Breeze Acquisition raises going-concern doubt
A vendor-contract review weakness affected control effectiveness, while Breeze disclosed substantial doubt about its ability to continue as a going concern.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Breeze Acquisition Corp. II reported net income of $398,121 for the three months ended June 30, 2026, and $259,915 for the six months ended that date. Trust-account interest was $624,649 for the six-month period. The company completed its initial public offering of 12,500,000 units at $10.00 per unit on May 14, 2026, followed by 1,500,000 additional units through a partial over-allotment on May 15. It placed $140,350,000 in the Trust Account; the account held $140,974,649 at June 30, while $130,963 of cash and cash equivalents was held outside it.
The company has not selected a business-combination target, and it says no substantive discussions have begun. It has until May 14, 2027 to complete a business combination; an extension requires a shareholder vote, and failure to complete within the period leads to mandatory liquidation and dissolution. As of June 30, management concluded disclosure controls were ineffective because of a material weakness in vendor-contract review. The company said an obligation that did not exist was recorded and cash was disbursed under it, and that remediation procedures are being implemented. It also stated that its financial resources raise substantial doubt about its ability to continue as a going concern within one year after the financial statements were issued.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- None.
Negative
- Major pointVendor-contract review controls had a material weakness as of June 30, 2026.
- Major pointManagement disclosed substantial doubt about continuing as a going concern within one year after the financial statements were issued.
Filing Explained
The report adds advisor cash and share compensation and a $1.15 million Sponsor receivable; registration rights cover existing and conditional securities, not an immediate issuance.
Breeze remains pre-combination; this 10-Q adds advisor compensation and resale-registration terms, which describe cash and share commitments, while registration rights themselves do not issue shares.
The advisory engagement provides
As of
The registration agreement covers up to 6,012,919 ordinary shares and 620,000 rights, assuming conversion of up to
Key Figures
Key Terms
Business Combination financial
Trust Account financial
temporary equity financial
going concern financial
material weakness financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was BREZ's net income for the three months ended June 30, 2026?
How much cash did BREZ hold in its Trust Account on June 30, 2026?
When does BREZ need to complete a business combination?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
For the transition period from ______________ to ______________
Commission File Number:
(Exact name of registrant as specified in its charter)
| N/A | ||
| (State or other jurisdiction of |
(IRS Employer |
Telephone:
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The | ||||
| The | ||||
| The |
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.
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 (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).
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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of October 14, 2026, there were
| Page | |||
| PART 1 - FINANCIAL INFORMATION | |||
| Item 1. | UNAUDITED CONDENSED FINANCIAL STATEMENTS | ||
| Condensed Balance Sheets as of June 30, 2026 (unaudited) and December 31, 2025 | 1 | ||
| Unaudited Condensed Statements of Operations for the three and six months ended June 30, 2026 | 2 | ||
| Unaudited Condensed Statement of Changes in Shareholders’ Equity (Deficit) for the three and six months ended June 30, 2026 | 3 | ||
| Unaudited Condensed Statement of Cash Flows for the six months ended June 30, 2026 | 4 | ||
| Notes to Unaudited Condensed Financial Statements | 5 | ||
| Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 17 | |
| Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 20 | |
| Item 4. | CONTROLS AND PROCEDURES | 20 | |
| PART II - OTHER INFORMATION | 21 | ||
| Item 1. | LEGAL PROCEEDINGS | 21 | |
| Item 1A. | RISK FACTORS | 21 | |
| Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 21 | |
| Item 3. | DEFAULTS UPON SENIOR SECURITIES | 21 | |
| Item 4. | MINE SAFETY DISCLOSURES | 21 | |
| Item 5. | OTHER INFORMATION | 21 | |
| Item 6. | EXHIBITS | 22 | |
| SIGNATURES | 23 | ||
i
BREEZE ACQUISITION CORP. II
CONDENSED BALANCE SHEETS
| June 30, 2026 |
December 31, 2025 |
|||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | — | |||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Cash held in trust account | — | |||||||
| Deferred offering costs | — | |||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES, REDEEMABLE ORDINARY SHARES AND SHAREHOLDERS’ EQUITY (DEFICIT): | ||||||||
| Current liabilities: | ||||||||
| Promissory note - related party | $ | — | $ | |||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 7) | ||||||||
| Ordinary shares subject to possible redemption, | — | |||||||
| Shareholders’ Equity (Deficit): | ||||||||
| Preference shares, $ | — | — | ||||||
| Ordinary shares, $ | ||||||||
| Additional paid-in capital | ||||||||
| Due from sponsor | ( | ) | — | |||||
| Retained earnings (accumulated deficit) | ( | ) | ||||||
| Total Shareholders’ Equity (Deficit) | ( | ) | ||||||
| TOTAL LIABILITIES, REDEEMABLE ORDINARY SHARES AND SHAREHOLDERS’ EQUITY (DEFICIT) | $ | $ | ||||||
| (1) |
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
BREEZE ACQUISITION CORP. II
