Dynamix Corporation(DYNX) - 2025 Q1 - Quarterly Report

Part I. Financial Information This section provides an overview of the financial information for the reporting period Item 1. Financial Statements This section presents the unaudited condensed financial statements of Dynamix Corporation for the quarter ended March 31, 2025, including the balance sheets, statement of operations, statement of changes in shareholders' deficit, and statement of cash flows, along with detailed notes explaining significant accounting policies, initial public offering details, related party transactions, commitments, and fair value measurements Condensed Balance Sheets | Metric | March 31, 2025 | December 31, 2024 | | :----------------------------------- | :------------- | :---------------- | | Total Assets | $170,136,163 | $168,710,028 | | Investments held in Trust Account | $168,724,276 | $167,164,825 | | Total Liabilities | $9,538,464 | $9,144,979 | | Shareholders' Deficit | $(8,126,577) | $(7,599,776) | Condensed Statement of Operations | Metric | Three Months Ended March 31, 2025 | | :------------------------------------------ | :-------------------------------- | | General and administrative expenses | $584,643 | | Loss from operations | $(584,643) | | Change in fair value of warrant liabilities | $(209,160) | | Interest earned on cash account | $12,716 | | Dividends earned on investments held in Trust Account | $1,749,366 | | Change in fair value – over-allotment liability | $64,371 | | Total other income, net | $1,617,293 | | Net income | $1,032,650 | | Basic and diluted net income per redeemable Class A ordinary share | $0.05 | | Basic and diluted net income per non-redeemable Class B ordinary share | $0.05 | Condensed Statement of Changes in Shareholders' Deficit | Item | Amount | | :------------------------------------------ | :------------- | | Balance — December 31, 2024 | $(7,599,776) | | Accretion of redeemable Class A ordinary shares to redemption amount | $(1,559,451) | | Forfeiture of Founder Shares | $0 | | Net income | $1,032,650 | | Balance – March 31, 2025 | $(8,126,577) | Condensed Statement of Cash Flows | Cash Flow Item | Three Months Ended March 31, 2025 | | :------------------------------------------ | :-------------------------------- | | Net cash used in operating activities | $(504,051) | | Net cash provided by financing activities | $189,915 | | Net Change in Cash | $(314,136) | | Cash – Beginning of period | $1,543,566 | | Cash – End of period | $1,229,430 | Notes to Condensed Financial Statements These notes provide detailed explanations for the unaudited condensed financial statements, covering the company's nature as a blank check company, significant accounting policies, specifics of the Initial Public Offering and private placement, related party transactions, commitments, stockholders' deficit, fair value measurements, segment information, and subsequent events Description of Organization and Business Operations - Dynamix Corporation is a blank check company incorporated on June 13, 2024, for the purpose of effecting a business combination[22] - As of March 31, 2025, the Company had not commenced any operations and will not generate operating revenues until after its initial Business Combination[23] - The Initial Public Offering (IPO) was consummated on November 22, 2024, selling 16,600,000 units at $10.00 per unit, generating $166,000,000 gross proceeds[24] - Simultaneously with the IPO, 5,985,000 Private Placement Warrants were sold at $1.00 each, generating $5,985,000 gross proceeds[25] - $166,415,000 from the IPO and private placement proceeds was placed in a trust account, to be invested in U.S. government treasury obligations or money market funds[30] | Metric | Amount (March 31, 2025) | | :-------------------- | :---------------------- | | Operating bank account | $1,229,430 | | Working capital | $834,490 | - Management believes available funds will sustain operations for at least one year[40] Summary of Significant Accounting Policies - The unaudited condensed financial statements are prepared in accordance with GAAP for interim financial information, following Form 10-Q and Article 8 of Regulation S-X[42] - The Company is an "emerging growth company" and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[44][45] - Investments held in the Trust Account are classified as trading securities and presented at fair value, with gains and losses included in dividends earned on investments. As of March 31, 2025, these investments totaled $168,724,276[49] - Class A ordinary shares subject to possible redemption are classified as temporary equity outside of permanent equity, with changes in redemption value recognized immediately[59] Initial Public Offering - On November 22, 2024, the Company sold 16,600,000 Units at a purchase price of $10.00 per Unit, including the partial exercise of the underwriters' over-allotment option[66] | Warrant Type | Outstanding as of March 31, 2025 | | :-------------------------- | :------------------------------- | | Public Warrants | 8,300,000 | | Private Placement Warrants | 5,985,000 | | Total Warrants | 14,285,000 | - Public Warrant holders have a "Warrant Put Right" to require the Sponsor to repurchase their warrants at $0.65 per warrant upon the completion of the initial Business Combination[67] - The Company may redeem outstanding warrants at $0.01 per warrant if the closing price of Class A ordinary shares equals or exceeds $18.00 for any 20 trading days within a 30-trading day period, commencing at least 30 days after the initial business combination[72][80] Private Placement - Simultaneously with the IPO, 5,985,000 Private Placement Warrants were sold at $1.00 per warrant, totaling $5,985,000[76] - The Sponsor purchased 3,910,000 Private Placement Warrants, and the underwriters purchased 