References to the “Company,” “our,”
“us” or “we” refer to Cantor Equity Partners II, Inc. The following discussion and analysis of the Company’s
financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements
and the notes thereto contained elsewhere in this Report (as defined below). Certain information contained in the discussion and analysis
set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking
Statements
This Quarterly Report on Form 10-Q (this “Report”)
includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on
our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks,
uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.
In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,”
“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”
“continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to,
possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements
of historical fact included in this Form 10-Q. Factors that might cause or contribute to such a discrepancy include, but are not limited
to, those described in our other Securities and Exchange Commission (“SEC”) filings.
Overview
We are a blank check company incorporated in
the Cayman Islands on November 11, 2020 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization
or similar business combination with one or more businesses (the “Business Combination”). Our sponsor is Cantor EP Holdings
II, LLC (the “Sponsor”).
Although we are not limited in our search for
target businesses to a particular industry or sector for the purpose of consummating the Business Combination, we focused our search
on companies operating in the financial services, digital assets, healthcare, real estate services, technology and software industries.
We are an early stage and emerging growth company and, as such, we are subject to all of the risks associated with early stage and emerging
growth companies.
Our registration statements for our initial public
offering (the “Initial Public Offering”) became effective on May 1, 2025. On May 5, 2025, we consummated the Initial Public
Offering of 24,000,000 Class A ordinary shares, par value $0.0001 per share (“Class A ordinary shares” and such Class A ordinary
shares issued in the Initial Public Offering, the “Public Shares”), at a purchase price of $10.00 per share, generating gross
proceeds of $240,000,000.
Simultaneously with the closing of the Initial
Public Offering, we consummated the sale of 580,000 Class A ordinary shares (the “Private Placement Shares”), to the Sponsor,
at a purchase price of $10.00 per share, in a private placement (the “Private Placement”), generating gross proceeds of $5,800,000.
Following the closing of the Initial Public Offering
and the Private Placement on May 5, 2025, an amount of $240,000,000 ($10.00 per share) from the net proceeds of the Initial Public Offering
and the Private Placement was placed in a trust account (the “Trust Account”) located in the United States with Continental
Stock Transfer & Trust Company (“Continental”) acting as trustee. The funds in the Trust Account were initially
held in an account at J.P. Morgan Chase Bank, N.A., and on May 6, 2025, were transferred to an account at CF Secured, LLC (“CF
Secured”), an affiliate of the Sponsor. The Trust Account may be invested only in U.S. government securities, within the meaning
set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity
of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by us meeting the conditions
of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, or held as cash or cash items (including in demand
deposit accounts) at a bank as determined by us, until the earlier of: (i) the completion of the Business Combination or (ii) the distribution
of the Trust Account, as described below.
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We have until May 5, 2027 (24 months from the
closing of the Initial Public Offering), or until such earlier liquidation date as our board of directors may approve or such later date
as our shareholders may approve pursuant to our amended and restated memorandum and articles of association (as may be amended, the “Amended
and Restated Memorandum and Articles”) (the “Combination Period”), to consummate the Business Combination. If we are
unable to complete the Business Combination by the end of the Combination Period, we will (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a
per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the
funds held in the Trust Account and not previously released to us to pay taxes, divided by the number of then outstanding Public Shares,
which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further
liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject, in each case, to our
obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
On January 24, 2024, the SEC adopted the
new rules and regulations for special purpose acquisition companies (“SPACs”), which became effective on July 1, 2024
(the “2024 SPAC Rules”). The 2024 SPAC Rules require, among other matters, (i) additional disclosures relating to SPAC
business combination transactions; (ii) additional disclosures relating to dilution and to conflicts of interest involving sponsors
and their affiliates in both SPAC initial public offerings and business combination transactions; (iii) additional disclosures regarding
projections included in SEC filings in connection with proposed business combination transactions; and (iv) the requirement that
both the SPAC and its target company be co-registrants for business combination registration statements. In addition, the SEC’s
adopting release provided guidance describing circumstances in which a SPAC could become subject to regulation under the Investment Company
Act, including its duration, asset composition, business purpose, and the activities of the SPAC and its management team in furtherance
of such goals. The 2024 SPAC Rules may materially affect our ability to negotiate and complete the Business Combination and may increase
the costs and time related thereto.
