Filed 2026-03-06 · Period ending 2025-12-31 · 78,221 words · SEC EDGAR
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# Dynamix Corp (ETHM) — 10-K
**Filed:** 2026-03-06
**Period ending:** 2025-12-31
**Accession:** 0001213900-26-024814
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/2028699/000121390026024814/)
**Origin leaf:** 6ac8bd11b95d2fe815595b88dcc17c954dc58c3b9c4abd809a2a1fb1eec8fbed
**Words:** 78,221
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
Dynamix Corporation
(Exact name of Registrant as specified in its Charter)
| Cayman Islands | | 001-42414 | | 00-0000000 | |
| (State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification Number) | |
1980 Post Oak Blvd., Suite 100
PMB 6373
Houston, TX, 77056
(Address of principal executive offices, including zip code)
Registrants telephone number, including area code: (646) 792 5600
Not Applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered | |
| Units, each consisting of one Class A ordinary share, par value $0.0001 per share, and one-half of one redeemable warrant | | ETHMU | | The Nasdaq Stock Market LLC | |
| Class A ordinary shares, par value $0.0001 per share | | ETHM | | The Nasdaq Stock Market LLC | |
| Redeemable warrants, each whole warrant exercisable for one Class A ordinary share, at an exercise price of $11.50 per share | | ETHMW | | The Nasdaq Stock Market LLC | |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesNo
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | | Accelerated filer | | |
| Non-accelerated filer | | Smaller reporting company | | |
| | | Emerging growth company | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of March 3, 2026, 16,600,000 Class A ordinary shares, par value $0.0001 per share, and 5,533,333 Class B ordinary shares, par value $0.0001 per share, were issued and outstanding.
Documents Incorporated by Reference: None
TABLE OF CONTENTS
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PART I |
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Item 1. |
Business |
1 | |
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Item 1A. |
Risk Factors |
11 | |
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Item 1B. |
Unresolved Staff Comments |
55 | |
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Item 2. |
Properties |
56 | |
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Item 3. |
Legal Proceedings |
56 | |
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Item 4. |
Mine Safety Disclosures |
56 | |
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PART II |
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Item 5. |
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
57 | |
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Item 6. |
[Reserved] |
57 | |
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Item 7. |
Managements Discussion and Analysis of Financial Condition and Results of Operations. |
57 | |
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Item 7A. |
Quantitative and Qualitative Disclosures about Market Risk. |
62 | |
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Item 8. |
Financial Statements and Supplementary Data. |
62 | |
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Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
62 | |
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Item 9A. |
Controls and Procedures |
62 | |
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Item 9B. |
Other Information |
63 | |
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Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
63 | |
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PART III |
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Item 10. |
Directors, Executive Officers and Corporate Governance |
64 | |
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Item 11. |
Executive Compensation |
72 | |
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Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters |
73 | |
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Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
74 | |
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Item 14. |
Principal Accountant Fees and Services |
76 | |
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PART IV |
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Item 15. |
Exhibits, Financial Statements Schedules |
77 | |
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Item 16. |
Form 10-K Summary |
78 | |
i
Cautionary Note Regarding Forward-Looking Statements
**
*All statements other than statements of historical
fact included in this Annual Report on Form 10-K including, without limitation, statements under Managements Discussion
and Analysis of Financial Condition and Results of Operations regarding our financial position, business strategy and the plans
and objectives of management for future operations, are forward looking statements. When used in this Annual Report on Form 10-K, words
such as may, should, could, would, expect, plan, anticipate,
believe, estimate, continue, or the negative of such terms or other similar expressions, as
they relate to us or our management, identify forward looking statements. Such forward looking statements are based on the beliefs of
management, as well as assumptions made by, and information currently available to, our management. No assurance can be given that results
in any forward-looking statement will be achieved and actual results could be affected by one or more factors, which could cause them
to differ materially. The cautionary statements made in this Annual Report should be read as being applicable to all forward-looking statements
whenever they appear in this Annual Report on Form 10-K. For these statements, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act. Actual results could differ materially from those contemplated by
the forward-looking statements as a result of certain factors, including but not limited to, those detailed in our filings with the Securities
and Exchange Commission. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf
are qualified in their entirety by this paragraph. We maintain a corporate website at https://dynamix-corp.com. The information that may
be contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference
in, or otherwise a part of, this report.*
ii
SUMMARY OF RISK FACTORS
An investment in our securities involves a high
degree of risk. The following is a summary of the principal factors that make an investment in our securities speculative or risky, all
of which are more fully described below in the section titled Risk Factors. This summary should be read in conjunction with
the Risk Factors section and should not be relied upon as an exhaustive summary of the material risks facing our business.
In addition to the following summary, you should consider the information set forth in the Risk Factors section and the
other information contained in this Annual Report before investing in our securities.
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| Our public shareholders may not be afforded an opportunity
to vote on our proposed initial business combination (in the event that the proposed Business Combination with The Ether Machine is not
consummated, each as defined herein), and even if we hold a vote, holders of our founder shares will participate in such vote, which
means we may complete our initial business combination even though a majority of our public shareholders do not support such a combination. |
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| If we seek shareholder approval of our initial business
combination, our initial shareholders and management team have agreed to vote in favor of such initial business combination, regardless
of how our public shareholders vote, and we may not need any public shares in addition to our founder shares to be voted in favor of
an initial business combination in order to approve an initial business combination. |
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| Your only opportunity to effect your investment decision
regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash. |
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| In the event that the proposed Business Combination with
The Ether Machine is not consummated, the ability of our public shareholders to redeem their shares for cash may make our financial condition
unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with
another target. |
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| The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares and the amount of deferred underwriting compensation may not allow us to complete
the most desirable business combination or optimize our capital structure, and may substantially dilute your investment in us. |
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| In the event that the proposed Business Combination with
The Ether Machine is not consummated, the requirement that we complete our initial business combination within the completion window
may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to
conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine
our ability to complete our initial business combination on terms that would produce value for our shareholders. |
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| We may engage one or more of our underwriters of our initial
public offering or one of their respective affiliates to provide additional services to us, which may include acting as M&A advisor
in connection with an initial business combination or as placement agent in connection with a related financing transaction. |
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| We may not be able to complete our initial business combination
within the completion window, in which case we would redeem our public shares. |
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| We may decide not to extend the term we have to consummate
our initial business combination, in which case we would redeem our public shares, and the warrants may be worthless. |
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| If a shareholder fails to receive notice of our offer to
redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for submitting or
tendering its shares, such shares may not be redeemed. |
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iii
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| Because of our limited resources and the significant competition
for business combination opportunities, it may be more difficult for us to complete our initial business combination. |
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| If our funds held outside the trust account are insufficient
to allow us to operate for at least the duration of the completion window, it could limit the amount available to fund our search for
a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management
team to fund our search and to complete our initial business combination. |
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| If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.025 per
share. |
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| Our directors may decide not to enforce the indemnification
obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public
shareholders. |
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| If we are deemed to be an investment company under the
Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which
may make it difficult for us to complete our initial business combination. |
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| Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by the status of debt and equity markets. |
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| If we are unable to consummate our initial business combination
within the completion window, our public shareholders may be forced to wait beyond 24months before redemption from our trust account. |
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| We may not hold an annual general meeting until after the
consummation of our initial business combination, which could delay the opportunity for our public shareholders to discuss company affairs
with management, and the holders of our ClassA ordinary shares will not have the right to vote on the appointment or removal of
directors or continuing the Company in a jurisdiction outside the Cayman Islands until after the consummation of our initial business
combination. |
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| The warrants may become exercisable and redeemable for
a security other than the ClassA ordinary shares, and you will not have any information regarding such other security at this time. |
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| We may issue our shares to investors in connection with
our initial business combination at a price which is less than the prevailing market price of our shares at that time. |
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**
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| Unless we complete our business combination, holders of
the public warrants will not be able to exercise the warrant put right, and we may not have sufficient funds to repurchase public warrants
pursuant to the holders exercise of the warrant put rights. |
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**
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| Our key personnel may negotiate employment or consulting
agreements with a target business in connection with a particular business combination, and a particular business combination may be
conditioned on the retention or resignation of such key personnel. |
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| You will not have any rights or interests in funds from
the trust account, except under certain limited circumstances. |
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| Nasdaq may delist our securities from trading on its exchange,
which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions. |
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iv
PART
I
Item 1. Business
General
We are a blank check company incorporated in the
Cayman Islands (the Company) on June 13, 2024 formed for the purpose of effecting a merger, amalgamation, share exchange,
asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the initial business
combination). We have identified a target for our business combination, as described below under Proposed Business Combination.
If the proposed Business Combination is not completed, we will continue to review, a number of opportunities to enter into an initial
business combination with an operating business, but we are not able to determine at this time whether we will complete an initial business
combination with any of the target businesses that we have reviewed, including the proposed Business Combination or with any other target
business. As of December 31, 2025, the Company had not commenced any operations. All activity for the period from June 13, 2024 (inception)
through December 31, 2025 relates to the Companys formation, the initial public offering (the initial public offering),
which is described below, and subsequent to the initial public offering, identifying a target company for a business combination and pursuing
the completion of the proposed Business Combination. The Company will not generate any operating revenues until after the completion of
its initial business combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash
and cash equivalents from the proceeds derived from the initial public offering. Based on our business activities, the Company is a shell
company as defined under the Securities Exchange Act of 1934 (the Exchange Act) because we have no operations and
nominal assets consisting almost entirely of cash except proceeds from our initial public offering (as defined below) that is held in
the trust account and invested mainly in US Treasury Bills.
On June 18, 2024, we issued an aggregate of 5,750,000
Class B ordinary shares, par value $0.0001 per share (founder shares) to DynamixCore Holdings, LLC (our sponsor),
for an aggregate purchase price of $25,000. On January 7, 2025, the sponsor surrendered 216,667 founder shares for no value, resulting
in 5,533,333 Class B ordinary shares outstanding.
The registration statement on Form S-1 (File No.
333-280719) for our initial public offering was declared effective by the Securities and Exchange Commission (the SEC) on
November 20, 2024. On November 22, 2024, the Company consummated the initial public offering of 16,600,000, including 1,600,000 units
as a result of the underwriters partial exercise of their overallotment option (the Units), at an offering price
of $10.00 per Unit. The gross proceeds from the initial public offering were $166,000,000 in the aggregate.