2,075,000 Private Placement Warrants[76] - Private Placement Warrants do not include the Warrant Put Right and have transfer restrictions until 30 days after the completion of the initial Business Combination[77] Related Party Transactions - The Sponsor initially received 5,750,000 founder shares. In January 2025, 216,667 founder shares were forfeited due to the unexercised over-allotment option[78][99] - Founder shares transferred to the vice president and director nominees are subject to service or performance conditions. No stock-based compensation expense has been recognized as of March 31, 2025, as a Business Combination is not yet considered probable[79][83] - A promissory note from the Sponsor for up to $300,000 was repaid in full ($105,274) on November 22, 2024[85] - The Company pays an affiliate of the Sponsor $30,000 per month for administrative services. For the three months ended March 31, 2025, $90,000 was incurred, and $20,000 was paid[86] Commitments - Ongoing geopolitical conflicts (Russia-Ukraine, Israel-Hamas) have created global economic consequences and could adversely affect the Company's search for an initial Business Combination[89][90] - Holders of founder shares, private placement warrants, and warrants from working capital loans have registration rights[91] - The underwriters partially exercised their over-allotment option for 1,600,000 Units, and the remaining option expired unused in January 2025. A deferred underwriting fee of $6,640,000 is payable upon the completion of the initial Business Combination[92][93] - An advisory services agreement was entered into on February 4, 2025, with Volta (an affiliate of the Sponsor) for management and advisory services, with an annual fee and reimbursements not exceeding 10% of interest earned on Trust Account funds. $189,915 was paid for the three months ended March 31, 2025[94][95] Stockholders' Deficit - The Company is authorized to issue 5,000,000 preference shares and 500,000,000 Class A ordinary shares, with none issued or outstanding (excluding 16,600,000 Class A shares subject to possible redemption)[97][98] - 5,533,333 Class B ordinary shares were issued and outstanding as of March 31, 2025, reduced from 5,750,000 due to the forfeiture of 216,667 founder shares in January 2025[99][100] - Founder shares (Class B) will automatically convert into Class A ordinary shares on a one-for-one basis upon or immediately following the initial Business Combination, subject to adjustment[101] - Holders of Class A and Class B ordinary shares are entitled to one vote per share. Prior to the Business Combination, only Class B holders vote on director appointments/removals and jurisdiction changes[102][103] Fair Value Measurements - The Company uses a fair value hierarchy (Level 1, 2, 3) to classify assets and liabilities based on observable and unobservable inputs[111] - Investments held in the Trust Account are valued using Level 1 inputs (quoted prices in active markets) and totaled $168,724,276 as of March 31, 2025[107] - The over-allotment option liability, classified as Level 3, was valued using a Black-Scholes model. It expired in January 2025, resulting in a fair value of $0 as of March 31, 2025[108][109][115] - The Public Warrants liability is measured at fair value on a recurring basis using Level 1 inputs (unadjusted quoted prices), totaling $2,367,160 as of March 31, 2025[107][114] Segment Information - The Company operates as a single operating segment, with the Chief Executive Officer (CODM) reviewing overall operating results[117] - Key metrics reviewed by the CODM include dividends earned on investments held in the Trust Account and general and administrative expenses, used to manage shareholder value, investment strategy, and capital availability for a Business Combination[118] Subsequent Events - On May 9, 2025, the Company repaid the Sponsor $155 in full[123] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and results of operations, highlighting its status as a blank check company, the lack of operating revenues, and the focus on identifying a business combination target. It details the financial performance for the quarter, liquidity, capital resources, and contractual obligations Cautionary Note Regarding Forward-Looking Statements - The Quarterly Report includes forward-looking statements, identified by terms such as "may," "should," "expect," and "plan," which are based on management's beliefs and current information[125] - Actual results could differ materially from forward-looking statements due to various factors, and no assurance can be given that projected results will be achieved[125] Overview - Dynamix Corporation is a blank check company, incorporated on June 13, 2024, with the purpose of effecting a business combination[126] - The Company plans to fund its business combination using cash from IPO proceeds, private placement warrants, shares, debt, or a combination thereof[126] - Significant costs are expected in pursuing acquisition plans, with no guarantee of a successful business combination[127] Results of Operations - The Company has not engaged in operations or generated operating revenues to date, expecting to do so only after the completion of its initial business combination[128] - Non-operating income is generated primarily from dividends earned on investments held in the trust account[128] | Metric | Three Months Ended March 31, 2025 | | :------------------------------------------ | :-------------------------------- | | Net income | $1,032,650 | | Dividends earned on investments held in trust account | $1,749,366 | | Change in fair value – over-allotment liability | $64,371 | | Interest earned in cash account | $12,716 | | General and administrative expenses | $584,643 | | Change in fair value of warrant liabilities | $209,160 | Liquidity and Capital