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended June 30, 2026 |
Six Months Ended June 30, 2026 |
|||||||
| Operating and formation costs | $ | $ | ||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income: | ||||||||
| Interest on cash held in trust account | ||||||||
| Interest income | ||||||||
| Change in fair value of over-allotment liability | ||||||||
| Net income | $ | $ | ||||||
| Basic weighted average shares outstanding, ordinary shares subject to redemption | ||||||||
| Basic net income per ordinary share subject to redemption | $ | $ | ||||||
| Basic weighted average shares outstanding, ordinary shares not subject to redemption | ||||||||
| Basic net income per ordinary share not subject to redemption | $ | $ | ||||||
| Diluted weighted average shares outstanding, ordinary shares subject to redemption | ||||||||
| Diluted net income per ordinary share subject to redemption | $ | $ | ||||||
| Diluted weighted average shares outstanding, ordinary shares not subject to redemption | ||||||||
| Diluted net income per ordinary share not subject to redemption | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
BREEZE ACQUISITION CORP. II
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(UNAUDITED)
| Ordinary Shares | Additional Paid-in |
Due from | Retained Earnings (Accumulated |
Total Shareholders’ Equity |
||||||||||||||||||||
| Shares | Amount | Capital | Sponsor | Deficit) | (Deficit) | |||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | $ | — | $ | ( | ) | $ | ( | ) | ||||||||||||||
| Net loss | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
| Balance at March 31, 2026 (unaudited) | — | ( | ) | ( | ) | |||||||||||||||||||
| Allocated value of transaction costs to ordinary shares | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
| Proceeds from sale of private placement units | — | — | ||||||||||||||||||||||
| Fair value of public rights at issuance | — | — | — | — | ||||||||||||||||||||
| Fair value of representative shares included in offering costs | — | — | — | — | ||||||||||||||||||||
| Proceeds of representative shares | — | — | ||||||||||||||||||||||
| Due from Sponsor | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||
| Accretion of ordinary shares subject to redemption to redemption value | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
| Forfeiture of founder shares | ( | ) | ( | ) | — | — | — | |||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||
| Balance at June 30, 2026 (unaudited) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
3
BREEZE ACQUISITION CORP. II
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
| Six Months Ended June 30, 2026 |
||||
| Cash Flows from Operating Activities: | ||||
| Net income | $ | |||
| Interest on cash held in trust account | ( | ) | ||
| Change in fair value of over-allotment liability | ( | ) | ||
| Changes in operating assets and liabilities: | ||||
| Prepaid expenses | ( | ) | ||
| Accounts payable | ||||
| Accrued expenses | ||||
| Net cash used in operating activities | ( | ) | ||
| Cash Flows from Investing Activities: | ||||
| Cash deposited into trust account | ( | ) | ||
| Net cash used in investing activities | ( | ) | ||
| Cash Flows from Financing Activities: | ||||
| Proceeds from sale of units, net of underwriting fees and expense reimbursement | ||||
| Proceeds from private placement units | ||||
| Proceeds from promissory note - related party | ||||
| Proceeds from representative shares | ||||
| Repayment of promissory note - related party | ( | ) | ||
| Payment of offering costs | ( | ) | ||
| Due from Sponsor | ( | ) | ||
| Net cash provided by financing activities | ||||
| Net change in cash | ||||
| Cash - beginning of period | — | |||
| Cash - end of period | $ | |||
| Non-Cash Investing and Financing Activities: | ||||
| Offering costs included in accounts payable | $ | |||
| Accretion of Ordinary Shares subject to redemption to redemption value | $ | |||
| Forfeiture of Founder Shares | $ | |||
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY
Breeze Acquisition Corp. II (the “Company”) is a blank check company incorporated in the Cayman Islands on August 20, 2025. The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). The Company is not limited to a particular industry or geographic region for purposes of consummating 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 June 30, 2026, the Company had not commenced any operations. All activity for the period from August 20, 2025 (inception) through June 30, 2026 relates to the Company’s formation, the Company’s initial public offering (“Initial Public Offering” or “IPO”), which is described below, and subsequent to the IPO, the Company’s post-IPO activities, including, among others, evaluating prospective acquisition candidates and activities in connection with a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash, cash held in trust account, and cash equivalents from the proceeds derived from the Initial Public Offering and sale of Private Units (defined below). The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s Initial Public Offering was declared effective on May 12, 2026. On May 14, 2026, the Company consummated the Initial Public Offering of
On May 15, 2026, Underwriters purchased an additional
Simultaneously with the closing of the Initial Public Offering and the closing of the Over-Allotment Option, the Company consummated the private sale (“Private Placement”) of an aggregate of
Following the closing of the Initial Public Offering, the Private Placement and the Over-Allotment Option, a total of $
Transaction costs related to the issuances described above amounted to $