Simultaneous with the consummation of the initial
public offering and the issuance and sale of the Units, the Company consummated the private placement (the private placement)
of 5,985,000 private placement warrants at a price of $1.00 per Private Placement Warrant, generating total gross proceeds of $5,985,000.
A total of $166,415,000 of the net proceeds of
initial public offering and private placement, were placed in a trust account maintained by the Odyssey Transfer and Trust Company acting
as trustee. Transaction costs amounted to approximately $10,605,256, consisting of $3,320,000 of cash underwriting fees, $6,640,000 of
deferred underwriting fees and approximately $645,256 of other offering costs. In January 2025, the underwriters remaining over-allotment
option expired unexercised and as a result, 216,667 Class B ordinary shares were forfeited to the Company.
The balance of the funds held outside of the trust
account are intended to be used 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 the future, a portion of interest income on the funds held in the trust account may be released to us as permitted withdrawals
to fund our working capital requirements (subject to an annual limit of 10% of interest earned on funds held in the trust account (the
Cap)), and to pay tax obligations. At December 31, 2025, funds held in the trust account equaled $173,392,842.
1
Our Units began trading on November 22, 2024 on
The Nasdaq Stock Market LLC (Nasdaq) under the symbol DYNXU. On December 6, 2024, we announced that the holders
of the Units may elect to separately trade the Class A ordinary shares and redeemable warrants included in the Units commencing on December
9, 2024. Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant to purchase one Class A ordinary share.
On August 27, 2025, the Companys ticker symbols changed for its Class A ordinary shares, Units and public warrants from DYNX,
DYNXU and DYNXW, to ETHM, ETHMU and ETHMW, respectively.
Proposed Business Combination
On July 21, 2025, Dynamix
Corporation (the SPAC) and The Ether Machine, Inc., a Delaware corporation (Pubco), entered into a Business
Combination Agreement (the Business Combination Agreement) with ETH SPAC Merger Sub Ltd., a Cayman Islands exempted company
and wholly-owned subsidiary of Pubco (SPAC Merger Sub), The Ether Reserve LLC, a Delaware limited liability company (the
LLC), Ethos Sub 1, Inc., a Delaware corporation and wholly-owned subsidiary of SPAC (SPAC Subsidiary A), Ethos
Sub 2, Inc., a Delaware corporation and wholly-owned subsidiary of SPAC Subsidiary A (SPAC Subsidiary B), Ethos Sub 3, Inc.,
a Delaware corporation and wholly-owned subsidiary of SPAC Subsidiary B (LLC Merger Sub), and ETH Partners LLC, a Delaware
limited liability company (the Seller).
For additional information
regarding the Business Combination Agreement and the transactions contemplated therein, see the Current Reports on Form 8-K as filed with
the SEC by the Company on July 25, 2025, August 4, 2025, August 6, 2025, September 2, 2025 and September 9, 2025.
*LLC Unit Subscription Agreement*
On August 29, 2025, the SPAC,
Pubco and the LLC entered into a subscription agreement (the LLC Unit Subscription Agreement) with JBerns inv EM1, LLC,
a Nevada limited liability company (the LLC Unit Investor), pursuant to which the LLC Unit Investor agreed to purchase,
and the LLC agreed to issue and sell LLC Class A Units (the Subscribed Units) for a contribution of 150,000 ether, in a
private placement (the LLC Unit Subscription), upon the terms and subject to the conditions set forth therein. The closing
of the LLC Unit Subscription occurred on September 8, 2025. Immediately prior to the Company Merger (as defined in the Business Combination
Agreement), the Subscribed Units will be adjusted as set forth in the LLC Unit Subscription Agreement. At the Company Merger Effective
Time (as defined in the Business Combination Agreement), each Subscribed Unit (as adjusted) shall be converted automatically into one
common non-voting unit of the LLC (the LLC Exchange Units).
Pursuant to the LLC Unit
Subscription Agreement, Pubco agreed to use commercially reasonable efforts to cause the non-voting Class A common stock, par value $0.01
per share, of Pubco (the Pubco Class A Stock) into which the LLC Exchange Units held by the LLC Unit Investor will be converted
or convertible upon closing of the Company Merger to be registered on the registration statement on Form S-4 to be filed in connection
with the Business Combination Agreement (as amended or supplemented from time to time, the Registration Statement). To the
extent such securities are not able to be registered on the Registration Statement, Pubco has agreed to use commercially reasonable efforts
to file a registration statement registering the resale of the shares of Pubco Class A Stock on a resale registration statement within
30 calendar days following the Closing Date (as defined in the Business Combination Agreement); and to use commercially reasonable efforts
to have such registration statement declared effective as soon as practicable, and in any event no later than 90 calendar days after the
Closing Date, subject to an extension in the event of SEC review.
For additional information
regarding the LLC Unit Subscription Agreement and the transactions contemplated therein, see the Current Reports on Form 8-K as filed
with the SEC by the Company on September 2, 2025 and September 9, 2025.
*Stockholders Agreement*
On August 29, 2025, the Seller,
Pubco and the LLC entered into a Stockholders Agreement with the LLC Unit Investor (the Stockholders Agreement), which provides
for board composition and director nomination rights and sets forth certain governance provisions applicable to Pubco following the closing
of the business combination. For additional information regarding the Stockholders Agreement and the transactions contemplated therein,
see the Current Report on Form 8-K filed with the SEC by the Company on September 2, 2025.
**
**
2
**
*Registration Statement on Form S-4*
On September 16, 2025, Pubco issued a press release
announcing Pubcos confidential submission of a draft registration statement on Form S-4 with the Securities and Exchange Commission.
Sources of Target Businesses
While we have identified a target for our proposed
Business Combination, we may continue to evaluate other potential target businesses if the proposed Business Combination is not consummated.
We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment
bankers and private investment funds. Target businesses may be brought to our attention by such unaffiliated sources as a result of being
solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested
on an unsolicited basis, since many of these sources will have read this Annual Report and know what types of businesses we are targeting.
Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates that they become aware
of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade
shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily
be available to us as a result of the track record and business relationships of our officers and directors. While we do not presently
anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis,
we may engage these firms or other individuals in the future, in which event we may pay a finders fee, consulting fee or other
compensation to be determined in an arms length negotiation based on the terms of the transaction.
We will engage a finder only to the extent our
management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach
us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of a
finders fee is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in
the trust account.
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our sponsor, officers, directors or advisors (or their respective affiliates
or related entities). In the event that we seek to complete our initial business combination with a company that is affiliated (as defined
in our amended and restated memorandum and articles of association) with our sponsor, officers, directors or advisors (or their respective
affiliates or related entities), we, or a committee of independent directors, will obtain an opinion from an independent investment banking
firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an
independent accounting firm that our initial business combination is fair to our Company from a financial point of view. We are not required
to obtain such an opinion in any other context.
Business Combination Criteria
While we may acquire a business in any industry
and in any geography, if the proposed Business Combination is not consummated, we plan to continue to focus our pursuit for business combination
opportunities with companies operating in the energy and power value chain. These include, but are not limited to, businesses focused
across energy, infrastructure and renewable sectors, including participation in E&P, midstream, oilfield services, power and digital
infrastructure. We believe the oil and gas sector is comprised of hundreds of producers and midstream operators with free cash flow generative
assets.
The integration of artificial intelligence (AI)
across various industries is set to drive a strong surge in power demand. Our extensive backgrounds and robust networks uniquely position
us to capitalize on this emerging opportunity. By leveraging our expertise and connections, we are well-equipped to identify and acquire
high-potential assets that will benefit from this increasing need for power.
3
We believe that targeting both
traditional energy and AI-related power opportunities is highly complementary due to the significant overlap and interdependence between
these sectors. The growing demand for AI technologies, particularly in industries such as data centers, necessitates a reliable and increased
power supply. This, in turn, underscores the need for responsible natural gas production and transportation, which are critical for efficient
power generation. By focusing on both traditional energy and AI-driven power opportunities, we can strategically identify and acquire
assets that support the burgeoning power needs of AI industries while ensuring sustainable and responsible energy practices. This dual
approach positions us to maximize value and effectively address the evolving energy landscape, driving long-term growth and stability.
Our objective is to focus on
seeking a business combination in the energy and power sector, which capitalizes on our management teams extensive expertise. We
expect to utilize our management teams experience in operating and leading businesses in these sectors and to leverage their network
of relationships to identify attractive high-growth businesses within our areas of focus.
We believe our management team
is well positioned to create value for our shareholders, and that our contacts and sources, including those developed during decades of
global operating and investment experience in our target sectors, and as owners of private and public companies, will allow us to identify
and generate attractive acquisition opportunities.
We intend to focus our investment
effort broadly across the United States as well as global markets, including Canada, Mexico, Europe and South America. We believe that
the operating expertise of our management team in the energy and power sector across multiple industry verticals will give us a large,
addressable universe of prospective business combination targets. We intend to continue to target an initial business combination that
has one or more of the following characteristics:
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| Substantial opportunity for growth following a business
combination. Favorable sector and market dynamics including large unmet demand, which may drive organic growth with additional opportunities
for add-on acquisitions. |
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| Leadership position. Defensible or disruptive niche,
differentiated technology, competitive advantages. |
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| Track record of profitability. Long-term sustainable
cash flows from competitive advantages. |
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| Public company readiness. Proven public-ready management
team, corporate governance, and reporting policies. |
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| Strong & qualified management team. Public-ready
teams, proven track records driving revenue and value creation for shareholders. |
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| Mid-cap initial enterprise value. Enterprise value
$1.0 billion $1.5 billion with readiness to grow. |
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The parameters mentioned above
are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to
the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem
relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above
criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications
related to our initial business combination, which, as discussed in this Annual Report, would be in the form of proxy materials or tender
offer documents, as applicable, that we would file with the SEC.
In evaluating a prospective
target business, we expect to continue to conduct a thorough due diligence review that will encompass, among other things, meetings with
incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as reviewing
financial and other information that will be made available to us. We will also utilize our operational and capital allocation experience.
4
Evaluation of a Target Business and Structuring
of Our Initial Business Combination
In evaluating a prospective target business, we
expect to continue to conduct a due diligence review which may encompass, among other things, meetings with incumbent management and employees,
document reviews, interviews of customers and suppliers, inspection of facilities, as applicable, as well as a review of financial, operational,
legal and other information which will be made available to us. If we determine to move forward with a particular target, we will proceed
to structure and negotiate the terms of the business combination transaction.
The time required to select and evaluate a target
business and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with,
a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses
and will reduce the funds we can use to complete another business combination.
