Armada Acquisition Corp II Unit(AACIU) - 2025 Q3 - Quarterly Report

General Information This section provides an overview of Armada Acquisition Corp. II's company status and a cautionary note regarding forward-looking statements Company Information Armada Acquisition Corp. II is a Cayman Islands exempted shell company, classified as a non-accelerated filer, smaller reporting company, and emerging growth company - Registrant is a Non-accelerated filer, Smaller reporting company, and Emerging growth company[5] - Registrant is a shell company[6] Outstanding Shares as of August 8, 2025 | Share Class | Number of Shares | | :---------- | :--------------- | | Class A Ordinary Shares | 23,710,000 | | Class B Ordinary Shares | 7,880,000 | Cautionary Note Regarding Forward-Looking Statements This section provides a standard cautionary note on forward-looking statements, emphasizing inherent risks and uncertainties that may cause actual results to differ - The report contains forward-looking statements subject to known and unknown risks, uncertainties, and assumptions that may cause actual results to differ materially[9] PART I. FINANCIAL INFORMATION This part presents the unaudited condensed financial statements and management's discussion and analysis of the company's financial condition and operations Item 1. Financial Statements This section presents the unaudited condensed financial statements, including the Balance Sheet, Statements of Operations, Changes in Stockholders' Deficit, and Cash Flows, along with detailed explanatory notes Unaudited Condensed Balance Sheet This section presents the unaudited condensed balance sheet as of June 30, 2025, detailing assets, liabilities, and equity Unaudited Condensed Balance Sheet as of June 30, 2025 | ASSETS/LIABILITIES & EQUITY | Amount ($) | | :-------------------------- | :--------- | | TOTAL ASSETS | 232,905,857| | Cash | 479,526 | | Cash and marketable securities held in Trust Account | 232,132,945| | TOTAL LIABILITIES | 9,353,587 | | Deferred underwriting fee payable | 9,200,000 | | Class A ordinary shares subject to possible redemption | 232,132,945| | Total Shareholders' Deficit | (8,580,675)| Unaudited Condensed Statements of Operations This section presents the unaudited condensed statements of operations for the periods ended June 30, 2025, detailing revenues and expenses Unaudited Condensed Statements of Operations | Metric | Three Months Ended June 30, 2025 ($) | Period from Oct 3, 2024 (Inception) Through June 30, 2025 ($) | | :--------------------------------------- | :----------------------------------- | :---------------------------------------------------------------- | | General and administrative costs | 95,799 | 142,289 | | Loss from operations | (95,799) | (142,289) | | Interest earned on cash and marketable securities held in Trust Account | 982,945 | 982,945 | | Net income | 887,146 | 840,656 | | Basic net income per ordinary share, Class A ordinary shares subject to redemption | 0.05 | 0.08 | | Diluted net income per ordinary share, Class A ordinary shares subject to redemption | 0.05 | 0.07 | Unaudited Condensed Statement of Changes in Stockholders' Deficit This section presents the unaudited condensed statement of changes in stockholders' deficit from inception through June 30, 2025 Changes in Shareholders' Deficit (Oct 3, 2024 - June 30, 2025) | Item | Amount ($) | | :------------------------------------------------ | :--------- | | Balance – October 3, 2024 (Inception) | — | | Issuance of Class B ordinary shares | 25,000 | | Net loss (Oct 3, 2024 - Dec 31, 2024) | (45,784) | | Balance – December 31, 2024 | (20,784) | | Net loss (Jan 1, 2025 - Mar 31, 2025) | (706) | | Balance – March 31, 2025 | (21,490) | | Accretion of Class A ordinary shares to redemption amount | (19,869,840)| | Capital contribution by Sponsor | 4,621,895 | | Cost of raising capital | (4,621,895)| | Sale of Private Placement Units | 7,100,000 | | Fair Value of Public Warrants at issuance | 3,565,000 | | Allocated value of transaction costs | (241,491) | | Net income (Apr 1, 2025 - June 30, 2025) | 887,146 | | Balance – June 30, 2025 | (8,580,675)| Unaudited Condensed Statement of Cash Flows This section presents the unaudited condensed statement of cash flows from inception through June 30, 2025, categorizing operating, investing, and financing activities Unaudited Condensed Statement of Cash Flows (Oct 3, 2024 - June 30, 2025) | Cash Flow Activity | Amount ($) | | :------------------------------------ | :--------- | | Net cash used in operating activities | (282,830) | | Net cash used in investing activities | (231,150,000)| | Net cash provided by financing activities | 231,912,356| | Net Change in Cash | 479,526 | | Cash – End of period | 479,526 | - Non-Cash investing and financing activities include $126,826 in accrued offering costs, $9,840 in deferred offering costs paid via promissory note, $19,869,840 accretion of Class A ordinary shares to redemption value, $9,200,000 deferred underwriting fee payable, and $100,600 deferred offering costs applied to prepaid expenses[22] Notes to Unaudited Condensed Financial Statements This section provides detailed notes explaining the company's organization, significant accounting policies, IPO, private placement, commitments, and fair value measurements NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS This note describes the company's formation as a blank check