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination with one or more target businesses that together have an aggregate fair market value of at least
5
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company will provide its holders of the outstanding Public Shares (the “Public 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 shareholder 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, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially anticipated to be $
If the Company seeks shareholder approval with respect to a proposed Business Combination, the Company will proceed only if a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its articles of association (the “Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all.
Notwithstanding the above, if the Company seeks shareholder approval of a Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, Amended and Restated Memorandum and the 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
The Sponsor has agreed to waive redemption rights with respect to any Founder Shares (as defined in Note 6) held and any Public Shares they may have acquired during or after the Initial Public Offering in connection with the completion of a Business Combination.
The Company will have until May 14, 2027, 12 months from the closing of the Initial Public Offering to complete a Business Combination (the “Completion Period”), unless otherwise extended. However, if the Company anticipates that it may not be able to consummate a Business Combination within 12 months from the closing of the Initial Public Offering, the Company may, but is not obligated to, by resolution of the board if requested by the initial shareholders, extend the period of time to consummate a Business Combination by seeking shareholder approval to amend the Articles of Association to extend the date by which the Company must consummate the initial Business Combination. If the Company seeks shareholder approval for an extension, holders of Public Shares will be offered an opportunity to redeem their shares, regardless of whether they abstain, vote for, or against, the Company’s initial Business Combination, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned thereon (which interest shall be net of taxes paid or payable), divided by the number of then issued and outstanding Public Shares, subject to applicable law. For the avoidance of doubt, the time to complete a Business Combination shall not be extended beyond 12 months without a shareholder vote.
6
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
In order to protect the amounts held in the Trust Account, the Sponsor 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 a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $
Liquidity and Capital Resources
As of June 30, 2026, the Company had a working capital surplus of $
There is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful within the completion window. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial statements. Therefore, in connection with the Company’s assessment of going concern considerations in accordance with FASB ASC 205-40, Presentation of Financial Statements - Going Concern, these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that these financial statements were issued. The financial statements do not include any adjustments that might result from the Company’s inability to continue as a going concern.
The Company will have until the end of the Completion Period to consummate a Business Combination. If a Business Combination is not consummated by the end of the Completion Period, there will be a mandatory liquidation and subsequent dissolution of the Company. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after May 14, 2027. The Company intends to complete the initial Business Combination before the mandatory liquidation date. However, there can be no assurance that the Company will be able to consummate any Business Combination by May 14, 2027.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s final prospectus in connection with its Initial Public Offering as filed with the SEC on May 14, 2026, as well as the Company’s Current Report on Form 8-K, as filed with the SEC on June 2, 2026 as amended on Form 8-K/A on September 9, 2026.
The interim results for the period from January 1, 2026 through June 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future periods.
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”). As such, the Company is eligible 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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.
7
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 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 financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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 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 from those estimates.
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. As of June 30, 2026 and December 31, 2025, the Company held cash and cash equivalents of $
Cash Held in Trust Account
As of June 30, 2026 and December 31, 2025, the Company had $
Ordinary Shares Subject to Possible Redemption
All of the ordinary shares that were sold as part of the Initial Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with ASC 480, conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. The Company did not specify a maximum redemption threshold. However, any threshold in its charter would not change the nature of the underlying shares as redeemable and thus Public Shares would be required to be disclosed outside of permanent equity. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid-in capital, or in the absence of additional capital, in accumulated deficit.