Initial Business Combination
Nasdaq rules require that we must complete one
or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account
(excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account). Our board of directors
will make the determination as to the fair market value of our initial business combination. In the event that we seek to complete our
initial business combination with a company that is affiliated with our sponsor, officers or directors (or their respective affiliates
or related entities), we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm
or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent
accounting firm that our initial business combination is fair to our Company from a financial point of view. We are not required to obtain
such an opinion in any other context. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority
of our independent directors.
We anticipate structuring our initial business
combination so that the post transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests
or assets of the target business or businesses. We may, however, structure our initial business combination such that the post transaction
company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the
target management team or shareholders or for other reasons, but we will only complete such business combination if the post transaction
company owns or acquires 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an
investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post transaction company
owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively
own a minority interest in the post transaction company, depending on valuations ascribed to the target and us in the business combination.
For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding
capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target.
However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business
combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less
than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post transaction company,
the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net
assets test described above. If the business combination involves more than one target business, the 80% of net assets test will be based
on the aggregate value of all of the target businesses. We have until November 22, 2026 to complete our initial business combination.
Shareholders May Not Have the Ability to Approve
Our Initial Business Combination
If the proposed Business Combination with Ether
Machine is not consummated, we may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject
to the provisions of our amended and restated memorandum and articles of association. If we conduct redemptions pursuant to the tender
offer rules of the U.S. Securities and Exchange Commission (the SEC), we will, pursuant to our amended and restated certificate
of incorporation: (a) conduct the repurchases pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender
offers; and (b) file tender offer documents with the SEC prior to completing our initial business combination which contain substantially
the same financial and other information about the initial business combination and the redemption rights as is required under Regulation
14A of the Exchange Act, which regulates the solicitation of proxies.
5
Redemption Rights for Public Shareholders upon
Completion of Our Initial Business Combination
We will provide our public shareholders with the
opportunity to redeem, regardless of whether they abstain, vote for, or against, our initial business combination, all or a portion of
their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to
the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial
business combination, including interest earned on the funds held in the trust account (net of taxes payable) and not previously released
to us pursuant to permitted withdrawals, divided by the number of then outstanding public shares, subject to the limitations and on the
conditions described herein. The amount in the trust account is initially anticipated to be $10.025 per public share. The per share amount
we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will
pay to the underwriters. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have
agreed to waive their redemption rights with respect to their founder shares and any public shares they may hold in connection with the
completion of our initial business combination.
Limitations on Redemptions
Our proposed initial business combination may
impose a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or
other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration
we would be required to pay for all public shares that are validly submitted for redemption plus any amount required to satisfy cash conditions
pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete
the initial business combination or redeem any shares, and all public shares submitted for redemption will be returned to the holders
thereof. We may, however, raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness
in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may
enter, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.
Limitation on Redemption Upon Completion of
Our Initial Business Combination If We Seek Shareholder Approval
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate
of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under
Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares
sold in our initial public offering, which we refer to as the Excess Shares, without our prior consent. We believe this
restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their
ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase
their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public
shareholder holding more than an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise its redemption
rights if such holders shares are not purchased by us, our sponsor or our management at a premium to the then-current market price
or on other undesirable terms. By limiting our shareholders ability to redeem no more than 15% of the shares sold in our initial
public offering without our prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt
to block our ability to complete our initial business combination, particularly in connection with a business combination with a target
that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our shareholders
ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
6
Redemption of Public Shares and Liquidation
if No Initial Business Combination
Our amended and restated memorandum and articles
of association provide that we will have only the duration of the completion window to complete our initial business combination. If we
have not completed our initial business combination within such time 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 (and subject to lawfully available
funds therefor), 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 (which interest shall be net of taxes payable and up to
$100,000 of interest to pay dissolution expenses) and not previously released to us pursuant to permitted withdrawals, 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. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail
to complete our initial business combination within the completion window.
Our sponsor, officers and directors have entered
into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with
respect to any founder shares held by them if we fail to complete our initial business combination within the completion window, although
they will entitled to liquidating distributions from assets outside the trust account. However, if our sponsor or management team acquire
public shares in or after our initial public offering, they will be entitled to liquidating distributions from the trust account with
respect to such public shares if we fail to complete our initial business combination within the allotted completion window.
Our sponsor, officers and directors have agreed,
pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles
of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination
or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window or (B) with
respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, in each
case unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment
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 (net of taxes payable) and not previously released to us pursuant to permitted withdrawals, divided
by the number of then outstanding public shares.
Corporate Information
We are a remote-first company, meaning that all
of our team members work remotely. For purposes of compliance with applicable requirements of Securities Act of 1933, as amended (the
Securities Act), and the Exchange Act, communications may be directed to 1980 Post Oak Blvd., Suite 100, PMB 6373, Houston,
TX, 77056. Our telephone number is (214) 987-6100. We maintain a corporate website at https://dynamix-corp.com. The information that may
be contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference
in, or otherwise a part of, this report.
We are a Cayman Islands exempted company. Exempted
companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying
with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from
the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (As Revised) of the Cayman Islands, for a
period of 30 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits,
income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains
or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures
or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividends or other distribution of income or
capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
7
We are an emerging growth company,
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act).
As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public
companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find
our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities
may be more volatile.
In addition, Section 107 of the JOBS Act also
provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to
take advantage of the benefits of this extended transition period.
We will cease to be an emerging
growth company upon the earliest of:
|
| the last day of the fiscal year during which we have total
annual gross revenues of US $1,235,000,000 (as such amount is indexed for inflation every five years by the SEC) or more; |
|
|
| the last day of our fiscal year following the fifth anniversary
of the completion of our first sale of our equity securities pursuant to an effective registration statement under the Securities Act,
which is expected to be December 31, 2029, unless we change our fiscal year; |
|
|
| the date on which we have, during the previous three-year
period, issued more than US $1,000,000,000 in non-convertible debt; or |
|
|
| the date on which we are deemed to be a large accelerated
filer, as defined in Rule 12b-2 of the Exchange Act, which would occur as of the end of any fiscal year in which the market value
of our Class A ordinary shares that are held by non-affiliates exceeds US$700,000,000 as of the last day of our most recently completed
second fiscal quarter. |
|
Additionally, we are a smaller reporting
company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure
obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates is equal to
or exceeds $250 million as of the prior June 30, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal
year and the market value of our ordinary shares held by non-affiliates is equal to or exceeds $700 million as of the prior June 30.
In addition, prior to the consummation of a business
combination, only holders of our Class B ordinary shares will have the right to vote on the appointment or removal of directors. As a
result, Nasdaq will consider us to be a controlled company within the meaning of Nasdaq corporate governance standards.
Under Nasdaq corporate governance standards, a company of which more than 50% of the voting power for the appointment of directors is
held by an individual, group or another company is a controlled company and may elect not to comply with certain corporate
governance requirements. We currently do not intend to rely on the controlled company exemption, but may do so in the future.
Accordingly, if we choose to do so, you will not have the same protections afforded to shareholders of companies that are subject to all
of the Nasdaq corporate governance requirements.
8
Competition
In identifying, evaluating and selecting a target
business for our initial business combination, we may encounter competition from other entities having a business objective similar to
ours, including other special purpose acquisition companies, private equity groups and leveraged buyout funds, public companies and operating
businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting
business combinations directly or through affiliates. Moreover, many of these competitors possess similar or greater financial, technical,
human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources.
This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay
cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available to us for our
initial business combination and our issued and outstanding warrants, and the future dilution they potentially represent, may not be viewed
favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating
an initial business combination.
Facilities
We are a remote-first company, meaning that all
of our team members work remotely. For purposes of compliance with applicable requirements of Securities Act and the Exchange Act, communications
may be directed to 1980 Post Oak Blvd., Suite 100, PMB 6373, Houston, TX, 77056. We believe that our remote working operations are adequate
to meet our needs for the immediate future, and that, if necessary, suitable physical space will be available to accommodate any expansion
of our operations. We will reimburse Volta Tread LLC (Volta), an affiliate of our sponsor owned and controlled by Andrea
Bernatova and Nader Daylami, our chief executive officer and chief financial officer, in an amount equal to $30,000 per month for utilities
and secretarial and administrative support made available to us. Upon completion of our initial business combination or our liquidation,
we will cease paying these monthly fees.
Employees
We currently have two officers: Andrea Bernatova,
our chief executive officer, and Nader Daylami, our chief financial officer. These individuals are not obligated to devote any specific
number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed
our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business
has been selected for our initial business combination and the stage of the business combination process we are in. We do not intend to
have any full time employees prior to the completion of our initial business combination.
Advisory Services Agreement
On February 4, 2025, we entered into an advisory
services agreement (the advisory services agreement) with Volta, an affiliate of our sponsor owned and controlled by our
chief executive officer and chief financial officer (the service provider). Pursuant to the advisory services agreement,
the service provider will provide management, consulting and other advisory services to the Company in connection with its initial business
combination. In consideration for these services, the Company will pay to the service provider an annual fee, payable on a monthly basis,
until the consummation of a business combination. We will also reimburse the service provider and its affiliates for certain costs and
expenses incurred in favor of third parties. The annual fee, together with any reimbursement, shall not exceed the Cap. For the year ended
December 31, 2025 and 2024, the Company has paid the service provider $660,704 and $0, respectively, pursuant to the advisory services
agreement.
Periodic Reporting and Audited Financial Statements
We have registered our Units, Class A ordinary
shares and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and
current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements
audited and reported on by our independent registered public accountants.
9
We will provide shareholders with audited financial
statements of the prospective target business as part of the proxy solicitation materials or tender offer documents sent to shareholders
to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance
with, or reconciled to, accounting principles generally accepted in the United States of America (GAAP) or international
financial reporting standards as issued by the International Accounting Standards Board (IFRS), depending on the circumstances,
and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting
Oversight Board (United States) (PCAOB). These financial statement requirements may limit the pool of potential target businesses
we may conduct an initial business combination with because some targets may be unable to provide such financial statements in time for
us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the
prescribed time frame. We cannot assure you that any particular target business identified by us as a potential business combination candidate
will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business will
be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements
cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination
candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control
procedures for the fiscal year ending December 31, 2025 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a
large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our
internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such business combination.
We are an emerging growth company,
as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not emerging growth companies
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market
for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also
provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to
take advantage of the benefits of this extended transition period.