company, its IPO, private placement, and the purpose of the Trust Account - The Company was incorporated on October 3, 2024, as a blank check company (SPAC) to effect a business combination[25] - Target industries for business combinations include FinTech, SaaS, or AI[25] - The Initial Public Offering of 23,000,000 units at $10.00 per unit closed on May 22, 2025, generating $230,000,000 gross proceeds, including the full exercise of the over-allotment option[27] - Simultaneously, 710,000 private placement units were sold at $10.00 per unit, generating $7,100,000 gross proceeds[27] - Transaction costs totaled $14,413,386, comprising $4,600,000 cash underwriting fee, $9,200,000 deferred underwriting fee, and $613,386 other offering costs[28] - A total of $231,150,000 from the IPO and private placement proceeds is held in a Trust Account, invested in U.S. government treasury obligations or money market funds[29] - The Company has 18 months from the IPO closing to complete a Business Combination; otherwise, public shares will be redeemed[34] NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines the significant accounting policies, including GAAP compliance, emerging growth company status, and treatment of trust assets and equity - Financial statements are prepared in accordance with GAAP for interim financial information, with certain disclosures condensed or omitted per SEC rules[36] - The Company is an 'emerging growth company' and has elected not to opt out of the extended transition period for new or revised financial accounting standards[38][39] - Cash and marketable securities held in the Trust Account ($232,132,945 as of June 30, 2025) are primarily invested in U.S. Treasury bills maturing September 16, 2025[41] - Offering costs are allocated between Class A ordinary shares (charged to temporary equity) and warrants (charged to shareholders' deficit)[45] - The Company is an exempted Cayman Islands company and is not subject to income taxes in the Cayman Islands or the United States for the period presented[48] - Class A ordinary shares subject to possible redemption are classified as temporary equity and adjusted to redemption value at each reporting period[49] - Public and Private Placement Warrants are classified under equity treatment at their assigned values[50] Net Income Per Ordinary Share (June 30, 2025) | Metric | Three Months Ended June 30, 2025 | Period from Oct 3, 2024 (Inception) Through June 30, 2025 | | :------------------------------------------------ | :------------------------------- | :---------------------------------------------------------------- | | Basic net income per ordinary share (Class A - Redeemable) | $0.05 | $0.08 | | Basic net income per ordinary share (Class A & B - Non-redeemable) | $0.05 | $0.08 | | Diluted net income per ordinary share (Class A - Redeemable) | $0.05 | $0.07 | | Diluted net income per ordinary share (Class A & B - Non-redeemable) | $0.05 | $0.07 | - The Company adopted ASU 2023-07 (Segment Reporting) on October 3, 2024, its date of incorporation[54] Note 3 — Initial Public Offering This note details the Initial Public Offering, including units sold, warrant terms, and redemption conditions - On June 30, 2025, the Company sold 23,000,000 units at $10.00 per unit, including the full exercise of the underwriters' overallotment option[56] - Each unit consists of one Class A ordinary share and one-half of one redeemable warrant, exercisable for whole shares at $11.50 per share[56][57] Warrants Outstanding as of June 30, 2025 | Warrant Type | Number Outstanding | | :----------- | :----------------- | | Public Warrants | 11,500,000 | | Private Placement Warrants | 355,000 | - Warrants expire on the fifth anniversary of the Business Combination completion or earlier upon redemption[57] - The Company may redeem outstanding warrants at $0.01 per warrant if the Class A ordinary share price equals or exceeds $18.00 for 20 trading days within a 30-trading day period[62][65] Note 4 — Private Placement This note describes the private placement of shares and units to the Sponsor and underwriters, including related party transactions - The Sponsor purchased 7,880,000 Class B ordinary shares for $25,000 on November 7, 2024; these shares are no longer subject to forfeiture after the underwriters' over-allotment option was fully exercised[66] - The Sponsor purchased 400,000 private placement units for $4,000,000, and underwriters purchased 310,000 private placement units for $3,100,000[67] - Non-managing investors purchased 300,000 Private Placement Units and were allocated interests in 2.4 million founder shares, valued at $4,621,895 ($1.93 per share) as an offering cost[69][70] - A promissory note from the Sponsor for up to $300,000 was repaid on May 22, 2025, with an outstanding balance of $143,079[72] - The Company owes related parties $808 for expenses as of June 30, 2025[73] - The Company pays the Sponsor $12,000 per month for administrative services, with payments deferred until new financing occurs[74] Note 5 — Commitments and Contingencies This note outlines the company's commitments and contingencies, including registration rights, deferred underwriting fees, and advisor fees - Initial shareholders and non-managing investors have registration rights for Founder Shares, Private Placement Shares, Warrants, and underlying securities[77] - The Company paid a $4,600,000 cash underwriting discount and has a deferred