses in the prior year979899 | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :---------------------------------- | :------------------------------- | :----------------------------- | | Net income | $582,035 | $897,385 | | Investment income on Trust Account | $842,499 | $1,402,254 | | General and administrative expenses | $83,539 | $210,395 | | Income tax expense | $176,925 | $294,474 | | Metric | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :----------------------------- | | Net loss | $(885) | $(2,182) | | General and administrative expenses | $885 | $2,182 | Liquidity and Capital Resources This section discusses the company's cash position, sources of liquidity, and capital management - As of June 30, 2025, the company had a cash balance of $517,813100 - Liquidity was primarily provided by the $80,000,000 IPO proceeds and $2,583,000 from private placements, with $80,800,000 placed in the Trust Account and approximately $2,200,000 retained for working capital102103 - The company withdrew $573,671 from the Trust Account for working capital as of June 2025, with a total withdrawal limit of $1,200,000104 - Promissory notes from the Sponsor totaling $125,000 and $417,000 were fully repaid by June 30, 2025100101 Off-Balance Sheet Arrangement This section addresses any off-balance sheet financial commitments or arrangements - The company had no off-balance sheet arrangements as of June 30, 2025106 Contractual Obligations This section details the company's commitments arising from various agreements and arrangements - The company is obligated to bear expenses for registration rights of Founder Shares, Private Units, and $15 Private Warrants holders107 - The underwriters' over-allotment option was terminated on February 5, 2025. A $750,000 underwriting discount was paid at IPO closing, with 3.5% deferred underwriting commissions due upon Business Combination completion108109110 - The financial advisor received $250,000 and 25,000 Advisor Units at IPO closing111 Related Party Transactions This section describes transactions between the company and its affiliates or key personnel - Initial Founder Shares issued to the Sponsor totaled 2,156,250, with 300,000 shares forfeited due to the underwriters' over-allotment option termination, resulting in 2,000,000 Founder Shares outstanding as of June 30, 2025112114 - Two promissory notes from the Sponsor, for $125,000 and $417,000, were fully repaid by April 1, 2025116117 - The company has an administrative services agreement with the Sponsor for a monthly fee of $15,000, with $90,000 paid as of June 30, 2025118 Critical Accounting Policies This section explains the significant accounting policies and estimates used in financial reporting - The financial statements adhere to GAAP and SEC rules, and the company, as an emerging growth company, utilizes the extended transition period for new accounting standards121122123 - Deferred offering costs of $1,481,031 were charged to shareholders' equity upon IPO completion127 - Marketable securities in the Trust Account are primarily invested in U.S. Treasury obligation money market funds, with $573,671 withdrawn for working capital by June 30, 2025128 - Common stock subject to possible redemption is classified as temporary equity, and income tax expense of $294,474 was estimated on Trust Account income as of June 30, 2025129133 - The company uses a two-class methodology for earnings per share calculation and determines the fair value of marketable securities in the Trust Account using Level 1 inputs134139 Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, FG Merger II Corp. is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk142 Item 4. Controls and Procedures This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures This section reports on the effectiveness of the company's disclosure controls and procedures - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025144 Changes in Internal Control Over Financial Reporting This section addresses any material changes in the company's internal control over financial reporting - There were no material changes in the company's internal control over financial reporting during the three months ended June 30, 2025145 PART II – OTHER INFORMATION This part includes disclosures on legal proceedings, equity sales, and other miscellaneous information relevant to the company Item 1. Legal Proceedings The company reported no legal proceedings - The company has no legal proceedings147 Item 1A. Risk Factors As a smaller reporting company, FG Merger II Corp. is not required to provide risk factor disclosures - The company is a smaller reporting company and is not required to provide risk factor information148 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details unregistered equity sales, including Founder Shares and private placements, and the use of IPO proceeds - Initially, 2,156,250 Founder Shares were issued to the Sponsor for $25,000. Following the termination of the underwriters' over-allotment option, 300,000 Founder Shares were forfeited, leaving 2,000,000 outstanding as of June 30, 2025149151 - The IPO on January 30, 2025, generated gross proceeds of $80,000,000 from the sale of 8,000,000 units152 - A private placement concurrent with the IPO generated $2,483,000 from private units and $100,000 from $15 private warrants153 - $80,800,000 from the IPO and private placement was placed in the Trust Account. The company paid $750,000 in underwriting fees, $250,000 in advisor fees, and approximately $482,000 for other IPO-related costs155156 Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - The company has no defaults upon senior securities157 Item 4. Mine Safety Disclosures This item is not applicable to the company - Mine safety disclosures are not applicable to the company158 Item 5. Other Information The company reported no other information - The company has no other information to report under this item159 Item 6. Exhibits This section lists all exhibits filed as part of, or incorporated by reference into, the Quarterly Report, including various certifications and XBRL documents - Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2**)161 - XBRL documents (Instance, Taxonomy Extension Calculation, Schema, Definition, Labels, Presentation Linkbase Documents) are filed161 - A Cover Page Interactive Data File (formatted as Inline XBRL) is included161 SIGNATURES This section includes the official signatures certifying the accuracy of the report - The report was signed on July 25, 2025, by Hassan R. Baqar, Chief Financial Officer164
FG Merger II Corp(FGMC) - 2025 Q2 - Quarterly Report