Additionally, we are a smaller reporting
company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure
obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our Class A ordinary shares held by non-affiliates equals
or exceeds $250 million as of the end of that years second fiscal quarter, or (2) our annual revenues equaled or exceeded $100
million during such completed fiscal year and the market value of our Class A ordinary shares held by non-affiliates exceeds $700 million
as of the end of that years second fiscal quarter.
10
Item 1A. Risk
Factors
**
*An investment in our securities involves a
high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in
this Annual Report, before making a decision to invest in our securities. If any of the following events occur, our business, financial
condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline,
and you could lose all or part of your investment.*
Risks Relating to our Search for, and Consummation
of or Inability to Consummate, a Business Combination
**
*Our public shareholders may not be afforded
an opportunity to vote on our proposed initial business combination (in the event that the proposed Business Combination with Ether Machine
is not consummated), and even if we hold a vote, holders of our founder shares will participate in such vote, which means we may complete
our initial business combination even though a majority of our public shareholders do not support such a combination.*
We may choose not to hold
a shareholder vote to approve our initial business combination unless the business combination would require shareholder approval under
applicable law or stock exchange listing requirements. In such case, the decision as to whether we will seek shareholder approval of a
proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our
discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction
would otherwise require us to seek shareholder approval. Even if we seek shareholder approval, the holders of our founder shares will
participate in the vote on such approval. Accordingly, we may complete our initial business combination even if holders of a majority
of our ordinary shares do not approve of the business combination we complete.
**
*If we seek shareholder
approval of our initial business combination, our initial shareholders and management team have agreed to vote in favor of such initial
business combination, regardless of how our public shareholders vote, and we may not need any public shares in addition to our founder
shares to be voted in favor of an initial business combination in order to approve an initial business combination.*
As of December 31, 2025, our
initial shareholders own 25% of our issued and outstanding ordinary shares.
Our initial shareholders and
management team also may from time to time purchase ClassA ordinary shares prior to our initial business combination. Our amended
and restated memorandum and articles of association provides that, if we seek shareholder approval of an initial business combination,
such initial business combination will be approved if we obtain the approval of an ordinary resolution under Cayman Islands law and our
amended and restated memorandum and articles of association, which requires the affirmative vote of at least a majority of the votes cast
by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting
of the Company. Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our initial shareholders
and management team to vote in favor of our initial business combination will increase the likelihood that an ordinary resolution will
be passed, being the requisite shareholder approval for such initial business combination.
**
*Our independent registered
public accounting firms report contains an explanatory paragraph that expresses substantial doubt about our ability to continue
as a going concern.*
As of December 31, 2025, we
had $223,698 in our operating bank account and a working capital deficit of $3,396,701. Further, we have incurred and expect to continue
to incur significant costs in pursuit of our financing and acquisition plans. There can be no assurances that our plans to raise capital
or to consummate an initial business combination will be successful. These factors, among others, raise substantial doubt about our ability
to continue as a going concern.
**
*Your only opportunity to effect your investment
decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.*
Since our board of directors
may complete a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to
vote on the business combination, unless we seek such shareholder vote. Accordingly, your only opportunity to effect your investment decision
regarding our initial business combination may be limited to exercising your redemption rights within the period of time (which will be
at least 20business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial
business combination. The per share amount we will distribute to shareholders who properly exercise their redemption rights will not be
reduced by the deferred underwriting commission in connection with our initial public offering and after such redemptions, the per-share
value of shares held by non-redeeming shareholders will reflect our obligation to pay such deferred underwriting commissions.
**
**
11
**
*In the event that the proposed Business
Combination with Ether Machine is not consummated, the ability of our public shareholders to redeem their shares for cash may make our
financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business
combination with another target.*
In the event that the proposed
Business Combination with Ether Machine is not consummated, we may seek to enter into a business combination transaction agreement with
a minimum cash requirement for (i)cash consideration to be paid to the target or its owners, (ii)cash for working capital
or other general corporate purposes or (iii)the retention of cash to satisfy other conditions. If too many public shareholders exercise
their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business
combination. Consequently, if accepting all properly submitted redemption requests would not allow us to satisfy a closing condition as
described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate
business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination
transaction with us.
**
*The ability of our public shareholders to
exercise redemption rights with respect to a large number of our shares and the amount of deferred underwriting compensation may not allow
us to complete the most desirable business combination or optimize our capital structure, and may substantially dilute your investment
in us.*
At the time we enter into
an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore
will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such
requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially
expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third
party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher
than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the ClassB ordinary
shares results in the issuance of ClassA ordinary shares on a greater than one-to-one basis upon conversion of the ClassB
ordinary shares at the time of our initial business combination. The above considerations may limit our ability to complete the most desirable
business combination available to us or optimize our capital structure. As a result, our obligations to redeem public shares for which
redemption is requested and to pay the deferred underwriting commissions in connection with our initial public offering may not allow
us to complete the most desirable business combination or optimize our capital structure.
In addition, raising additional
third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore,
this dilution would increase to the extent that the anti-dilution provisions of the ClassB ordinary shares result in the issuance
of ClassA ordinary shares on a greater than one-to-one basis upon conversion of the ClassB ordinary shares at the time of
our business combination. The above considerations may limit our ability to complete the most desirable business combination available
to us or optimize our capital structure and may result in substantial dilution from your purchase of our ClassA ordinary shares.
The effect of this dilution will be greater for shareholders who do not redeem. We may not be able to generate sufficient value from the
completion of our initial business combination in order to overcome the dilutive impact of these and other factors, and, accordingly,
you may incur a net loss on your investment. Please see *Risks Relating to Our SecuritiesThe
nominal purchase price paid by our sponsor for the founder shares may result in significant dilution to the implied value of your public
shares upon the consummation of our initial business combination, and our sponsor is likely to make a substantial profit on its investment
in us in the event we consummate an initial business combination, even if the business combination causes the trading price of our ordinary
shares to materially decline*.
**
*The ability of our public shareholders to
exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination
would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.*
If our initial business combination
agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business
combination is unsuccessful, you would not receive your pro rata portion of the funds in the trust account until we liquidate the trust
account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our
shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss
on your investment or lose the benefit of funds expected in connection with your exercise of redemption rights until we liquidate or you
are able to sell your shares in the open market.
**
**
12
**
*In the event that the proposed Business
Combination with Ether Machine is not consummated, the requirement that we complete our initial business combination within the completion
window may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which
to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could
undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.*
Any potential target business
with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination
within the completion window. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing
that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial
business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition,
we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected
upon a more comprehensive investigation. The length of time it may take us to complete our diligence and negotiate a business combination
may reduce the amount of time available for us to ultimately complete an initial business combination should such diligence or negotiations
not lead to a consummated initial business combination.
**
*We may engage one or more of our underwriters
of our initial public offering or one of their respective affiliates to provide additional services to us, which may include acting as
M&A advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction.
Our underwriters are entitled to receive deferred underwriting commissions that will be released from the trust account only upon a completion
of an initial business combination. These financial incentives may cause them to have potential conflicts of interest in rendering any
such additional services to us, including, for example, in connection with the sourcing and consummation of an initial business combination.*
We may engage one or more
of our underwriters or one of their respective affiliates to provide additional services to us, including, for example, identifying potential
targets, providing M&A advisory services, acting as a placement agent in a private offering or arranging debt financing transactions.
We may pay such underwriter or its affiliate fair and reasonable fees or other compensation that would be determined at that time in an
arms length negotiation.
The underwriters are also
entitled to receive deferred underwriting commissions that are conditioned on the completion of an initial business combination. The underwriters
or their respective affiliates financial interests tied to the consummation of a business combination transaction may give rise
to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection
with the sourcing and consummation of an initial business combination. The underwriters are under no obligation to provide any further
services to us in order to receive all or any part of the deferred underwriting commissions.
**
*We may not be able to complete our initial
business combination within the completion window, in which case we would redeem our public shares.*
We may not be able to complete our initial business combination, including the proposed Business Combination with
Ether Machine, within the completion window. Our ability to complete our initial business combination may be negatively impacted by
general market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not completed
our initial business combination within such time period, we will (i)cease all operations except for the purpose of winding
up, (ii)as promptly as reasonably possible but not more than tenbusiness days thereafter (and subject to lawfully
available funds therefor), 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 (which interest shall be net of taxes
payable and up to $100,000 of interest to pay dissolution expenses) and not previously released to us pursuant to permitted
withdrawals, 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. In such case, our public shareholders
may only receive $10.025 per share, or possibly less, and our warrants will expire without value to the holder. In certain
circumstances, our public shareholders may receive less than $10.025 per share on the redemption of their shares. See
*If third parties bring claims against us, the proceeds held in the trust account could be reduced and the
per-share redemption amount received by shareholders may be less than $10.025 per share* and other risk factors described
in this *Risk Factors* section.
**
**
*The consummation of the proposed Business
Combination with Ether Machine is subject to a number of conditions and if those conditions are not satisfied or waived, the Business
Combination Agreement may be terminated in accordance with its terms and the proposed transactions may not be completed.*
**
The Business Combination
Agreement is subject to a number of conditions which must be fulfilled in order to complete the proposed Business Combination. Those
conditions include, among other things: approval of certain matters by our shareholders; the consummation of the proposed transactions
not being prohibited by applicable law; effectiveness of the proxy statement/prospectus relating to the proposed Business Combination;
the shares to be issued in the proposed Business Combination having been approved for listing on Nasdaq or any other national securities
exchange; and the funding of certain private placement investments. These conditions may not be fulfilled in a timely manner or at all,
and, accordingly, the Business Combination may not be completed. In addition, we and the Seller can mutually decide to terminate the
Business Combination Agreement at any time, before or after the approval of our shareholders. For additional information regarding the
Business Combination Agreement and the transactions contemplated therein, see the Current Reports onForm8-K as filed with
the SEC by the Company on July 25, 2025, August 4, 2025, August 6, 2025, September 2, 2025 and September 9, 2025.
**
13
**
*We may decide not to extend the term we
have to consummate our initial business combination, in which case we would redeem our public shares, and the warrants may be worthless.*
We have until the date that
is 24months from the closing of our initial public offering or until such earlier liquidation date as our board of directors may
approve, to consummate our initial business combination. If we anticipate that we may be unable to consummate our initial business combination
within such period, we may seek shareholder approval to amend our amended and restated memorandum and articles of association to extend
the date by which we must consummate our initial business combination. However, we may decide not to seek to extend the date by which
we must consummate our initial business combination. If we do not seek to extend the date by which we must consummate our initial business
combination, and we are unable to consummate our initial business combination within the applicable time period, we will (i)cease
all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than tenbusiness
days thereafter (and subject to lawfully available funds therefor), 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 (which
interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses) and not previously released to us pursuant
to permitted withdrawals, 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. In such event, the warrants may be worthless.