As of June 30, 2026, the Ordinary shares reflected in the balance sheet are reconciled in the following table:
| Gross proceeds | $ | |||
| Less: | ||||
| Proceeds allocated to public share rights | ( | ) | ||
| Proceeds allocated to over-allotment liability | ( | ) | ||
| Issuance costs allocated to ordinary shares | ( | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Ordinary shares subject to possible redemption | $ |
8
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Offering Costs Associated with the Initial Public Offering
The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A, Expenses of Offering. Deferred offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs are charged to temporary equity or permanent equity based upon the relative fair value of the proceeds received from the Units sold upon the completion of the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $
Income Taxes
The Company accounts for income taxes under ASC Topic 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 statements 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 entity’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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. Since the Company was incorporated on August 20, 2025, the evaluation was performed for the 2025 tax year which will be the only period subject to examination.
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 June 30, 2026. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. There are no taxes in the Cayman Islands, and accordingly, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $
Net Income Per Ordinary Share
Net income per ordinary share is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the period. The calculation of diluted income per share does not consider the effect of the rights issued in connection with the Initial Public Offering since the exercise of the rights are contingent upon the occurrence of future events. The Company has Ordinary Shares, which are referred to as redeemable Ordinary Shares and non-redeemable Ordinary Shares. The Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into Ordinary Shares and then share in the earnings of the Company included in redeemable Ordinary Shares. As a result, diluted income per Ordinary Shares is the same as basic income per Ordinary Shares for the periods presented.
The Ordinary Shares included
9
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The following tables reflect the calculation of basic and diluted net income per share:
| Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | |||||||||||||||
| Redeemable Ordinary Shares | Non-redeemable Ordinary Shares | Redeemable Ordinary Shares | Non-redeemable Ordinary Shares | |||||||||||||
| Basic net income per share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Denominator: | ||||||||||||||||
| Weighted Average Ordinary Shares | ||||||||||||||||
| Basic net income per ordinary share | $ | $ | $ | $ | ||||||||||||
| Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | |||||||||||||||
| Redeemable Ordinary Shares | Non-redeemable Ordinary Shares | Redeemable Ordinary Shares | Non-redeemable Ordinary Shares | |||||||||||||
| Diluted net income per share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Denominator: | ||||||||||||||||
| Weighted Average Ordinary Shares | ||||||||||||||||
| Diluted net income per ordinary share | $ | $ | $ | $ | ||||||||||||
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, Fair Value Measurement, approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement date. US GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ☐ | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| ☐ | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ☐ | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. |
10
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 statements 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 sheet 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 was a freestanding financial instrument indexed to contingently redeemable shares and was initially accounted for as a liability. Upon the partial exercise of the option, the portion attributable to the exercised units was reclassified to the carrying amount of the related redeemable ordinary shares. Upon expiration of the option, the liability associated with the remaining unexercised portion was recognized in earnings.
Share Rights
The Company will account for the Public and Private Placement Rights to be issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in FASB ASC Topic 815, Derivatives and Hedging. Accordingly, the Company evaluated and will classify the rights under equity treatment at their assigned values. There are
Risks and Uncertainty
The United States and global markets continue to experience volatility and disruption resulting from geopolitical instability, including the ongoing Russia-Ukraine conflict and escalating conflicts in the Middle East, including those involving the United States, Israel and Iran. These events and related actions by the United States, the United Kingdom, the European Union and other countries, including the imposition of sanctions and the provision of military and other assistance, have contributed to global economic uncertainty. The resulting conditions have led, and may continue to lead, to disruptions in global markets, including volatility in commodity prices and capital markets, supply chain interruptions (including disruptions to key maritime routes), heightened cybersecurity risks and reduced liquidity in financial markets. The extent and duration of these impacts remain uncertain.
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 escalating conflicts in the Middle East and subsequent sanctions or related actions, 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.