In March 2024, the SEC adopted final rules relating
to The Enhancement and Standardization of Climate-Related Disclosures for Investors, that would require registrants to provide
climate-related disclosures in registration statements and certain periodic reports. The final rules set forth requirements for disclosure
of material climate-related risks, mitigation activities, targets and goals, and governance. The rules also require disclosure of certain
greenhouse gas emissions metrics and attestation of emissions disclosures. Subsequent to the issuance of the final rules, in April 2024,
the SEC has released an order staying the final rules pending judicial review of all of the petitions challenging the rules and in March
2025, the SEC voted to end its defense of the rules. We are continuing to monitor the developments pertaining to the rules. However,
if these reporting requirements are implemented following the completion of judicial review, they may significantly increase the complexity
of our periodic reporting as a U.S. public company.
On October 27, 2025, we entered into a business
combination agreement (the “Business Combination Agreement”), with Securitize, Inc., a Delaware corporation (“Securitize”),
Securitize Holdings, Inc., a Delaware corporation (“Pubco”), Pinecrest Merger Sub, a Cayman Islands exempted company and
a wholly-owned subsidiary of Pubco (“CEPT Merger Sub”), and Senna Merger Sub, Inc., a Delaware corporation and our wholly-owned
subsidiary (“Securitize Merger Sub”).
Pursuant to the Business Combination Agreement,
and subject to the terms and conditions set forth therein, upon the consummation of the transactions contemplated thereby (the “Closing”
and the date of the Closing, the “Closing Date”), (a) we will merge with and into CEPT Merger Sub, with CEPT Merger Sub continuing
as the surviving entity (the “CEPT Merger”), in accordance with which (i) our shareholders holding Class B ordinary
shares, par value $0.0001 per share (“Class B ordinary shares”). will receive one Class A ordinary share in exchange
for each Class B ordinary share held by such shareholder immediately prior to the CEPT Merger (other than certain Class B ordinary
shares surrendered by the Sponsor) and (ii) immediately thereafter, each Class A ordinary share will be cancelled and cease to exist,
in exchange for the right of our shareholders holding Class A ordinary shares to receive one share of common stock, par value $0.0001
per share, of Pubco (“Pubco Common Stock”), for each Class A ordinary share held by such shareholder at the time of
the CEPT Merger (other than any Public Shares which are the subject of valid redemption requests and any treasury shares), and (b) at
least two hours after the CEPT Merger, Securitize Merger Sub will merge with and into Securitize, with Securitize continuing as the surviving
entity (the “Securitize Merger” and, together with the CEPT Merger, the “Mergers”), in accordance with which
the holders (the “Securitize Stockholders”) of common stock of Securitize (“Securitize Common Stock”) will receive
a number of shares of Pubco Common Stock in exchange for their shares of Securitize Common Stock as determined in accordance with the
Business Combination Agreement. As a result of the Mergers and the other transactions contemplated by the Business Combination Agreement
(the “Securitize Business Combination”), CEPT Merger Sub and Securitize will become wholly-owned subsidiaries of Pubco and
Pubco will become a publicly traded company, all upon the terms and subject to the conditions set forth in the Business Combination Agreement
and in accordance with applicable law.
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Contemporaneously with the execution of the Business
Combination Agreement, we, Pubco and Securitize entered into subscription agreements (the “PIPE Subscription Agreements”)
with certain investors (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to purchase, in a private placement
immediately prior to the CEPT Merger, 22,500,000 Class A ordinary shares (the “PIPE Shares”), at a purchase price of $10.00
per share payable in cash, for an aggregate purchase price of $225,000,000 (the “PIPE Investment”). PIPE Investors are permitted
under the PIPE Subscription Agreements to satisfy their commitments thereunder through the purchase of Class A ordinary shares in the
public market, subject to certain restrictions set forth therein.