underwriting fee of $9,200,000, payable upon completion of a Business Combination[79] - Northland Securities, Inc. is entitled to a 1.0% Finder Fee upon closing of a Business Combination and up to $20,000 in reimbursed expenses[80] - Bishop IR is engaged as an investor relations advisor for a monthly fee of $8,500 and a $100,000 success fee, both payable upon closing of a Business Combination[81] Note 6 — Shareholders' Deficit This note details the authorized and outstanding share capital, including preferred, Class A, and Class B ordinary shares - The Company is authorized to issue 1,000,000 preferred shares, with none issued or outstanding as of June 30, 2025[82] - As of June 30, 2025, there were 710,000 Class A ordinary shares issued and outstanding (excluding 23,000,000 subject to redemption) and 7,880,000 Class B ordinary shares issued and outstanding[83][84] Note 7 — Segment Information This note confirms the company operates as a single segment and lists key financial metrics reviewed by management - The Company operates as a single segment, with the Chief Financial Officer (CODM) assessing performance and allocating resources[85] Key Metrics Reviewed by CODM | Metric | June 30, 2025 ($) | | :------------------------------------ | :---------------- | | Cash | 479,526 | | Cash and marketable securities held in Trust Account | 232,132,945 | | Metric | For the Three Months Ended June 30, 2025 ($) | For period from Oct 3, 2024 (Inception) through June 30, 2025 ($) | | :------------------------------------ | :------------------------------------------- | :---------------------------------------------------------------- | | General administrative costs | 95,799 | 142,289 | | Interest earned on cash and marketable securities held in Trust Account | 982,945 | 982,945 | Note 8 — Fair Value Measurements This note explains the fair value hierarchy and provides valuations for assets, public warrants, and founder share interests using specific models and assumptions - Fair value hierarchy prioritizes inputs: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[87][88] Fair Value of Assets as of June 30, 2025 | Assets | Level | Amount ($) | | :------------------------------------ | :---- | :--------- | | Cash and marketable securities held in Trust Account | 1 | 232,132,945| - The fair value of Public Warrants is $3,565,000 ($0.31 per warrant), determined using a Monte Carlo Simulation Model[89] Market Assumptions for Public Warrants Valuation (May 22, 2025) | Metric | Value | | :----------- | :------ | | Volatility | 6.4% | | Risk free rate | 3.99% | | Stock price | $9.845 | | Weighted term (Yrs) | 2.99 | - The fair value of 2,400,000 interests in founder shares allocated to non-managing members was $4,621,895 ($1.93 per share), also determined using a Monte Carlo Simulation Model[89] Market Assumptions for Founder Shares Interests Valuation (May 22, 2025) | Metric | Value | | :----------- | :------ | | Volatility | 6.40% | | Risk free rate | 4.09% | | Stock price | $9.845 | | Weighted term (Yrs) | 1.34 | Note 9 — Subsequent Events This note confirms no subsequent events requiring adjustment or disclosure were identified through the financial statement issuance date - No subsequent events requiring adjustment or disclosure were identified through the date the financial statements were issued[91] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, results of operations, liquidity, and capital resources, detailing its SPAC status and IPO proceeds Overview This overview reiterates the company's formation as a blank check company, details the IPO and private placement proceeds, and the Trust Account's purpose - Armada Acquisition Corp. II is a blank check company formed on October 3, 2024, to effect a business combination[95] - The Initial Public Offering closed on May 22, 2025, raising $230,000,000 gross proceeds from 23,000,000 units[96] - A private placement of 710,000 units simultaneously generated $7,100,000 gross proceeds[97] - Transaction costs amounted to $14,413,386, including $9,200,000 in deferred underwriting fees[98] - $231,150,000 of net proceeds were placed in a Trust Account, invested in U.S. government securities or money market funds[99] - The Company must complete a Business Combination within 18 months from the IPO closing (by November 22, 2026) or redeem public shares and liquidate[100] Results of Operations This section details the company's financial performance, noting no operating revenues and income primarily from Trust Account interest - The Company has not engaged in operations or generated revenues to date, with activities focused on formation and the IPO[102] - Non-operating income is generated from interest on marketable securities in the Trust Account[102] Net Income Summary | Period | Net Income ($) | Interest Income ($) | General & Administrative Costs ($) | | :------------------------------------ | :------------- | :------------------ | :--------------------------------- | | Three months ended June 30, 2025 | 887,146 | 982,945 | 95,799 | | Oct 3, 2024 (inception) - June 30, 2025 | 840,656 | 982,945 | 142,289 | Liquidity and Capital Resources This section discusses the company's liquidity and capital resources, including IPO proceeds, Trust Account holdings, and cash outside the Trust Account - The IPO and Private Placement generated gross proceeds of $230,000,000 and $7,100,000, respectively[104] - A total of $231,150,000 was placed