Recent Accounting Standards
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this ASU require disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU did not have a material impact on the Company’s financial statements and disclosures.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company sold
Subsequent to the Initial Public Offering on May 15, 2026, the Underwriters partially exercised their Over-Allotment Option to purchase an additional
11
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering and Over-Allotment Option, the Company consummated the sale of
NOTE 5. SEGMENT INFORMATION
ASC Topic 280, Segment Reporting, establishes standards for companies to report, in their financial statements, 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, or group, in deciding how to allocate resources and assess performance.
| June 30, 2026 | December 31, 2025 | |||||||
| Cash and cash equivalents | $ | $ | - | |||||
| Prepaid expenses | ||||||||
| Cash held in Trust Account | - | |||||||
| Deferred offering costs | - | |||||||
| Total assets | $ | $ | ||||||
| Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | |||||||
| Formation, general and administrative expenses | $ | ( | ) | $ | ( | ) | ||
| Interest earned on cash held in Trust Account | ||||||||
| Interest income | ||||||||
| Change in fair value of over-allotment liability | ||||||||
| Net income | $ | $ | ||||||
12
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The CODM reviews formation, general and administrative expenses to manage and forecast cash to ensure enough capital is available to complete a business combination or similar transaction within the business combination period. The CODM also reviews formation, general and administrative expenses to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. Formation, general and administrative expenses, as reported on the statement of operations, are the significant segment information provided to the CODM on a regular basis. All other segment items included in net income or loss are reported on the statement of operations and described within their respective disclosures.
The CODM reviews the position of total assets available with the Company to assess if the Company has sufficient resources available to discharge its liabilities. The CODM is provided with details of cash and liquid resources available with the Company. Additionally, the CODM regularly reviews the status of deferred costs incurred to assess if these are in line with the planned use of proceeds to be raised from the public offering.
NOTE 6. RELATED PARTY TRANSACTIONS
Founder Shares
On September 8, 2025, the Sponsor was issued
The Founder Shares included an aggregate of up to
On May 15, 2026, the Underwriter partially exercised its over-allotment option for an additional
The number of Founder Shares issued was determined based on the expectation that such Founder Shares would represent
The Sponsor has agreed not to transfer, assign or sell its Founder Shares until the earlier to occur of: (i) six months after the date of the consummation of the Company’s Initial Business Combination and (2) the date on which the Company consummates a liquidation, merger, share exchange, reorganization, or other similar transaction after the Company’s initial business combination that results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property. If the last sale price of the Company’s ordinary shares equals or exceed $
Promissory Note - Related Party
On August 20, 2025, the Sponsor agreed to loan the Company an aggregate of up to $
Working Capital Loans and Extension Loans
In order to meet our working capital needs following the consummation of the Initial Public Offering until completion of an initial Business Combination, our founders, officers and directors or their affiliates or designees may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion (“Working Capital Loans”). Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial Business Combination, without interest, or, at the lender’s discretion, up to $
13
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Administrative Support Agreement
The Company is obligated, commencing on the date of Initial Public Offering, to pay the Sponsor, a monthly fee of $
Due from Sponsor
At June 30, 2026, the Company has a receivable of $
NOTE 7. COMMITMENTS AND CONTINGENCIES
Registration and Shareholder Rights Agreement
In connection with the closing of the Initial Public Offering, the Company entered into a registration and shareholder rights agreement pursuant to which the holders of the Founder Shares, Private Units and the securities comprising the Private Units, and any Private Units that may be issued upon conversion of Working Capital Loans are entitled to certain registration rights with respect to such securities and certain other securities acquired prior to the consummation of the Company’s initial Business Combination.
Pursuant to the registration rights agreement and assuming the $
The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the Initial Public Offering.
Underwriting Agreement
Pursuant to the underwriting agreement, the Sponsor and the executive officers and directors have agreed that, for a period of
The Company granted the underwriters a
The underwriters were entitled to a cash underwriting discount of
14
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Subsequent to the Initial Public Offering that occurred on May 14, 2026, the underwriter partially exercised the over-allotment option for the purchase of an additional
Representative Shares
At the closing of the IPO, the Company issued
NOTE 8. SHAREHOLDERS’ EQUITY
Preference shares — The Company is authorized to issue
Ordinary shares — The Company is authorized to issue
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders.