Contemporaneously with the execution of the Business
Combination Agreement, we, Pubco, Securitize and the Sponsor entered into the Sponsor Support Agreement, dated as of October 27, 2025
(the “Sponsor Support Agreement”), pursuant to which, among other things, the Sponsor agreed (i) to vote its Class A ordinary
shares and Class B ordinary shares in favor of the Business Combination Agreement and the Securitize Business Combination and each of
the other proposals to be presented to our shareholders at the extraordinary general meeting of our shareholders to be held in connection
with the Securitize Business Combination, (ii) to vote its Class A ordinary shares and Class B ordinary shares against certain other
transactions and matters, (iii) to waive the anti-dilution rights of the Class B ordinary shares set forth in the Amended and Restated
Memorandum and Articles, (iv) to comply with the restrictions imposed by the letter agreement, dated as of May 2, 2025, by and among
us, the Sponsor and the other parties thereto (the “Insider Letter”), including the restrictions on transferring and redeeming
Class A ordinary shares and Class B ordinary shares in connection with the Securitize Business Combination, (v) to surrender, for no
consideration, up to 30% of its Founder Shares (as defined below) immediately prior to, and conditioned upon, the consummation of the
CEPT Merger (such number of surrendered Founder Shares to be determined pursuant to a formula taking into account the number of shares
redeemed by our shareholders in the Securitize Business Combination and the gross proceeds from the PIPE Investment exceeding $100,000,000),
(vi) that the shares of Pubco Common Stock received by the Sponsor in exchange for its Founder Shares (other than any surrendered shares)
(any such remaining shares, the “Post-Combination Founder Shares”) will be subject to a six month lock-up, subject to early
release, and (vii) to subject up to 30% of its Post-Combination Founder Shares to forfeiture and vesting based on an earn-out during
the five year period after the Closing on the terms and conditions set forth in the Sponsor Support Agreement.
Certain of our existing agreements will be amended
or amended and restated in connection with the Securitize Business Combination.
For more information regarding the Securitize
Business Combination, refer to our filings with the SEC, including the Current Reports on Form 8-K filed by us with the SEC on October
28, 2025, October 30, 2025 and November 13, 2025, Pubco’s Registration Statement on Form S-4 (File No. 333-293022) initially filed
with the SEC on January 28, 2026 (as amended from time to time), and the other filings we and Pubco may make from time to time with the
SEC.
Liquidity and Capital Resources
As of both March 31, 2026 and December 31, 2025,
we had $25,000 of cash in our operating account. As of March 31, 2026 and December 31, 2025, we had a working capital deficit of approximately
$2,916,000 and approximately $1,472,000, respectively. As of March 31, 2026 and December 31, 2025, approximately $8,753,000 and approximately
$6,617,000, respectively, of the amount earned on funds held in the Trust Account was available to pay taxes, if any.
Our liquidity needs through March 31, 2026 have
been satisfied through a contribution of $25,000 from the Sponsor in exchange for the issuance of the Class B ordinary shares (the “Founder
Shares”), a loan of approximately $160,000 from the Sponsor pursuant to a promissory note (the “Pre-IPO Note”), the
proceeds from the consummation of the Private Placement with the Sponsor not held in the Trust Account and the Sponsor Loan (as defined
below). We fully repaid the Pre-IPO Note upon completion of the Initial Public Offering. In addition, in order to finance transaction
costs in connection with a Business Combination, the Sponsor has committed to loan us up to $1,750,000 to fund our expenses relating
to investigating and selecting a target business and other working capital requirements (the “Sponsor Loan”), of which approximately
$605,000 and approximately $397,000 has been drawn by us as of March 31, 2026 and December 31, 2025, respectively.
If the Sponsor Loan is insufficient, the Sponsor
or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, provide us additional loans (“Working
Capital Loans”). As of both March 31, 2026 and December 31, 2025, we did not have any borrowings under the Working Capital Loans.
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Based on the foregoing, management believes that
we will have sufficient working capital and borrowing capacity from the Sponsor to meet our needs through the earlier of the consummation
of the Business Combination or one year from the date of this Report. Over this time period, we will be using these funds for paying
existing accounts payable and consummating the Securitize Business Combination.