**
*If we seek shareholder approval of our initial
business combination, our sponsor, initial shareholders, directors, officers, advisors and their affiliates may elect to purchase shares
or public warrants from public shareholders, which may influence a vote on a proposed business combination and reduce the public float
of our ClassA ordinary shares or public warrants.*
If we seek shareholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our sponsor, initial shareholders, directors, officers, advisors and their affiliates may purchase public shares
or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination, although they are under no obligation or duty to do so. Such a purchase may include a contractual acknowledgment that such
shareholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise
its redemption rights. In the event that our sponsor, initial shareholders, directors, officers, advisors and their affiliates purchase
shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such
selling shareholders would be required to revoke their prior elections to redeem their shares. It is intended that, if Rule10b-18
would apply to purchases by our sponsor, initial shareholders, directors, officers, advisors and their affiliates, then such purchases
will comply with Rule10b-18 under the ExchangeAct, to the extent it applies, which provides a safe harbor for purchases made
under certain conditions, including with respect to timing, pricing and volume of purchases.
Additionally, at any time
at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information),
our sponsor, initial shareholders, directors, officers, advisors and their affiliates may enter into transactions with investors and others
to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not
redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not
formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares,
rights or warrants in such transactions.
14
The purpose of any such transactions
could be to (1)increase the likelihood of obtaining shareholder approval of the business combination, (2)reduce the number
of public warrants outstanding and/or increase the likelihood of approval on any matters submitted to the public warrant holders for approval
in connection with our initial business combination or (3)satisfy a closing condition in an agreement with a target that requires
us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such
requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination
that may not otherwise have been possible.
In addition, if such purchases
are made, the public float of our securities may be reduced and the number of beneficial holders of our securities may be
reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities
exchange. Any such purchases will be reported pursuant to Section13 and Section16 of the ExchangeAct to the extent such
purchasers are subject to such reporting requirements. Additionally, in the event our sponsor, initial shareholders, directors, officers,
advisors and their affiliates were to purchase public shares or warrants from public shareholders after the announcement of our initial
business combination, such purchases would be structured in compliance with the requirements of Rule14e-5 under the ExchangeAct
including, in pertinent part, through adherence to the following:
|
| our registration statement/proxy statement filed for our business
combination transaction would disclose the possibility that our sponsor, initial shareholders, directors, officers, advisors and their
affiliates may purchase public shares or warrants from public shareholders outside the redemption process, along with the purpose of
such purchases; |
|
|
| if our sponsor, initial shareholders, directors, officers,
advisors and their affiliates were to purchase public shares or warrants from public shareholders, they would do so at a price no higher
than the price offered through our redemption process; |
|
|
| our registration statement/proxy statement filed for our business
combination transaction would include a representation that any of our securities purchased by our sponsor, initial shareholders, directors,
officers, advisors and their affiliates would not be voted in favor of approving the business combination transaction; |
|
|
| our sponsor, initial shareholders, directors, officers, advisors
and their affiliates would not possess any redemption rights with respect to our securities or, if they do acquire and possess redemption
rights, they would waive such rights; and |
|
|
| we would disclose in a Form8-K, before our security
holder meeting to approve the business combination transaction, the following material items: |
|
|
| the amount of our securities purchased outside of the redemption
offer by our sponsor, initial shareholders, directors, officers, advisors and their affiliates, along with the purchase price; |
|
|
| the purpose of the purchases by our sponsor, initial shareholders,
directors, officers, advisors and their affiliates; |
|
|
| the impact, if any, of the purchases by our sponsor, initial
shareholders, directors, officers, advisors and their affiliates on the likelihood that the business combination transaction will be
approved; |
|
|
| the identities of our security holders who sold to our sponsor,
initial shareholders, directors, officers, advisors and their affiliates (if not purchased on the open market) or the nature of our security
holders (e.g., 5% security holders) who sold to our sponsor, initial shareholders, directors, officers, advisors and their affiliates;
and |
|
|
| the number of our securities for which we have received redemption
requests pursuant to our redemption offer. |
|
**
**
15
**
*If a shareholder fails to receive notice
of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
submitting or tendering its shares, such shares may not be redeemed.*
We will comply with the proxy
rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our
compliance with these rules, if a shareholder fails to receive our proxy materials or tender offer documents, as applicable, such shareholder
may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that
we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures
that must be complied with in order to validly tender or submit public shares for redemption. For example, we intend to require our public
shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name,
to, at the holders option, either deliver their share certificates to our transfer agent, or to deliver their shares to our transfer
agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy
materials, this date may be up to twobusiness days prior to the scheduled vote on the proposal to approve the initial business combination.
In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder seeking redemption
of its public shares to also submit a written request for redemption to our transfer agent twobusiness days prior to the scheduled
vote in which the name of the beneficial owner of such shares is included. In the event that a shareholder fails to comply with these
or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed.
**
*You will not be entitled to protections
normally afforded to investors of other blank check companies subject to Rule419 of the Securities Act.*
Since the net proceeds of
our initial public offering and the sale of the private placement warrants are intended to be used to complete one or more initial business
combinations with a target business or businesses that have not been selected, we may be deemed to be a blank check company
under the UnitedStates securities laws. However, because we have net tangible assets in excess of $5,000,000, we are exempt from
rules promulgated by the SEC to protect investors in blank check companies, such as Rule419. Accordingly, investors will not be
afforded the benefits or protections of those rules. Among other things, this means we will have a longer period of time to complete our
respective business combinations than do companies subject to Rule419. Moreover, if our initial public offering were subject to
Rule419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the
funds in the trust account were released to us or in connection with our completion of an initial business combination.
**
*If we seek shareholder approval of our initial
business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a group of shareholders
are deemed to hold in excess of 15% of our ClassA ordinary shares, you may lose the ability to redeem all such shares in excess
of 15% of our ClassA ordinary shares.*
If we seek shareholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with
any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as
defined under Section13 of the ExchangeAct), will be restricted from redeeming its shares with respect to more than an aggregate
of 15% of our Class A ordinary shares, which we refer to as the Excess Shares, without our prior consent. However, we would
not be restricting our shareholders ability to vote all of their shares (including Excess Shares) for or against our initial business
combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination
and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you
will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a
result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell
your shares in open market transactions, potentially at a loss.
**
**
16
**
*Because of our limited resources and the
significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination.
If we are unable to complete our initial business combination, our public shareholders may receive only their pro rata portion of the
funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.*
We expect to encounter competition
from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar or greater
technical, human and other resources to ours or more local industry knowledge than we do and our financial resources will be relatively
limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially
acquire, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial
business combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce
the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage
in successfully negotiating a business combination. If we are unable to complete our initial business combination, our public shareholders
may receive only their pro rata portion of the funds in the trust account that are available for distribution to public shareholders,
and our warrants will expire worthless.
**
*If our funds held outside the trust account
are insufficient to allow us to operate for at least the duration of the completion window, it could limit the amount available to fund
our search for a target business or businesses and complete our initial business combination, and we will depend on permitted withdrawals
and loans from our sponsor or management team to fund our search, to pay taxes and to complete our initial business combination.*
As of December 31, 2025, we
have approximately $223,698 available to us outside the trust account to fund our working capital requirements. Of the funds available
to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business.
We could also use a portion of the funds as a down payment or to fund a no-shop provision (a provision in letters of intent
or merger agreements designed to keep target businesses from shopping around for transactions with other companies or investors
on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have
any current intention to do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity
from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might
not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
Our permitted withdrawals
are subject to an annual limit of 10% of interest earned on funds held in the trust account. In addition, neither our sponsor, members
of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Prior to the
completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of
our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek
access to funds in our trust account. If we are unable to complete our initial business combination because we do not have sufficient
funds available to us, we will be forced to liquidate the trust account. Consequently, our public shareholders may only receive an estimated
$10.025 per share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless.
**
**
17
**
*If third parties bring claims against us,
the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than
$10.025 per share.*
Our placing of funds in the
trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers,
prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest
or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute
such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including,
but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds
held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account,
our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with
such third party if management believes that such third partys engagement would be in the best interests of the Company under the
circumstances. WithumSmith+Brown, PC, our independent registered public accounting firm, and the underwriters of our initial public offering
will not execute agreements with us waiving such claims to the monies held in the trust account.
Examples of possible instances
where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular
expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute
a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we
are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in
connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived
that may be brought against us within the 10years following redemption. Accordingly, the per-share redemption amount received by
public shareholders could be less than the $10.025 per public share initially held in the trust account, due to claims of such creditors.
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products
sold to us (except for the Companys independent registered public accounting firm), or a prospective target business with which
we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce
the amount of funds in the trust account to below the lesser of (i)$10.025 per public share and (ii)the actual amount per
public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.025 per public share due
to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third
party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not
such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against
certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification
obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe
that our sponsors only assets are securities of our Company. Therefore, we cannot assure you that our sponsor would be able to
satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our
initial business combination and redemptions could be reduced to less than $10.025 per public share. In such event, we may not be able
to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of
your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims
by vendors and prospective target businesses.
**
*Our directors may decide not to enforce
the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution
to our public shareholders.*
In the event that the proceeds
in the trust account are reduced below the lesser of (i)$10.025 per public share and (ii)the actual amount per public share
held in the trust account as of the date of the liquidation of the trust account if less than $10.025 per public share due to reductions
in the value of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy his obligations
or that he has no indemnification obligations related to a particular claim, our independent directors would determine whether to take
legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance
if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable
or if the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce these
indemnification obligations, the amount of funds in the trust account available for distribution to our public shareholders may be reduced
below $10.025 per public share.