Rights — Except in cases where the Company is not the surviving company in a business combination, each holder of a right will automatically receive one-fifth of one ordinary share upon consummation of the initial Business Combination. The Company will not issue fractional shares in connection with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of Cayman law. In the event the Company is not the surviving company upon completion of the initial Business Combination, each holder of a right will be required to affirmatively convert his, her or its rights in order to receive the one-fifth of one ordinary share underlying each right upon consummation of the Business Combination. If the Company is unable to complete the initial Business Combination within the required time period and the Company will redeem the public shares for the funds held in the Trust Account, holders of rights will not receive any of such funds for their rights and the rights will expire worthless.
NOTE 9. 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. |
15
BREEZE ACQUISITION CORP. II
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 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 fair value of the over-allotment option was initially $
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 date 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. Constant Maturity Treasury rates on the grant date for a maturity similar to the expected remaining life of the option.
| May 14, 2026 | ||||
| Underlying stock price | $ | |||
| Exercise price | $ | |||
| Volatility | % | |||
| Time to expiration | ||||
| Risk-free rate | % | |||
The fair value of the Public and Private Rights issued in the Initial Public Offering is approximately $
The following table presents the quantitative information regarding market assumptions used in the Level 3 valuation of the Public and Private Rights issued in the Initial Public Offering:
| May 14, 2026 | ||||
| Implied Ordinary share price | $ | |||
| Volatility | % | |||
| Expected term to de-SPAC (years) | ||||
| Probability of de-SPAC and instrument-specific market adjustment | % | |||
| Risk-free rate | % | |||
The Company determined the fair value of the Representative Shares to be approximately $
| May 14, 2026 | ||||
| Implied common stock price | $ | |||
| Discount for expected forfeiture of shares | % | |||
| Probability of De-SPAC and Market Adjustment | % | |||
| Discount for Lack of Marketability | % | |||
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Except as noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
On August 20, 2026, the Company received a notice (the “Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that, because the Company had not filed its Quarterly Report on Form 10-Q for the period ended March 31, 2026 and Quarterly Report on Form 10-Q for the period ended June 30, 2026 (the “Delinquent Filings”), the Company no longer complies with Nasdaq Listing Rule 5250(c)(1), which requires listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission (the “SEC”). The Company subsequently filed its Quarterly Report on Form 10-Q for the period ended March 31, 2026 on September 23, 2026 with the SEC.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Breeze Acquisition Corp. II References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Breeze Sponsor II. 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 Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering (as defined below) filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated in Cayman Islands on August 20, 2025 formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
Our IPO registration statement became effective on May 12, 2026. On May 14, 2026, we consummated our Initial Public Offering of 12,500,000 units generating gross proceeds of $125,000,000.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 447,500 Private Units at a price of $10.00 per Private Unit, generating gross proceeds of $4,475,000.
On May 15, 2026, the Underwriter partially exercised its over-allotment option for an additional 1,500,000 Public Units at a price of $10.00 per Unit or $15,000,000. In conjunction with the Underwriter’s partial exercise of the over-allotment option, the Sponsor purchased an additional 22,500 Private Placement Units for $225,000.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities for the three and six months ended June 30, 2026, were organizational activities, those necessary to prepare for our Initial Public Offering. We do not expect to generate any operating revenues until after the completion of our initial business combination. We will generate non-operating income in the form of interest income on investments held in our trust account after the Initial Public Offering. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three and six months ended June 30, 2026, we had net income of $398,121 and $259,915, respectively, which resulted from operating and formation costs offset by interest earned on cash held in the trust account and change in fair value of over-allotment liability.
17
Through June 30, 2026, our efforts have been limited to organizational activities, activities relating to the Initial Public Offering and activities relating to general corporate matters.
Liquidity and Capital Resources
Following the closing of the Initial Public Offering, including the partial exercise of the over-allotment option, and the private placement, a total of $140,350,000 was placed in the Trust Account. We incurred transaction costs related to the issuances described above amounting to $2,698,154, consisting of $1,750,000 of cash underwriting fees, $472,654 of other offering costs, $325,500 of Representative Shares and $150,000 of Underwriters’ reimbursement.
For the six months ended June 30, 2026, net cash used in operating activities was $656,165, which was due to our net income of $259,915, partially offset by $624,649 of interest earned on cash held by trust account and changes in working capital accounts of $270,431.
For the six months ended June 30, 2026, net cash used in investing activities was $140,350,000, which was due to cash deposited into the trust account.