Results of Operations
Our entire activity from inception through March
31, 2026 related to our formation, the Initial Public Offering and to our efforts toward locating and completing a suitable Business
Combination. We have neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues
until after completion of the Business Combination. We have generated non-operating income in the form of interest income on amounts
held in the Trust Account. We have incurred, and expect to incur, increased 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 months ended March 31, 2026, we
had net income of approximately $2,396,000, which consisted of approximately $2,252,000 of interest income on investments held in the
Trust Account and approximately $1,625,000 of income from the change in fair value of forward sale securities, partially offset by approximately
$1,451,000 of general and administrative expenses, and $30,000 of administrative expenses incurred pursuant to the administrative services
agreement with the Sponsor.
For the three months ended March 31, 2025, we
had a net loss of approximately $27,000, which resulted from approximately $27,000 of general and administrative expenses.
Factors That May Adversely Affect Our Results of Operations
Our results of operations and our ability to
complete the Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in
the financial markets, many of which are beyond our control. Our results of operations and our ability to consummate the Business Combination
could be impacted by, among other things, downturns in the financial markets or in economic conditions, fluctuations in interest rates,
and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. We cannot at this time predict the likelihood
of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our
ability to complete the Business Combination.
Contractual Obligations
Business Combination Marketing Agreement
We engaged Cantor Fitzgerald & Co. (“CF&Co.”),
an affiliate of the Sponsor, pursuant to the business combination marketing agreement as an advisor in connection with the Business Combination
to assist us in holding meetings with our shareholders to discuss the potential Business Combination and the target business’ attributes,
introduce us to potential investors that are interested in purchasing our securities and assist us with our press releases and public
filings in connection with the Business Combination. We will pay CF&Co. a cash fee of $8,400,000 for such services upon the consummation
of the Business Combination.
Related Party Loans
In connection with the Initial Public Offering,
the Sponsor has agreed to lend us up to $3,600,000 pursuant to a promissory note (the “Sponsor Note”) in connection with
the consummation of the Business Combination, an extension of time for us to consummate the Business Combination or our liquidation (each,
a “Redemption Event”), such that an amount equal to $0.15 per Public Share being redeemed in connection with the applicable
Redemption Event will be added to the Trust Account and paid to the holders of the applicable redeemed Public Shares on such Redemption
Event. The Sponsor Note does not bear interest and is repayable by us to the Sponsor upon consummation of the Business Combination; provided
that, at any time beginning 60 days after the date of the Initial Public Offering, at the Sponsor’s option, all or any portion
of the amount outstanding under the Sponsor Note may be converted into Class A ordinary shares at a conversion price of $10.00 per share.
If we are unable to consummate the Business Combination, the Sponsor Note would be repaid only out of funds held outside of the Trust
Account. The Sponsor has waived any claims against the Trust Account in connection with the Sponsor Note.
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In order to finance transaction costs in connection
with the Business Combination, the Sponsor has committed up to $1,750,000 in the Sponsor Loan to be provided to us to fund expenses relating
to investigating and selecting a target business and other working capital requirements, including $10,000 per month for office space,
administrative and shared personnel support services that will be paid to the Sponsor. The Sponsor Loan does not bear interest and is
repayable by us to the Sponsor upon consummation of the Business Combination; provided that, at any time beginning 60 days after the
date of the Initial Public Offering, at the Sponsor’s option, all or any portion of the amount outstanding under the Sponsor Loan
may be converted into Class A ordinary shares at a conversion price of $10.00 per share. Otherwise, the Sponsor Loan would be repaid
only out of funds held outside the Trust Account. If the Sponsor Loan is insufficient, the Sponsor or an affiliate of the Sponsor, or
certain of our officers and directors may, but are not obligated to, provide us Working Capital Loans.
As of March 31, 2026 and December 31, 2025, we
had approximately $605,000 and approximately $397,000, respectively, outstanding under the Sponsor Loan. As of both March 31, 2026 and
December 31, 2025, we had no borrowings under the Working Capital Loans or the Sponsor Note.
See Note 4—“Related Party Transactions”
and Note 5—“Commitments and Contingencies” to our unaudited condensed consolidated financial statements in Part I,
Item 1 of this Report for information regarding additional contractual obligations.