**
**
18
**
*We may not have sufficient funds to satisfy
indemnification claims of our directors and officers.*
We have agreed to indemnify
our officers and directors to the fullest extent permitted by law, including for any liability incurred in their capacities as such, except
through their own actual fraud, willful default or willful neglect. However, our officers and directors have agreed to waive any right,
title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any
reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly,
any indemnification provided will be able to be satisfied by us only if (i)we have sufficient funds outside of the trust account
or (ii)we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders
from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect
of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might
otherwise benefit us and our shareholders. Furthermore, a shareholders investment may be adversely affected to the extent we pay
the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
**
*If, after we distribute the proceeds in
the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition
is filed against us that is not dismissed, a liquidator or a bankruptcy, insolvency or other court may seek to recover such proceeds,
and the members of our board of directors may be viewed as having breached their fiduciary duties to us or our creditors, thereby exposing
the members of our board of directors and us to claims of punitive damages.*
If, after we distribute the
proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or
winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable
debtor/creditor and/or bankruptcy/insolvency laws as either a preferential transfer or a fraudulent conveyance, preference
or disposition. As a result, a liquidator or a bankruptcy, insolvency or other court could seek to recover some or all amounts
received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to us or our creditors
and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public shareholders from the
trust account prior to addressing the claims of creditors.
**
*If, before distributing the proceeds in
the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition
is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders
and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.*
If, before distributing the
proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or
winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy
or insolvency law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority
over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the trust account, the per-share amount
that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
**
*Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
business combination, and results of operations.*
We are subject to laws and
regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal
requirements and numerous complex tax laws. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time
consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those
changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply
with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability
to negotiate and complete our initial business combination, and results of operations.
19
On January24, 2024,
the SEC adopted a series of new rules relating to SPACs (the SPAC Rules) requiring, among other items, (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 de-SPAC transactions; (iii)the use
of projections by SPACs in SEC filings in connection with proposed business combination transactions; and (iv)both the SPAC and
the target companys status as co-registrants on de-SPAC registration statements.
In addition, the SECs
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.
Compliance with the SPAC Rules
and related guidance may increase the costs of and the time needed to negotiate and complete an initial business combination and may constrain
the circumstances under which we could complete an initial business combination.
**
*If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.*
As described in the risk factor
above entitled Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business,
including our ability to negotiate and complete our initial business combination, and results of operations, the SECs adopting
release with respect to the SPAC Rules provided guidance describing the extent to which SPACs could become subject to regulation under
the Investment Company Act and the regulations thereunder. Whether a SPAC is an investment company will be a question of facts and circumstances.
If our facts and circumstances change over time, we will update our disclosure to reflect how those changes impact the risk that we may
be considered to be operating as an unregistered investment company. We can give no assurance that a claim will not be made that we have
been operating as an unregistered investment company.
If we are deemed to be an
investment company under the Investment Company Act, we may have to change our operations, wind down our operations, or register as an
investment company under the Investment Company Act. Our activities may be restricted, including:
|
| restrictions on the nature of our investments; and |
|
|
| restrictions on the issuance of securities, each of which
may make it difficult for us to complete our initial business combination. |
|
In addition, we may have imposed
upon us burdensome requirements, including:
|
| registration as an investment company; |
|
|
| adoption of a specific form of corporate structure; and |
|
|
| reporting, record keeping, voting, proxy and disclosure requirements
and other rules and regulations. |
|
In order not to be regulated
as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged
primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting,
owning, holding or trading investment securities constituting more than 40% of our total assets (exclusive of U.S.government
securities and cash items) on an unconsolidated basis. We are mindful of the SECs investment company definition and guidance and
intend to identify and complete an initial business combination with an operating business, and not with an investment company, or to
acquire investment securities in other businesses exceeding the permitted threshold.
20
We do not believe that our
activities subject us to the Investment Company Act. To this end, the proceeds held in the trust account were initially invested only
in U.S.government treasury obligations with a maturity of 185days or less or in money market funds meeting certain conditions
under Rule2a-7 under the Investment Company Act which invest only in direct U.S.government treasury obligations; the holding
of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended business combination. To
mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases
the longer that we hold investments in the trust account, we may, at any time instruct the trustee to liquidate the investments held in
the trust account and instead to hold the funds in the trust account in cash or in an interest bearing demand deposit account at a bank.
Pursuant to the trust agreement,
the trustee is not permitted to invest in securities or assets other than as described above. By restricting the investment of the proceeds
to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying
and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an investment
company within the meaning of the Investment Company Act. The trust account is intended solely as a temporary depository for funds
pending the earliest to occur of: (i)the completion of our initial business combination; (ii)the redemption of any public
shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association
(A)in a manner that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete
our initial business combination within the completion window; or (B)with respect to any other provision relating to the rights
of holders of our ClassA ordinary shares or pre-initial business combination activity; or (iii)absent an initial business
combination within the completion window, from the closing of our initial public offering, our return of the funds held in the trust account
to our public shareholders as part of our redemption of the public shares.
We are aware of litigation
claiming that certain SPACs should be considered to be investment companies. Although we believe that these claims were without merit,
we cannot guarantee that we will not be deemed to be an investment company and thus subject to the Investment Company Act. If we were
deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses
for which we have not allotted funds and may hinder our ability to complete an initial business combination or may result in our winding
down our operations and our liquidation. If we are unable to complete our initial business combination, our public shareholders may receive
only approximately $10.025 per share on the liquidation of our trust account and our warrants will expire worthless, and our public shareholders
would also lose the possibility of an investment opportunity in a target company as well as any potential price appreciation in the combined
company following a business combination.
**
*To mitigate the risk that we might be deemed
to be an investment company for purposes of the Investment Company Act, we may, at any time (based on our management teams ongoing
assessment of all factors related to our potential status under the Investment Company Act), instruct the trustee to liquidate the investments
held in the trust account and instead to hold the funds in the trust account in an interest bearing demand deposit account at a bank until
the earlier of the consummation of an initial business combination or our liquidation. As a result, following the liquidation of investments
in the trust account, we will likely receive less interest on the funds held in the trust account than we would have had the trust account
remained as initially invested, such that our public shareholders would receive less upon any redemption or liquidation of the Company
than what they would have received had the investments not been liquidated.*
The funds held in the trust
account were initially held only in U.S.government treasury obligations with a maturity of 185days or less, in money market
funds investing solely in U.S.government treasury obligations and meeting certain conditions under Rule2a-7 under the Investment
Company Act and in cash or cash like items (including demand deposit accounts) at a bank. However, to mitigate the risk of us being deemed
to be an unregistered investment company (including under the subjective test of Section3(a)(1)(A)of the Investment Company
Act) and thus subject to regulation under the Investment Company Act, we may, at any time (based on our management teams ongoing
assessment of all factors related to our potential status under the Investment Company Act), instruct Odyssey Transferand Trust
Company, the trustee with respect to the trust account, to liquidate the U.S.government treasury obligations or money market funds
held in the trust account and thereafter to hold all funds in the trust account in an interest bearing demand deposit account at a bank
until the earlier of the consummation of our initial business combination or our liquidation. Following such liquidation, we will likely
receive less interest on the funds held in the trust account than we would earn if the trust account remained invested in U.S.government
treasury obligations with a maturity of 185days or less or in money market funds investing solely in U.S.government treasury
obligations and meeting certain conditions under Rule2a-7 under the Investment Company Act. However, interest previously earned
on the funds held in the trust account still may be released to us to pay our taxes, if any, and certain other expenses as permitted.
As a result, any decision to liquidate the investments held in the trust account and thereafter to hold all funds in the trust account
in an interest-bearing demand deposit at a bank could reduce the dollar amount our public shareholders would receive upon any redemption
or liquidation of the Company as compared to what they would have received had the investments not been so liquidated.
21
In addition, we may
still be deemed to be an investment company. The longer that the funds in the trust account are held in short-term
U.S.government treasury obligations or in money market funds invested exclusively in such securities, the greater the risk
that we may be deemed to be an unregistered investment company, in which case we may be required to liquidate. If our facts and
circumstances change over time, we will update our disclosure to reflect how those changes impact the risk that we may be considered
to be operating as an unregistered investment company. As disclosed above, we may determine, in our discretion, to liquidate between
the securities held in the trust account at any time and instead hold all funds in the trust account in an interest bearing demand
deposit account or as cash or cash items at a bank, which could further reduce the dollar amount our public shareholders would
receive upon any redemption or liquidation of the Company as compared to what they would have received had the investments not been
so liquidated. Were we to liquidate the Company, our warrants would expire worthless, and our securityholders would lose the
investment opportunity associated with an investment in the target company with which we could have consummated an initial business
combination. In addition, upon moving the funds from the trust account to a deposit account, we will maintain the cash items in bank
accounts which, at times, may exceed federally insured limits as guaranteed by the FDIC.While we intend to place our deposits
in high-quality banks, only a small portion of the funds in our trust account will be guaranteed by the FDIC.
**
*Our search for a business combination, and
any target business with which we ultimately consummate a business combination, may be materially adversely affected by the status of
debt and equity markets.*
Our ability to consummate
a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by certain events, including as
a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to
us or at all.
**
*Our search for an initial business combination,
and any target business with which we may ultimately consummate an initial business combination, may be materially adversely affected
by current global geopolitical conditions resulting from the ongoing Russia-Ukraine conflict, the recent escalation of conflict in
the Middle East and Southwest Asia and the potential for an extended regional war in the Middle East.*
UnitedStates and
global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing
Russia-Ukraine conflict and the recent escalation of conflict in the Middle East and Southwest Asia. In response to the ongoing
Russia-Ukraine conflict, the North Atlantic Treaty Organization (NATO) deployed additional military forces to eastern
Europe, and the UnitedStates, the United Kingdom, the European Union and other countries have announced various sanctions and
restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial
institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. Certain countries,
including the UnitedStates, have also provided and may continue to provide military aid or other assistance to Ukraine and to
Israel, or have undertaken or will undertake military strikes in Southwest Asia, increasing geopolitical tensions among a number of
nations. The invasion of Ukraine by Russia and the escalation of conflict in the Middle East, including the recent conflict between
Iran and Israel and the United States military actions against Iran, and Southwest Asia and the resulting measures that have been
taken, and could be taken in the future, by NATO, the UnitedStates, the United Kingdom, the European Union, Israel and its
neighboring states and other countries have created global security concerns that could result in an extended regional war or have a
lasting impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable,
they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as
supply chain interruptions and increased cyber-attacks against U.S.companies. Additionally, any resulting sanctions could
adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.
Any of the abovementioned
factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian
invasion of Ukraine, the escalation of conflict in the Middle East and Southwest Asia and subsequent sanctions or related actions, may
lead to increased volume and price volatility for publicly traded securities or could adversely affect our search for an initial business
combination by adversely affecting the operations or financial condition of potential target companies, any of which could make it more
difficult for us to identify a business combination target and consummate an initial business combination on acceptable commercial terms,
or at all.
