FG Merger II Corp. Announces \$3.5 Billion Merger with Boxabl Inc.: Key Details for Investors
Key Points from the Annual Financial Report & Merger Announcement
- FG Merger II Corp. (FGMC) is a blank check company formed for mergers, particularly targeting the financial services industry.
- FGMC recently completed its IPO in January 2025, raising \$80 million and placing over \$80.8 million into a trust account for future business combinations.
- On August 4, 2025, FGMC entered into a definitive Merger Agreement with Boxabl Inc. The deal values Boxabl at \$3.5 billion, to be paid in a combination of preferred and common shares of FGMC at a deemed value of \$10 per share.
- There is no minimum cash requirement for the closing of the merger.
- The closing is subject to shareholder approval, regulatory clearances, and other customary conditions. The initial agreement end date was December 31, 2025, but was extended to March 31, 2026.
- Combined company will be renamed Boxabl Inc. and remain listed on Nasdaq or NYSE.
Financial Highlights (2025 vs. 2024)
- Net Income: \$1,426,980 for 2025, compared to a loss of \$25,850 in 2024, driven by interest income from trust investments.
- Operating Expenses: Rose sharply to \$972,161 in 2025 from \$25,850 in 2024, reflecting increased activity post-IPO.
- Trust Account: \$82,136,888 held in trust as of December 31, 2025, invested in U.S. Treasury-focused money market funds.
- Cash & Equivalents: \$486,900 at year-end 2025, up from \$46,285 in 2024.
- Common Shares: 8,000,000 subject to possible redemption; 2,295,800 non-redeemable outstanding.
Merger Structure and Terms
- The merger is structured as a two-step process: FGMC’s subsidiary will first merge with Boxabl, making Boxabl a wholly-owned subsidiary, which will then merge into FGMC. The surviving public entity will be named Boxabl Inc.
- Aggregate Consideration: Boxabl shareholders will receive a mix of preferred and common shares valued at \$3.5 billion (at \$10/share).
- The transaction does not require a minimum cash closing condition, which may allow flexibility but could also present liquidity risks post-merger.
- Shareholder and regulatory approvals, as well as effective SEC registration and antitrust clearance, are required before closing.
- Termination rights allow either party to abandon the deal if closing does not occur by March 31, 2026, or if approvals are not obtained or material breaches occur.
- Both sides have entered into support and lock-up agreements, restricting certain share transfers after closing and committing to vote in favor of the transaction.
Shareholder and Price-Sensitive Considerations
- Potential Share Dilution: Post-merger, existing FGMC shareholders will see significant dilution as \$3.5 billion in new shares are issued to Boxabl shareholders.
- Uncertainty Over Cash Position: With no minimum cash closing, the actual cash held by the combined company at merger completion could be lower than the trust account balance, depending on redemptions.
- Earnings Impact: Current net income is derived from interest income on trust funds; post-merger, the financial profile will shift to reflect Boxabl’s operating results.
- Warrants and Rights: 1,000,000 “\$15 Private Warrants” (exercisable at \$15/share for 10 years post-merger, non-redeemable, cashless exercise allowed), and public and private rights convertible to fractional shares, may add further dilution.
- Redemption Risk: Public shareholders can redeem their shares for their pro-rata share of the trust account at the time of the merger vote, potentially reducing the cash available to the company.
- Downside Risk: If the merger does not close by March 31, 2026, FGMC will be liquidated and public shareholders will receive a pro-rata trust account distribution. Warrants will expire worthless if no business combination occurs.
- Price Sensitivity: Any updates or changes to the merger agreement, shareholder redemption levels, or failure to secure approvals could significantly impact the share price.
Other Notable Details
- The sponsor and key insiders have agreed to certain transfer and lock-up restrictions on their founder shares, private units, and warrants, aligning their interests with long-term performance of the combined company.
- FGMC is subject to a 24-month deadline (from IPO closing) to complete a business combination, or else will liquidate and return trust funds to public shareholders, less certain permitted expenses.
- Underwriting and advisory fees tied to the IPO and merger completion total over \$3 million, payable only on successful business combination.
Conclusion
The proposed \$3.5 billion merger between FGMC and Boxabl is a transformative event that will dramatically affect the company’s capital structure, shareholder base, and future financial profile. Investors should closely monitor further announcements regarding regulatory and shareholder approvals, redemption rates, and financial disclosures from Boxabl, as these factors are likely to have a significant impact on FGMC’s share value.
Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions. The information is derived from company filings and may be subject to change without notice.
