Dynamix Corporation(DYNX) - 2025 Q2 - Quarterly Report

Part I. Financial Information This section presents the unaudited financial statements and management's analysis for Dynamix Corporation Item 1. Financial Statements This section presents Dynamix Corporation's unaudited condensed financial statements for the quarter ended June 30, 2025 Condensed Balance Sheet Highlights (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 | December 31, 2024 | Change | | :----------------------------------- | :-------------- | :---------------- | :----- | | Cash | $1,040,643 | $1,543,566 | -$502,923 | | Investments held in Trust Account | $170,304,723 | $167,164,825 | +$3,139,898 | | Total Assets | $171,492,779 | $168,710,028 | +$2,782,751 | | Total Liabilities | $11,143,810 | $9,144,979 | +$1,998,831 | | Warrant liability | $3,234,510 | $2,158,000 | +$1,076,510 | | Shareholders' Deficit | $(9,955,754) | $(7,599,776) | -$2,355,978 | Condensed Statements of Operations Highlights | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Period from Inception (June 13, 2024) Through June 30, 2024 | | :------------------------------------------ | :------------------------------- | :----------------------------- | :---------------------------------------------------------------- | | General and administrative expenses | $1,150,121 | $1,734,764 | $26,661 | | Change in fair value of warrant liabilities | $(867,350) | $(1,076,510) | — | | Dividends earned on investments held in Trust Account | $1,758,009 | $3,507,375 | — | | Net (loss) income | $(248,730) | $783,920 | $(26,661) | | Basic and diluted net (loss) income per share, Class A | $(0.01) | $0.04 | — | Condensed Statements of Cash Flows Highlights (Six Months Ended June 30, 2025) | Activity | Amount | | :-------------------------------- | :------------- | | Net cash used in operating activities | $(870,400) | | Net cash provided by financing activities | $367,477 | | Net Change in Cash | $(502,923) | | Cash – End of period | $1,040,643 | Condensed Balance Sheets This section presents Dynamix Corporation's unaudited condensed balance sheets, detailing assets, liabilities, and shareholders' deficit Condensed Balance Sheets (June 30, 2025 vs. December 31, 2024) | Assets | June 30, 2025 (unaudited) | December 31, 2024 | | :---------------------------------- | :------------------------ | :---------------- | | Cash | $1,040,643 | $1,543,566 | | Prepaid expenses | $118,863 | $1,637 | | Investments held in Trust Account | $170,304,723 | $167,164,825 | | Total Assets | $171,492,779 | $168,710,028 | | Liabilities | | | | Accounts payable and accrued expenses | $1,194,300 | $207,608 | | Warrant liability | $3,234,510 | $2,158,000 | | Deferred underwriting fee | $6,640,000 | $6,640,000 | | Total Liabilities | $11,143,810 | $9,144,979 | | Class A ordinary shares subject to possible redemption | $170,304,723 | $167,164,825 | | Accumulated deficit | $(9,956,307) | $(7,600,351) | | Total Shareholders' Deficit | $(9,955,754) | $(7,599,776) | Condensed Statements of Operations This section details Dynamix Corporation's unaudited condensed statements of operations for the periods ended June 30, 2025 Condensed Statements of Operations (Unaudited) | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Period from June 13, 2024 (Inception) Through June 30, 2024 | | :------------------------------------------ | :------------------------------- | :----------------------------- | :---------------------------------------------------------------- | | General and administrative expenses | $1,150,121 | $1,734,764 | $26,661 | | Loss from operations | $(1,150,121) | $(1,734,764) | $(26,661) | | Change in fair value of warrant liabilities | $(867,350) | $(1,076,510) | — | | Interest earned on cash account | $10,732 | $23,448 | — | | Dividends earned on investments held in Trust Account | $1,758,009 | $3,507,375 | — | | Change in fair value – over-allotment liability | — | $64,371 | — | | Total other income, net | $901,391 | $2,518,684 | — | | Net (loss) income | $(248,730) | $783,920 | $(26,661) | | Basic and diluted net (loss) income per share, Class A | $(0.01) | $0.04 | — | | Basic and diluted net (loss) income per share, Class B | $(0.01) | $0.04 | $(0.01) | Condensed Statements of Changes in Shareholders' Deficit This section outlines changes in Dynamix Corporation's shareholders' deficit for the three and six months ended June 30, 2025 Condensed Statements of Changes in Shareholders' Deficit (Three and Six Months Ended June 30, 2025) | Item | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :---------------------------------------------------- | :---------------- | :------------- | :------------ | | Total Shareholders' Deficit | $(7,599,776) | $(8,126,577) | $(9,955,754) | | Accretion of redeemable Class A ordinary shares to redemption amount | $(1,559,451) (Q1) | $(1,580,447) (Q2) | | | Forfeiture of Founder Shares | — | (22) | — | | Net income (loss) | $1,032,650 (Q1) | $(248,730) (Q2) | | - The accumulated deficit increased from $(7,600,351) at December 31, 2024, to $(9,956,307) at June 30, 2025, primarily due to accretion of redeemable Class A ordinary shares to redemption amount and net loss in Q2 2025[15] Condensed Statements of Cash Flows This section details Dynamix Corporation's unaudited condensed statements of cash flows for the six months ended June 30, 2025 Condensed Statements of Cash Flows (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2025 | Period from June 13, 2024 (Inception) Through June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :---------------------------------------------------------------- | | Net income (loss) | $783,920 | $(26,661) | | Adjustments for non-cash items (e.g., warrant liabilities, dividends) | $(2,495,236) | $16,241 | | Changes in operating assets and liabilities | $840,916 | $10,420 | | Net cash used in operating activities | $(870,400) | — | | Cash withdrawn from Trust Account for working capital | $367,477 | — | | Net cash provided by financing activities | $367,477 | — | | Net Change in Cash | $(502,923) | — | | Cash – Beginning of period | $1,543,566 | — | | Cash – End of period | $1,040,643 | — | Notes to Condensed Financial Statements This section provides detailed notes on Dynamix Corporation's organization, accounting policies, and financial instrument valuations NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS This note details Dynamix Corporation's organization, business operations, IPO, and current financial position - Dynamix Corporation is a blank check company incorporated on June 13, 2024, for the purpose of effecting a business combination. It has not commenced operations and generates non-operating income from interest on cash and cash equivalents[22][23] - The company consummated its Initial Public Offering (IPO) on November 22, 2024, selling 16,600,000 units at $10.00 per unit, generating $166,000,000. Simultaneously, it sold 5,985,000 Private Placement Warrants for $5,985,000[24][25] - A total of $166,415,000 was placed in a Trust Account, to be used for the business combination or redemption of public shares if a combination is not completed within 24 months from the IPO closing[31][34] - As of June 30, 2025, the Company had $1,040,643 in its operating bank account and a working capital deficit of $109,639, raising substantial doubt about its ability to continue as a going concern[39][41] NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note details Dynamix Corporation's significant accounting policies, including GAAP, emerging growth company status, and fair value measurements - The financial statements are prepared in accordance with GAAP for interim financial information, with certain disclosures condensed or omitted per SEC rules for interim reporting[43] - 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[45][46] - Investments held in the Trust Account are classified as trading securities and measured at fair value using Level 1 inputs (quoted prices in active markets)[50] - Public Warrants are accounted for as liabilities and re-valued at each reporting date, with changes in fair value reported in the statement of operations. Private Placement Warrants are classified under equity treatment[60] - Class A ordinary shares subject to possible redemption are classified as temporary equity and adjusted to redemption value at each reporting period, impacting additional paid-in capital and accumulated deficit[61] - The FASB issued ASU 2024-03, 'Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures,' effective for fiscal years beginning after December 15, 2026, which the Company is currently evaluating[66] NOTE 3. INITIAL PUBLIC OFFERING This note outlines Dynamix Corporation's Initial Public Offering, including units, warrants, and redemption terms - On November 22, 2024, the Company sold 16,600,000 Units at $10.00 per Unit, each consisting of one Class A ordinary share and one-half of one redeemable warrant[69] - As of June 30, 2025, there were 14,285,000 warrants outstanding, comprising 8,300,000 Public Warrants and 5,985,000 Private Placement Warrants[71] - The Company may redeem outstanding warrants at $0.01 per warrant if the Class A ordinary share price equals or exceeds $18.00 for 20 trading days within a 30-trading day