For the six months ended June 30, 2026, net cash provided by financing activities was $141,137,128, which was primarily due to $138,100,000 proceeds from the sale of units, net of underwriting fees, $4,700,000 proceeds from private placement units and $3,500 proceeds from the issuance of the representative shares; partially offset by $1,150,000 due from sponsor arising from the private placements issued that the Company has not received consideration, $353,722 payment of deferred offering costs, and $162,650 payment of related party promissory note.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the funds held in the trust account and not previously released to us to pay our taxes (which interest shall be net of taxes payable and excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay our taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest earned on the amount in the trust account will be sufficient to pay our taxes. We expect the only taxes payable by us out of the funds in the trust account will be income and franchise taxes, if any. To the extent that our ordinary shares or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
There is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful within the completion window. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial statements. Therefore, in connection with the Company’s assessment of going concern considerations in accordance with FASB ASC 205-40, Presentation of Financial Statements - Going Concern, these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that these financial statements were issued. The financial statements do not include any adjustments that might result from the Company’s inability to continue as a going concern.
The Company will have until the end of the Completion Period to consummate a Business Combination. If a Business Combination is not consummated by the end of the Completion Period, there will be a mandatory liquidation and subsequent dissolution of the Company. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after May 14, 2027. The Company intends to complete the initial Business Combination before the mandatory liquidation date. However, there can be no assurance that the Company will be able to consummate any Business Combination by May 14, 2027.
Off-Balance Sheet Arrangements
As of June 30, 2026, we did not have any off-balance sheet arrangements.
Contractual Obligations
Registration and Shareholder Rights Agreement
In connection with the closing of the Initial Public Offering, the Company entered into a registration and shareholder rights agreement pursuant to which the holders of the Founder Shares, Private Units and the securities comprising the Private Units, and any Private Units that may be issued upon conversion of Working Capital Loans are entitled to certain registration rights with respect to such securities and certain other securities acquired prior to the consummation of the Company’s initial Business Combination.
18
Pursuant to the registration rights agreement and assuming the $1,500,000 of Working Capital Loans are converted into 150,000 Private Units, the Company will be obligated to register up to 6,012,919 ordinary shares and 620,000 Private Placement Rights. The number of ordinary shares includes (i) 4,918,919 outstanding ordinary shares issued as Founder Shares, (ii) 470,000 ordinary shares included in the Private Units, (iii) 94,000 ordinary shares to be issued upon conversion of Private Placement Rights included in the Private Units, (iv) 150,000 ordinary shares comprising part of the Private Units issued upon conversion of Working Capital Loans, (v) 30,000 ordinary shares to be issued upon conversion of Private Placement Rights as part of the working capital units upon conversion of Working Capital Loans and (vi) 350,000 representative shares. The number of Private Placement Rights includes 470,000 Private Placement Rights as part of the Private Units and 150,000 Private Placement Rights as part of the working capital units upon the conversion of Working Capital Loans.
The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the Initial Public Offering.
Promissory Notes - Related Party
On August 20, 2025, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Promissory Note”). On January 25, 2026, the Company and the Sponsor amended the promissory note to increase the facility to $2,000,000. This loan is non-interest bearing and payable on the earlier of December 31, 2026 or the date on which Company consummates an initial public offering of its securities. On May 14, 2026 upon the closing of the Initial Public Offering, the Company paid the entire outstanding balance under the Promissory Note.
Underwriting Agreement
Pursuant to the underwriting agreement, the Sponsor and the executive officers and directors have agreed that, for a period of 180 days from the date of the Initial Public Offering, will not, without the prior written consent of the representative, offer, sell, contract to sell, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or share right to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any units, share rights, ordinary shares or any other securities convertible into, or exercisable or exchangeable for, any units, ordinary shares, Founder Shares or share rights, subject to certain exceptions. The representative in its discretion may release any of the securities subject to these lock-up agreements at any time without notice, other than in the case of the officers and directors, which shall be with notice. The Sponsor, officers and directors are also subject to separate transfer restrictions on their Founder Shares and private placement shares pursuant to the letter agreement described herein.
The Company granted the underwriters a 45-day option from the date of the Initial Public Offering to purchase up to 1,875,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions.
The underwriters were entitled to a cash underwriting discount of 1.25% of the gross proceeds of the units offered in the Initial Public Offering, or $1,562,500 in the aggregate (or $1,796,875 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable to the underwriters upon the closing of this offering.