in the Trust Account, with transaction costs of $14,413,386[105] - Cash used in operating activities from inception through June 30, 2025, was $282,830[106] - As of June 30, 2025, the Trust Account held $232,132,945 (including $982,945 interest income), primarily in U.S. Treasury Bills[107] - The Company had $479,526 in cash outside the Trust Account as of June 30, 2025, intended for identifying and evaluating target businesses[108] - The Sponsor or affiliates may provide Working Capital Loans, repayable upon Business Combination completion or from working capital outside the Trust Account if no combination occurs[109] - The Company does not anticipate needing additional funds for operations but may require financing for a Business Combination or significant share redemptions[110] Off-Balance Sheet Arrangements This section confirms the absence of any off-balance sheet arrangements as of June 30, 2025 - The Company has no off-balance sheet arrangements as of June 30, 2025[111] Contractual Obligations This section outlines the company's contractual obligations, including administrative service fees, deferred underwriting commissions, and advisor fees - The Company has an agreement to pay the Sponsor $12,000 per month for administrative services, ceasing upon Business Combination or liquidation[112] - Underwriters are entitled to a deferred underwriting commission of $9,200,000, payable upon completion of an initial Business Combination[114] - Northland Securities, Inc. is eligible for a 1.0% transaction fee and up to $20,000 in reimbursed expenses upon closing of a Business Combination[115] - Bishop IR is engaged for investor relations, with a monthly fee of $8,500 and a $100,000 success fee, both contingent on Business Combination closing[116] Critical Accounting Estimates This section states that the company did not have any critical accounting estimates to disclose as of June 30, 2025 - As of June 30, 2025, the Company did not have any critical accounting estimates to disclose[117] Recent Accounting Pronouncements This section discusses the adoption of ASU 2023-07 and management's assessment of other recent accounting pronouncements - The Company adopted ASU 2023-07, 'Segment Reporting,' on October 3, 2024, its date of incorporation[118][119] - Management believes no other recently issued, but not yet effective, accounting pronouncements would materially affect the condensed financial statements[120] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Armada Acquisition Corp. II is exempt from providing quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide disclosures about market risk[121] Item 4. Controls and Procedures Management evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they were effective with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[122] - No material changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[124] PART II. OTHER INFORMATION This part covers other information including legal proceedings, risk factors, unregistered sales of equity, and exhibits Item 1. Legal Proceedings Armada Acquisition Corp. II reports no legal proceedings - There are no legal proceedings[126] Item 1A. Risk Factors As a smaller reporting company, Armada Acquisition Corp. II is not required to provide specific risk factor disclosures - The Company is a smaller reporting company and is not required to provide risk factor information[127] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details unregistered sales of equity securities, including Founder Shares and Private Placement Units, and confirms the consistent use of IPO and Private Placement proceeds - 7,880,000 Founder Shares were issued on November 7, 2024, for a $25,000 capital contribution, exempt under Section 4(a)(2) of the Securities Act[128] - 710,000 Private Placement Units were purchased by the Sponsor, Cohen, and Northland on May 22, 2025, also exempt under Section 4(a)(2)[129] - The Initial Public Offering generated $230,000,000 gross proceeds from 23,000,000 units[131] - Offering costs totaled approximately $14.4 million, with $231,150,000 of net proceeds placed in the Trust Account[132] - There has been no material change in the planned use of proceeds from the IPO and Private Placement[133] Item 3. Defaults Upon Senior Securities Armada Acquisition Corp. II reports no defaults upon senior securities - There are no defaults upon senior securities[134] Item 4. Mine Safety Disclosures Mine Safety Disclosures are not applicable to Armada Acquisition Corp. II - Mine Safety Disclosures are not applicable[135] Item 5. Other Information Armada Acquisition Corp. II reports no other information under this item - There is no other information to report[136] Item 6. Exhibits This section lists all exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q - Exhibits include Amended and Restated Memorandum and Articles of Association, Warrant Agreement, Private Placement Unit Subscription Agreements, Investment Management Trust Agreement, Registration Rights Agreement, Administrative Services Agreement, Letter Agreement, Form of Indemnity Agreement, and various XBRL documents[138] SIGNATURES The report was signed on August 11, 2025, by the Chief Executive Officer and the President (Principal Accounting and Financial Officer) - The report was signed on August 11, 2025, by Stephen P. Herbert (CEO) and Douglas M. Lurio (President, Principal Accounting and Financial Officer)[142]