KFII 10-K & 10-Q changes, risk factors and insider trading

As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. However, for detailed descriptions of the risks relating to our Company, see the section titled “Risk Factors” contained in our (i) IPO Registration Statement, (ii) 2025 Annual Report and (iii) 2025 First Quarter Form 10-Q, 2025 Second Quarter Form 10-Q and 20252026 SecondFirst Quarter Form 10-Q. As of the date of this Report, there have been no material changes with respect to those risk factors, other than as set forth below.factors. Any of these previously disclosed risk factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks not presently known to us or that we currently deem immaterial may also affect our ability to consummate an initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

Following the closing of the Initial Public Offering and Private Placement, an amount of $288,937,500 from the net proceeds of the Initial Public Offering and the Private Placement was initially placed in the Trust Account located in the United States with Continental acting as trustee. Pursuant to the Trust Agreement, the Trust Account may be invested only (i) in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act with a maturity of 185 days or less, (ii) in any open-ended investment company that holds itself out as a money market fund selected by us meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, (iii) as uninvested cash or (iv) in an interest or non-interest bearing demand deposit accountsaccount at a U.S. chartered commercial bank with consolidated assets of $100 billion or more selected by Continental that is reasonably satisfactory to us, until the earlier of: (x) the completion of the Business Combination and (y) the distribution of the Trust Account, as described below.

We have neither engaged in any operations nor generated any revenues to date. Our only activities since July 2, 2024 (inception) through MarchJune 31,30, 2026 have been (i) organizational activities and (ii) activities relating to (x) the Initial Public Offering and (y) identifying and evaluating prospective acquisition candidates and activities in connection with the initial Business Combination. We will not generate any operating revenues until after completion of our initial Business Combination. We have generated non-operating income in the form of interest income on investments held in the Trust Account after the Initial Public Offering. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance, among other things), as well as for due diligence expenses.

For the three months ended MarchJune 31,30, 2026, we had had a net income of $2,403,751,$2,483,913, which consists of income on cash and securities held in the Trust Account of $2,636,791,$2,677,671 and bank account interest of $1,053, offset by loss from operations of $233,040.$194,811.

For the three months ended MarchJune 31,30, 2025, we had had a net income of $1,601,840,$2,914,691, which consists of income on cash and securitiesinvestments held in the Trust Account of $1,792,415,$3,091,950, offset by loss from operations of $190,575.$177,259.

Following the Initial Public Offering, including the full exercise of the Over-Allotment Option, and the Private Placement, a total of $288,937,500 was initially placed in the Trust Account. We We incurred fees of $16,427,868 in the Initial Public Offering, consisting of $15,812,500 of cash underwriting feefee, the Deferred Underwriting Fee of $10,062,500 and $615,368 of other offering costs.

For the threesix months ended MarchJune 31,30, 2026, cash used used in operating activities was $278,286.$410,363. Net income of $2,403,751$4,887,664 was affected by interest earned on cash and securities held in the Trust Trust Account of $2,636,791.$5,314,462. Changes in operating assets and liabilities usedprovided $45,246$16,435 of cash for operating activities.

For the threesix months ended MarchJune 31,30, 2025, cash used used in operating activities was $391,993.$590,306. Net income of $1,601,840$4,516,531 was affected by interest earned on cash and securitiesinvestments held in the Trust Account of $1,792,415$4,884,365 and payment of operation costs through promissorythe noteIPO Promissory Note of $48,000. Changes in operating assets and liabilities used used $249,418$270,472 of cash for operating activities.

As of MarchJune 31,30, 2026, we had marketable securities held in the Trust Account of $302,512,950$305,190,621 (including approximately $13,575,450$16,253,121 of interest income). We may withdraw interest from the Trust Account to pay taxes, if any. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (which interest shall be net of any taxes payable, and exclude the Deferred Underwriting Fee), to complete our Business Combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our 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.

As of MarchJune 31,30, 2026, we had cash held outside of the Trust Account of approximately $224,160.$92,083. We use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants, or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us Working Capital Loans, as may be required. If we complete a Business Combination, we intend to repay such Working Capital Loans. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such Working Capital Loans, but no proceeds from our Trust Account will be used for such repayment. Up to $1,500,000 of such Working Capital Loans may be converted into units of the post-Business Combination entity at a price of $10.00 per unit. TheSuch units (and underlying securities) would be identical to the Private Placement Units (and underlying securities). As of MarchJune 31,30, 2026 and December 31, 2025, we did not have any borrowings under any Working Capital Loans.

Commencing on February 6, 2025 and until the completion of our Business Combination or liquidation, we reimburse the Sponsor $25,000 per month for office space, utilities, and secretarial and administrative support pursuant to the Administrative Services Agreement. AsFor the three and six months ended June 30, 2026, we incurred and paid $75,000 and $150,000 of Marchadministrative 31,services 2026fees, respectively, pursuant to the Administrative Services Agreement. For the three and six months ended June 30, 2025, we incurred and paid $75,000 and $50,000, $125,000 of administrative services fees, respectively, inpursuant to feesthe forAdministrative theseServices services.Agreement.

The preparation of the unaudited condensed financial statements and notes thereto included in this Report under Item 1. “Financial Statements” in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and the disclosure of contingent assets and liabilities, in our unaudited condensed financial statements. These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of estimation. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments, and we evaluate these estimates on an ongoing basis. To the extent actual experience differs from the assumptions used, our unaudited condensed financial statements and notes thereto included in this Report under Item 1. “Financial Statements” could be materially affected. We believe that the following accounting policies involve a higher degree of judgment and complexity. As of MarchJune 31,30, 2026, we did not have any critical accounting estimates to be disclosed.