Critical Accounting Policies and Estimates
We have identified the following as our critical accounting policies:
Use of Estimates
The preparation of our financial statements and
related disclosures 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, income and expenses, and the disclosure of
contingent assets and liabilities, in our 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 consolidated
balance sheets, unaudited condensed consolidated statements of operations, unaudited condensed consolidated statements of comprehensive
income (loss), unaudited condensed consolidated statements of shareholders’ deficit and unaudited condensed consolidated statements
of cash flows could be materially affected. We believe that the following accounting policies involve a higher degree of judgment and
complexity.
Going Concern
In connection with our going concern considerations
in accordance with guidance in Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements–Going
Concern, we have until May 5, 2027 to consummate the Business Combination. Our mandatory liquidation date if the Business Combination
is not consummated raises substantial doubt about our ability to continue as a going concern. Our unaudited condensed consolidated financial
statements included in this Report do not include any adjustments related to the recovery of the recorded assets or the classification
of the liabilities should we be unable to continue as a going concern. In the event of a mandatory liquidation, within ten business days,
we will redeem the Public Shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account,
including interest earned on the funds held in the Trust Account and not previously released to us to pay taxes, if any, and including
$0.15 per redeemed share to be funded pursuant to the Sponsor Note, divided by the number of then outstanding Public Shares. As of March
31, 2026 and December 31, 2025, the redemption value per Public Share was $10.51 and $10.43, respectively.
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Emerging Growth Company
Section 102(b)(1) of the Jumpstart Our Business
Startups Act of 2012 (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 registration statement under the Securities
Act of 1933, as amended (the “Securities Act”) 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. We have 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, we, 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 our unaudited
condensed consolidated financial statements with another public company, which is neither an emerging growth company nor an emerging
growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences
in accounting standard used.
Forward Sale Securities
We account for the Class
A ordinary shares underlying the PIPE Subscription Agreements, which are referred in this Report as forward sale securities, in accordance
with guidance in ASC 815-40, Derivatives and Hedging–Contracts in Entity’s Own Equity, pursuant to which the
forward sale securities do not meet the criteria for equity classification and must be recorded as liabilities or assets.
Class A Ordinary Shares Subject to Possible Redemption
We account for the Class A ordinary shares subject
to possible redemption in accordance with the guidance in ASC 480, Distinguishing Liabilities from Equity. Class A ordinary shares
subject to mandatory redemption (if any) are classified as liability instruments and measured at fair value. Shares of conditionally
redeemable Class A ordinary shares (including Class A 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 our control) are classified as temporary
equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. All of the Public Shares feature certain
redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly,
as of both March 31, 2026 and December 31, 2025, 24,000,000 Class A ordinary shares subject to possible redemption are presented as temporary
equity outside of the shareholders’ deficit section of our consolidated balance sheets. We recognize any subsequent changes in
redemption value immediately as they occur and adjust the carrying value of redeemable Class A ordinary shares to the redemption value
at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, we recognized the accretion from initial
book value to redemption amount value of redeemable Class A ordinary shares. This method would view the end of the reporting period as
if it were also the redemption date for the security. The change in the carrying value of redeemable Class A ordinary shares also resulted
in charges against Additional paid-in capital and Accumulated deficit.
Net Income (Loss) Per Ordinary Share
We comply with the accounting and disclosure
requirements of ASC 260, Earnings Per Share. Net income (loss) per ordinary share is computed by dividing net income (loss) applicable
to shareholders by the weighted average number of ordinary shares outstanding for the applicable periods. We apply the two-class method
in calculating earnings per share and allocate net income (loss) pro rata to Class A ordinary shares subject to possible redemption,
nonredeemable Class A ordinary shares and Class B ordinary shares. Accretion associated with the redeemable Class A ordinary shares is
excluded from earnings per share as the redemption value is not in excess of the fair value.
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See Note 2—“Summary of Significant
Accounting Policies” to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Report for additional
information regarding these critical accounting policies and other significant accounting policies.
Off-Balance Sheet Arrangements and Contractual Obligations
As of March 31, 2026, we did not have any off-balance sheet arrangements
as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.