22
The extent and duration of
the ongoing conflicts, resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly
if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations
on a global scale. Any such disruptions may also have the effect of heightening many of the other risks described in this section. If
these disruptions or other matters of global concern continue for an extensive period of time, our ability to consummate an initial business
combination may be materially adversely affected.
**
*Adverse global conditions,
including economic uncertainty, may negatively impact our search for an initial business combination, and any target business with which
we may ultimately consummate an initial business combination.*
Global conditions, dislocations
in the financial markets, any negative financial impacts affecting United States corporations as a result of tax reform or changes to
existing trade agreements or tax conventions, or inflation, could adversely impact our ability to consummate a business combination. The
global macroeconomic environment could be negatively affected by, among other things, increased U.S. trade tariffs and trade disputes
with other countries, instability in the global credit markets, supply chain weaknesses, and instability in global economic markets.
President Trump has announced
plans to impose broad-based tariffs on imports from many countries, including Mexico, Canada, countries of the European Union, China and
Japan. Furthermore, President Trumps other intended reforms, including reducing the corporate tax rate, repealing green energy
tax credits, and extending certain provisions of the Tax Cuts and Jobs Act of 2017, could contribute to increases in market interest rates
and a decrease in U.S. economic growth. It is impossible to predict with any precision the effects that new policies and reforms would
have on the United States and global economy, although we expect the impact could be significant.
**
*If we are unable to consummate our initial
business combination within the completion window, our public shareholders may be forced to wait beyond 24months before redemption
from our trust account.*
If we are unable to consummate
our initial business combination within the completion window, the proceeds then on deposit in the trust account, including interest earned
on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution
expenses) and not previously released to us pursuant to permitted withdrawals, will be used to fund the redemption of our public shares,
as further described herein. Any redemption of public shareholders from the trust account will be effected automatically by function of
our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required to wind-up, liquidate
the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding
up, liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case, investors may be forced
to wait beyond the end of the completion window before the redemption proceeds of our trust account become available to them, and they
receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors
prior to the date of our redemption or liquidation unless we consummate our initial business combination prior thereto and only then in
cases where investors have sought to redeem their public shares. Only upon our redemption or any liquidation will public shareholders
be entitled to distributions if we are unable to complete our initial business combination. Our amended and restated memorandum and articles
of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we
will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more
than tenbusiness days thereafter, subject to applicable Cayman Islands law.
**
**
23
**
*Our shareholders may be held liable for
claims by third parties against us to the extent of distributions received by them upon redemption of their shares.*
If we are forced to enter
into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that
immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course
of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors
may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves
and our Company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot
assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully
authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall
due in the ordinary course of business would be guilty of an offence and may be liable to a fine of $18,293 and to imprisonment for fiveyears
in the Cayman Islands.
**
*We may not hold an annual general meeting
until after the consummation of our initial business combination, which could delay the opportunity for our public shareholders to discuss
company affairs with management, and the holders of our ClassA ordinary shares will not have the right to vote on the appointment
or removal of directors or continuing the Company in a jurisdiction outside the Cayman Islands until after the consummation of our initial
business combination.*
In accordance with Nasdaq
corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end
following our listing on Nasdaq. There is no requirement under the Companies Act for us to hold annual or extraordinary general meetings
to appoint directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to discuss Company
affairs with management. In addition, as holders of our ClassA ordinary shares, our public shareholders will not have the right
to vote on the appointment or removal of directors or continuing the Company in a jurisdiction outside the Cayman Islands until after
the consummation of our initial business combination.
**
*The warrants may become exercisable and
redeemable for a security other than the ClassA ordinary shares, and you will not have any information regarding such other security
at this time.*
In certain situations, including
if we are not the surviving entity in our initial business combination, the warrants may become exercisable for a security other than
the ClassA ordinary shares. As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement,
you may receive a security in a company of which you do not have information at this time. Pursuant to the warrant agreement, the surviving
company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within
20business days of the closing of an initial business combination.
**
*In the event that the proposed Business
Combination with Ether Machine is not consummated, we will not be limited to evaluating a target business in a particular industry sector,
and you will be unable to ascertain the merits or risks of any particular target businesss operations.*
In the event that the proposed
Business Combination with Ether Machine is not consummated, our efforts to identify a prospective initial business combination target
will not be not limited to a particular industry, sector or geographic region. While we may pursue an initial business combination opportunity
in any industry or sector, we intend to capitalize on the ability of our management team to identify and acquire a business or businesses
that can benefit from our management teams established global relationships and operating experience. Our management team has extensive
experience in identifying and executing strategic investments globally and has done so successfully in a number of sectors. Our amended
and restated memorandum and articles of association prohibits us from effectuating a business combination solely with another blank check
company or similar company with nominal operations.
In the event that the proposed
Business Combination with Ether Machine is not consummated, there may be no basis to evaluate the possible merits or risks of any particular
target businesss operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete
our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For
example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be
affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. In recentyears,
a number of target businesses have underperformed financially post-business combination. There are no assurances that the target business
with which we consummate our initial business combination will perform as anticipated. Although our officers and directors will endeavor
to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of
the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside
of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment,
if such opportunity were available, in a business combination target. Accordingly, any shareholders who choose to remain shareholders
following the business combination could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a
remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers
or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities
laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable
material misstatement or material omission.
**
24
*We may seek business combination opportunities
in industries or sectors that may be outside of our managements areas of expertise.*
We will consider a business
combination outside of our managements areas of expertise if a business combination candidate is presented to us and we determine
that such candidate offers an attractive business combination opportunity for our Company. Although our management will endeavor to evaluate
the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess
all of the significant risk factors. We also cannot assure you that an investment in our securities will not ultimately prove to be less
favorable than a direct investment, if an opportunity were available, in a business combination candidate. In the event we elect to pursue
a business combination outside of the areas of our managements expertise, our managements expertise may not be directly
applicable to its evaluation or operation, and the information contained herein regarding the areas of our managements expertise
would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to ascertain
or assess adequately all of the relevant risk factors. Accordingly, any shareholders who choose to remain shareholders following our initial
business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction
in value.
**
*Although we have identified general criteria
and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination
with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
business combination may not have attributes entirely consistent with our general criteria and guidelines.*
Although we have identified
general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter
into our initial business combination will not have all of these positive attributes. If we complete our initial business combination
with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business
that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target
that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may
make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain
amount of cash. In addition, if shareholder approval of the transaction is required by applicable law or stock exchange listing requirements,
or we decide to obtain shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder approval
of our initial business combination if the target business does not meet our general criteria and guidelines. If we have not completed
our initial business combination within the completion window, our public shareholders may only receive their pro rata portion of the
funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
**
*We are not required to obtain an opinion
from an independent accounting or investment banking firm or from another independent entity that commonly renders valuation opinions,
and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders
from a financial point of view.*
Unless we complete our initial
business combination with a company that is affiliated with our sponsor, officers or directors (or their respective affiliates or related
entities), we are not required to obtain an opinion from an independent investment banking firm or another independent firm that commonly
renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm that our initial business
combination is fair to our Company from a financial point of view. If no opinion is obtained, our shareholders will be relying on the
judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community.
Such standards used will be disclosed in our proxy materials or tender offer documents, as applicable, related to our initial business
combination; provided that such conversion of founder shares will never occur on a less than one-for-one basis.
**
**
25
**
*We may issue additional ClassA ordinary
shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial
business combination. We may also issue ClassA ordinary shares upon the conversion of the founder shares at a ratio greater than
one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained therein. Any such issuances
would dilute the interest of our shareholders and likely present other risks.*
Our amended and restated memorandum
and articles of association authorizes the issuance of up to 500,000,000 ClassA ordinary shares, par value $0.0001 per share, 50,000,000
ClassB ordinary shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share. As of December
31, 2025, there are 483,400,000 and 44,250,000 authorized but unissued ClassA ordinary shares and ClassB ordinary shares,
respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding
warrants or shares issuable upon conversion of the ClassB ordinary shares. The ClassB ordinary shares are automatically convertible
into ClassA ordinary shares (which such ClassA ordinary shares issued upon conversion will not have any redemption rights
or be entitled to liquidating distributions from the trust account if we fail to consummate an initial business combination) concurrently
with or immediately following the consummation of our initial business combination or at any time prior thereto at the option of the holder,
initially at a one-for-one ratio but subject to adjustment as set forth herein and in our amended and restated memorandum and articles
of association, including in certain circumstances in which we issue ClassA ordinary shares or equity-linked securities related
to our initial business combination. There are currently no preference shares issued and outstanding.
We may issue a substantial
number of additional ClassA ordinary shares or preference shares to complete our initial business combination or under an employee
incentive plan after completion of our initial business combination. We may also issue ClassA ordinary shares upon conversion of
the ClassB ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the
anti-dilution provisions as set forth therein. Such issuance of additional ordinary or preference shares could involve costs to us and
our shareholders that would not otherwise be incurred in a traditional initial public offering, including but not limited to:
|
| significant dilution of the equity interest of investors, which dilution would increase if the anti-dilution
provisions in the ClassB ordinary shares resulted in the issuance of ClassA ordinary shares on a greater than one-to-one basis
upon conversion of the ClassB ordinary shares; | |
|
| subordination of the rights of holders of ClassA ordinary shares if preference shares are issued
with rights senior to those afforded our ClassA ordinary shares; | |
|
| additional costs involved in registering the resale of the securities being sold in any PIPE transactions
and potential additional downward pressure on our share price due to the ability of investors in such PIPE transactions being able to
sell their securities after registration; | |
|
| potential change in control if a substantial number of ClassA ordinary shares are issued, which
may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation
or removal of our present officers and directors; | |
|
| potential delaying or preventing of a change of control of us by diluting the share ownership or voting
rights of a person seeking to obtain control of us; and | |
|
| adverse impact on prevailing market prices for our units, ClassA ordinary shares and/or warrants. | |
26
In addition, issuances of
additional ordinary or preference share may not result in adjustment to the exercise price of our warrants. Such issuances may be structured
in a way intended to provide a return on investment to the investors in return for funds facilitating the completion of the business combination
or providing additional liquidity to the post-business combination company.