Resources - The Initial Public Offering generated gross proceeds of $166,000,000, and the sale of private placement warrants generated $5,985,000[131] - A total of $166,415,000 was placed in the trust account following the IPO and private placement[132] | Metric | Amount (March 31, 2025) | | :-------------------------------- | :---------------------- | | Cash held outside trust account | $1,229,430 | | Net cash used in operating activities | $(504,051) | - The Sponsor or affiliates may provide working capital loans, convertible into private placement warrants, to fund deficiencies or transaction costs[138] - The Company does not believe it needs to raise additional funds for current operations but may require additional financing for a business combination or significant public share redemptions[139] Off-Balance Sheet Arrangements - As of March 31, 2025, the Company has no obligations, assets, or liabilities that would be considered off-balance sheet arrangements[140] Contractual Obligations - The Company has an agreement to pay $30,000 per month for office space, utilities, and administrative support services[141] - An advisory services agreement with Volta Tread LLC requires an annual fee, payable monthly, and reimbursement for costs, not exceeding 10% of interest earned on Trust Account funds[142] - Effective April 1, 2025, a Master Services Agreement with Avenue Z Inc. entails a $15,000 monthly payment for public relations programs[143] - A deferred underwriting fee of $6,640,000 is payable to the underwriters upon the completion of the initial business combination[144] Critical Accounting Estimates - The over-allotment option was accounted for as a liability and measured at fair value using a Black-Scholes model, which relies on significant unobservable inputs such as expected share-price volatility, expected life, and risk-free interest rate[147][148] - Deviations in these assumptions and estimates could result in materially different fair values and have a material impact on the financial statements[148] Recent Accounting Pronouncements - Management does not believe that any recently issued, but not effective, accounting standards would have a material effect on the Company's condensed financial statements if currently adopted[150] Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk As a smaller reporting company, Dynamix Corporation is not required to provide quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is therefore not required to provide quantitative and qualitative disclosures regarding market risk[151] Item 4. Controls and Procedures This section details the evaluation of the Company's disclosure controls and procedures, concluding their effectiveness as of March 31, 2025. It also notes the absence of a management report on internal controls over financial reporting due to a transition period for newly public companies and reports no material changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures - Management, including the chief executive officer and chief financial officer, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025[152] - Disclosure controls and procedures provide only reasonable, not absolute, assurance and are subject to inherent limitations and resource constraints[153] Management's Report on Internal Controls Over Financial Reporting - This Quarterly Report does not include a management's assessment or an attestation report from the independent registered public accounting firm regarding internal control over financial reporting, due to a transition period for newly public companies[154] Changes in Internal Control over Financial Reporting - There were no changes in internal control over financial reporting during the fiscal quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[155] Part II. Other Information This section presents other required information not covered in the financial statements Item 1. Legal Proceedings This section confirms that Dynamix Corporation is not involved in any material legal proceedings - The Company is not a party to, and none of its property is subject to, any material pending legal proceedings[157] Item 1A. Risk Factors This section states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K - As of the date of this Report, there have been no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K filed with the SEC on March 20, 2025[158] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section indicates that there are no unregistered sales of equity securities or use of proceeds to report for the period - There are no unregistered sales of equity securities and use of proceeds to report[159] Item 3. Defaults Upon Senior Securities This section confirms that there are no defaults upon senior securities to report - There are no defaults upon senior securities to report[160] Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[161] Item 5. Other Information This section indicates that there is no other information to report for the period - There is no other information to report[162] Item 6. Exhibits This section lists the exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q, including various agreements and certifications - The exhibits include the Amended and Restated Memorandum and Articles of Association, Warrant Agreement, Letter Agreement, Investment Management Trust Account Agreement, Registration Rights Agreement, Private Placement Warrants Purchase Agreements, Advisory Services Agreement, and certifications of principal executive and financial officers[164] Part III. Signatures This section contains the required signatures for the Form 10-Q, certifying its submission by authorized officers of Dynamix Corporation - The report is signed by Andrea Bernatova, Chief Executive Officer, and Nader Daylami, Chief Financial Officer, on May 14, 2025[167][168]