period, commencing 30 days after the business combination[75][83] NOTE 4. PRIVATE PLACEMENT This note details the private placement of warrants to the Sponsor and underwriters, including terms and transfer restrictions - Simultaneously with the IPO closing, the Sponsor and underwriters purchased 5,985,000 Private Placement Warrants at $1.00 each, totaling $5,985,000[79] - Private Placement Warrants are identical to Public Warrants but lack the Warrant Put Right and have transfer restrictions for holders until 30 days after the initial Business Combination[80] NOTE 5. RELATED PARTY TRANSACTIONS This note details related party transactions, including founder shares, promissory notes, and administrative service agreements - The Sponsor made a capital contribution of $25,000 for 5,750,000 founder shares on June 18, 2024. In January 2025, 216,667 founder shares were forfeited due to the unexercised over-allotment option[81] - Founder shares transferred to the vice president are subject to a service condition, with compensation recognized ratably. Shares transferred to director nominees are subject to a performance condition (Business Combination occurrence), and no compensation has been recognized as of June 30, 2025, as a Business Combination is not yet probable[86] - The Company repaid a $105,274 promissory note from the Sponsor on November 22, 2024. An administrative services agreement with a Sponsor affiliate requires monthly payments of $30,000 for office space and support services[88][89] NOTE 6. COMMITMENTS This note outlines Dynamix Corporation's commitments, including geopolitical risks, registration rights, and deferred underwriting fees - Geopolitical instability (Russia-Ukraine, Israel-Hamas conflicts) creates global economic consequences, which could adversely affect the Company's search for a Business Combination[93][94] - Holders of founder shares, Private Placement Warrants, and working capital loan warrants have registration rights, entitling them to require the Company to register their securities[95] - A deferred underwriting fee of $6,640,000 is payable to underwriters upon completion of the initial Business Combination, from amounts remaining in the Trust Account after shareholder redemptions[97] - The Company entered into an advisory services agreement with Volta, an affiliate of the Sponsor, for management and consulting services, with fees not exceeding 10% of interest earned on Trust Account funds[98][99] NOTE 7. SHAREHOLDERS' DEFICIT This note outlines Dynamix Corporation's shareholders' deficit, including Class A and Class B ordinary shares and voting rights - As of June 30, 2025, there were no preference shares or Class A ordinary shares issued or outstanding (excluding 16,600,000 shares subject to possible redemption)[101][102] - Class B ordinary shares outstanding decreased from 5,750,000 at December 31, 2024, to 5,533,333 at June 30, 2025, due to the forfeiture of 216,667 founder shares in January 2025[103][104] - Founder shares will automatically convert into Class A ordinary shares on a one-for-one basis upon or immediately following the initial Business Combination, subject to certain adjustments[105] - Prior to a Business Combination, only Class B ordinary shareholders have the right to vote on the appointment and removal of directors and on continuing the Company in a jurisdiction outside the Cayman Islands[107] NOTE 8. FAIR VALUE MEASUREMENTS This note details Dynamix Corporation's fair value measurements, classifying assets and liabilities using a three-level hierarchy - The Company classifies assets and liabilities measured at fair value using a three-level hierarchy: Level 1 for quoted prices in active markets, Level 2 for observable inputs other than Level 1, and Level 3 for unobservable inputs[110][115] Fair Value Measurements (June 30, 2025 vs. December 31, 2024) | Item | Level | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :---- | :-------------- | :---------------- | | Investments held in Trust Account | 1 | $170,304,723 | $167,164,825 | | Over-allotment option liability | 3 | — | $64,371 | | Warrant liability – Public Warrants | 1 | $3,234,510 | $2,158,000 | - The over-allotment option liability, initially valued using a Black-Scholes model (Level 3), expired unexercised in January 2025, resulting in a fair value of $0 at June 30, 2025[112][113][118] NOTE 9. SEGMENT INFORMATION This note states Dynamix Corporation operates as a single segment, with the CEO as the Chief Operating Decision Maker - The Company operates as a single operating segment, with the Chief Executive Officer identified as the Chief Operating Decision Maker (CODM)[119][120] - The CODM reviews key metrics such as dividends earned on investments held in the Trust Account and general and administrative expenses to assess performance and allocate resources[121] NOTE 10. SUBSEQUENT EVENTS This note details subsequent events, including agreements with underwriters and the Business Combination Agreement with The Ether Machine, Inc - On July 20, 2025, underwriters agreed to a one-time cash fee of $500,000 upon Business Combination closing, waiving additional consideration and forfeiting 2,070,000 private placement warrants[126] - On July 21, 2025, the Company entered into a Business Combination Agreement with The Ether Machine, Inc. ('Pubco') and related entities[127] - Concurrently, the Company, Pubco, and The Ether Reserve entered into Equity PIPE Subscription Agreements with investors to purchase Pubco Class A Stock for $197,100,000 in cash and a contribution of 67,121 Ether[129] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's analysis of Dynamix Corporation's financial condition and results, highlighting its blank check status and recent business combination agreement - Dynamix Corporation is a blank check company formed to effect a business combination, with no operating revenues to date, generating non-operating income from trust account investments[134][138] - On July 21, 2025, the Company entered into a Business Combination Agreement with The Ether Machine, Inc. ('Pubco') and other related entities[136] Net Income (Loss) Summary | Period | Net Income (Loss) | | :------------------------------------------ | :---------------- | | Three months ended June 30, 2025 | $(248,730) | | Six months ended June 30, 2025 | $783,920 | | Inception (June 13, 2024) through June 30, 2024 | $(26,661) | - As of June 30, 2025, the Company had a working capital deficit and expects to incur significant future costs, raising substantial doubt about its ability to continue as a going concern within one year[153] - The Company has contractual obligations including $30,000 per month for administrative services, an annual advisory fee (capped at 10% of trust account interest), and a $15,000 monthly fee for public relations services[155][156][157] 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 regarding market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures regarding market risk[165] Item 4. Controls and Procedures Management evaluated the Company's disclosure controls and procedures as of June 30, 2025, concluding effectiveness with no material changes - As of June 30, 2025, the Company's disclosure controls and procedures were evaluated and deemed effective by certifying officers[167] - No material changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[170] Part II. Other Information This section provides additional information, including legal proceedings, risk factors, and exhibits Item 1. Legal Proceedings The Company is not a party to any material pending legal proceedings, nor is any of its property subject to such proceedings - The Company is not a party to any material pending legal proceedings[172] Item 1A. Risk Factors As of the report date, no material changes occurred to the risk factors previously disclosed in the Company's Annual Report on Form 10-K - No material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K as of the date of this report[173] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities and use of proceeds to report[174] Item 3. Defaults Upon Senior Securities No defaults upon senior securities to report for the period - No defaults upon senior securities to report[175] Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to Dynamix Corporation - Mine safety disclosures are not applicable[176] Item 5. Other Information No other information to report in this section - No other information to report[177] Item 6. Exhibits This section lists all exhibits filed or incorporated by reference, including the Business Combination Agreement and related subscription agreements - Key exhibits include the Business Combination Agreement (dated July 21, 2025), Amended and Restated Memorandum and Articles of Association, Warrant Agreement, and various subscription agreements related to the Equity PIPE[180] Part III. Signatures This section contains the duly authorized signatures for Dynamix Corporation's Quarterly Report on Form 10-Q Signatures The report is duly signed by Andrea Bernatova, CEO, and Nader Daylami, CFO, on behalf of Dynamix Corporation on August 13, 2025 - The report was signed by Andrea Bernatova, Chief Executive Officer, and Nader Daylami, Chief Financial Officer, on August 13, 2025[184][185]