Subsequent to the Initial Public Offering that occurred on May 14, 2026, the underwriter partially exercised the over-allotment option for the purchase of an additional 1,500,000 Units and the underwriter was entitled to a cash underwriting discount of $187,500. The unexercised over-allotment option for the remaining 375,000 Units was forfeited.
Advisory Services Agreement
In connection with the Company’s Initial Public Offering, the Company and its Sponsor entered into an engagement with advisors (the “Advisors”) to provide strategic legal and advisory services in connection with the IPO.
Pursuant to the engagement, the Advisors are entitled to receive cash fees consisting of (i) a one-time payment of $800,000 payable upon the closing of the IPO and (ii) quarterly payments of $350,000 for four consecutive quarters, totaling $1,400,000, with the first payment due at the closing of the IPO and the remaining payments due at the end of each of the three subsequent fiscal quarters.
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In addition, at the closing of the IPO, the Sponsor agreed to transfer to the Advisors 100,000 Founder Shares with an aggregate target value of $1,000,000, determined based on the IPO valuation of such Founder Shares. To the extent the aggregate value of the Founder Shares transferred is less than $1,000,000, the shortfall is payable in cash or additional shares.
Critical Accounting Estimates
The preparation of unaudited financial statements 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 unaudited financial statements, and income and expenses during the period 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 unaudited financial statements, which Management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could materially differ from those estimates. As of June 30, 2026, we did not have any critical accounting estimates to be disclosed.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
This item is not applicable as we are a smaller reporting company.
Item 4. Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under Securities Exchange Act of 1934, as amended (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 our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2026. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective due to the existence of material weaknesses in our internal control over financial reporting.
Material Weakness Over Financial Reporting
The Company identified that internal controls were ineffective and that a material weakness exists in its internal control over financial reporting related to reviewing service contracts with vendors to identify the counterparty and determine if an obligation exists and is owed to vendors. As a result of the inadequate controls surrounding contract review, the Company inappropriately recorded an obligation that did not exist and disbursed cash under that related obligation. Management is in the process of implementing remediation procedures to address the control deficiency that led to the material weakness. The remediation plan includes, but is not limited to, the implementation of additional review procedures of executed contracts to identify the counterparty and determine if certain terms or provisions result in the existence of an obligation.
Changes in Internal Control Over Financial Reporting
Other than the changes intended to remediate the material weaknesses as discussed above, there has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our final prospectus for our Initial Public Offering filed with the SEC on May 14, 2026. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our final prospectus for our Initial Public Offering filed with the SEC on May 14, 2026.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The registration statement for the Company’s Initial Public Offering was declared effective on May 12, 2026. On May 14, 2026, the Company consummated the Initial Public Offering of 12,500,000 units generating gross proceeds of $125,000,000.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 447,500 Private Units at a price of $10.00 per Private Unit, generating gross proceeds of $4,475,000.
On May 15, 2026, the Underwriter partially exercised its over-allotment option for an additional 1,500,000 Public Units at a price of $10.00 per Unit or $15,000,000. In conjunction with the Underwriter’s partial exercise of the over-allotment option, the Sponsor purchased an additional 22,500 Private Placement Units for $225,000.
Following the closing of the Initial Public Offering, the sale of the Private Units, and the over-allotment shares, an amount of $140,350,000 ($10.025 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering, the sale of the Private Units and the over-allotment units was placed in a trust account.
Transaction costs related to the issuances described above amounted to $2,698,154, consisting of $1,750,000 of cash underwriting fees, $472,654 of other offering costs, $325,500 of Representative Shares and $150,000 of Underwriters’ reimbursement. In addition, as of June 30, 2026, $130,963 of cash and cash equivalents was held by the Company outside of the Trust Account and is available for working capital purposes.
For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Quarterly Report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| Exhibit No. | Description | |
| 31.1* | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1* | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the XBRL document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101 |
| * | Filed herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Breeze Acquisition Corp. II | |||
| Date: October 16, 2026 | By: | /s/ J. Douglas Ramsey | |
| Name: | J. Douglas Ramsey | ||
| Title: | Chief Executive Officer and Chief Financial Officer | ||
| (Principal Executive Officer, Principal Financial and Accounting Officer) | |||
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