**
*Unlike some other similarly structured special
purpose acquisition companies, our initial shareholders will receive additional ClassA ordinary shares if we issue certain shares
to consummate an initial business combination in order to provide anti-dilution protection to our initial shareholders.*
The founder shares will automatically
convert into ClassA ordinary shares concurrently with or immediately following the consummation of our initial business combination
or at any time prior thereto at the option of the holder on a one-for-one basis, subject to adjustment for share sub-divisions, share
capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that
additional ClassA ordinary shares, or any other equity-linked securities, are issued or deemed issued in excess of the amounts sold
in our initial public offering and related to or in connection with the closing of the initial business combination, the ratio at which
ClassB ordinary shares convert into ClassA ordinary shares will be adjusted (unless the holders of a majority of the outstanding
ClassB ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of
ClassA ordinary shares issuable upon conversion of all ClassB ordinary shares will equal, in the aggregate, 25% of the sum
of (i)the total number of all ClassA ordinary shares outstanding upon the completion of our initial public offering (including
any ClassA ordinary shares issued pursuant to the underwriters over-allotment option and excluding the ClassA ordinary
shares underlying the private placement warrants issued to the sponsor and the underwriters), plus (ii)all ClassA ordinary
shares and equity-linked securities issued or deemed issued in connection with our initial business combination (excluding any shares
or equity-linked securities issued, or to be issued, to any seller in the initial business combination and any private placement-equivalent
warrants issued to our sponsor or any of its affiliates or to our officers and directors upon conversion of working capital loans) minus
(iii)any redemptions of ClassA ordinary shares by public shareholders in connection with an initial business combination.
The purpose of such adjustment to provide anti-dilution protection to our initial shareholders.
**
*We may issue our shares to investors in
connection with our initial business combination at a price which is less than the prevailing market price of our shares at that time.*
In connection with our initial
business combination, we may issue shares to investors in private placement transactions (so-called PIPE transactions) at a price of $10.025
per share or lower, at a price that approximates the per-share amounts in our trust account at such time. The purpose of such issuances
will be to enable us to provide sufficient liquidity and capital to the post-business combination entity. The price of the shares we issue
may therefore be less, and potentially significantly less, than the market price for our shares at such time. Any such issuances of equity
securities could dilute the interests of our existing shareholders.
**
*Since only holders of our ClassB ordinary
shares will have the right to vote on the appointment of directors, upon the listing of our shares on Nasdaq, Nasdaq will consider us
to be a controlled company within the meaning of Nasdaq rules and, as a result, we may qualify for exemptions from certain
corporate governance requirements.*
Prior to the consummation
of a business combination, only holders of our ClassB ordinary shares will have the right to vote on the appointment of directors.
As a result, Nasdaq will consider us to be a controlled company within the meaning of Nasdaq corporate governance standards.
Under Nasdaq corporate governance standards, a company of which more than 50% of the voting power for the appointment of directors is
held by an individual, group or another company is a controlled company and may elect not to comply with certain corporate
governance requirements, including the requirements that:
|
| we have a board that includes a majority of independent directors, as defined under the
rules of Nasdaq; and | |
|
| we have a compensation committee of our board that is comprised entirely of independent directors with
a written charter addressing the committees purpose and responsibilities. | |
We currently do not rely on
the controlled company exemption, but may do so in the future. Accordingly, if we choose to do so, you will not have the
same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.
**
27
*Resources could be wasted in researching
business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial business combination, our public shareholders may only receive their pro
rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire
worthless.*
We anticipate that the investigation
of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments
will require substantial management time and attention and substantial costs for accountants, attorneys, consultants and others. If we
decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely
would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial
business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related
costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we
are unable to complete our initial business combination within the completion window, our public shareholders may only receive their pro
rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire
worthless.
**
*We may engage in a business combination
with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors
or existing holders which may raise potential conflicts of interest.*
In light of the involvement
of our sponsor, its managing member, and our officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with or competitive with our sponsor, officers, directors and their respective affiliates or existing holders. Our directors
also serve as officers and/or board members for other entities, including, without limitation, those described under Item 10.*Directors,
Executive Officers and Corporate Governance.* Our sponsor, officers and directors may sponsor, form or participate in other blank check
companies similar to ours during the period in which we are seeking an initial business combination. Such entities may compete with us
for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for
us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions
concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any
transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria
for a business combination and such transaction was approved by a majority of our independent and disinterested directors. Despite our
obligation to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation
opinions for the type of company we are seeking to acquire or from an independent accounting firm regarding the fairness to our Company
from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor,
officers or directors (or their respective affiliates or related entities), potential conflicts of interest still may exist and, as a
result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts
of interest.
**
*Since our sponsor, officers and directors,
any other holder of our founder shares, and the underwriters may lose their entire investment in us if our initial business combination
is not completed (other than with respect to public shares acquired during or after our initial public offering), a conflict of interest
may arise in determining whether a particular business combination target is appropriate for our initial business combination.*
On June18, 2024, our
sponsor paid $25,000, or approximately $0.004 per share, to cover certain of our offering costs in exchange for 5,750,000 founder shares.
Prior to the initial investment
in the Company of $25,000 by the sponsor, the Company had no assets, tangible or intangible. The purchase price of the founder shares
was determined by dividing the amount of cash contributed to the Company by the number of founder shares issued. The number of founder
shares outstanding was determined based on the expectation that such founder shares would represent 25% of the outstanding shares after
our initial public offering. The founder shares will be worthless if we do not complete an initial business combination, except to the
extent they receive liquidating distributions from assets outside of the trust account. In addition, our sponsor and the underwriters
purchased an aggregate of 5,985,000 private placement warrants, for an aggregate purchase price of $5,985,000 or $1.00 per warrant. If
we do not complete an initial business combination within the completion window, the private placement warrants will be worthless. The
personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target business
combination, completing an initial business combination and influencing the operation of the business following the initial business combination.
This risk may become more acute as the end of the completion window nears, which is the deadline for our completion of an initial business
combination, unless such completion window is extended as described herein.
**
**
28
**
*We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our shareholders investment in us.*
Although we have no commitments
as of the date of this Annual Report to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose
to incur substantial debt to complete our initial business combination. The incurrence of debt could have a variety of negative effects,
including:
|
| default and foreclosure on our assets if our operating revenues after an initial business combination
are insufficient to repay our debt obligations; | |
|
| acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments
when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation
of that covenant; | |
|
| our immediate payment of all principal and accrued interest, if any, if the debt security is payable on
demand; | |
|
| our inability to obtain necessary additional financing if the debt security contains covenants restricting
our ability to obtain such financing while the debt security is outstanding; | |
|
| using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce
the funds available for expenses, capital expenditures, acquisitions and other general corporate purposes; | |
|
| limitations on our flexibility in planning for and reacting to changes in our business and in the industry
in which we operate; | |
|
| increased vulnerability to adverse changes in general economic, industry and competitive conditions and
adverse changes in government regulation; and | |
|
| limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,
debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less
debt. | |
**
*We may only be able to complete one business
combination with the proceeds of our initial public offering and the sale of the private placement warrants, which will cause us to be
solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively
impact our operations and profitability. The net proceeds from our initial public offering and the private placement of warrants provided
us with $166,415,000 that we may use to complete our initial business combination.*
We may effectuate our initial
business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial business combination with more than one target business because of various factors, including
the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that
present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By
completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic,
competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different
industries or different areas of a single industry. Accordingly, the prospects for our success may be:
|
| solely dependent upon the performance of a single business, property or asset, or | |
|
| dependent upon the development or market acceptance of a single or limited number of products, processes
or services. | |
29
This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon
the particular industry in which we may operate subsequent to our initial business combination.
**
*We may attempt to simultaneously complete
business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and
give rise to increased costs and risks that could negatively impact our operations and profitability.*
If we determine to simultaneously
acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay
our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including
additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers)
and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies
in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results
of operations.
**
*We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in a business combination with a company
that is not as profitable as we suspected, if at all.*
In pursuing our business combination
strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally
exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination
on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected,
if at all.
**
*We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which
a substantial majority of our shareholders do not agree.*
Our amended and restated memorandum
and articles of association will not provide a specified maximum redemption threshold. Our proposed initial business combination may impose
a minimum cash requirement for (i)cash consideration to be paid to the target or its owners, (ii)cash for working capital
or other general corporate purposes or (iii)the retention of cash to satisfy other conditions. As a result, we may be able to complete
our initial business combination even though a substantial majority of our public shareholders do not agree with the transaction and have
redeemed their shares. In the event the aggregate cash consideration we would be required to pay for all public shares that are validly
submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination
exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all public shares
submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
**
**
30
**
*In order to effectuate an initial business
combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing
instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated memorandum
and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business combination
that our shareholders or warrant holders, as applicable, may not support.*
In order to effectuate a business
combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and governing
instruments, including their warrant agreements. For example, special purpose acquisition companies have extended the time to consummate
an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged
for cash and/or other securities. Amending our amended and restated memorandum and articles of association will require the approval of
a special resolution under Cayman Islands law, which requires the affirmative vote of at least two-thirds (or, in the scenarios described
below, 90%) of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy
at the applicable general meeting of the Company, and amending our warrant agreement will require a vote of holders of at least 50% of
the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant
agreement with respect to the private placement warrants (including, for the avoidance of doubt, the forfeiture or cancellation of any
private placement warrants or working capital warrants), 50% of the then outstanding private placement warrants (including, the vote or
written consent of the underwriters). In addition, our amended and restated memorandum and articles of association requires us to provide
our public shareholders with the opportunity to redeem their public shares, regardless of whether they abstain, vote for, or against,
our initial business combination, for cash if we propose an amendment to our amended and restated memorandum and articles of association
(A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or
to redeem 100% of our public shares if we do not complete an initial business combination within the completion window or (B)with
respect to any other material provisions relating to shareholders rights or pre-initial business combination activity. Many SPACs
have faced delisting of their securities following redemptions of shares by public shareholders in connection with proposed amendments
to their corporate charters since, after redeeming a large number of publicly held shares, they no longer meet the continued listing requirements
of the stock exchange. To the extent any of such amendments would be deemed to fundamentally change the nature of the securities offered
through this registration statement, we would register, or seek an exemption from registration for, the affected securities. We cannot
assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination
in order to effectuate our initial business combination.
**
*The provisions of our amended and restated
memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions of the agreement
governing the release of funds from our trust account) may be amended with the approval of holders of not less than two-thirds of our
ordinary shares which are represented in person or by proxy and are voted at a general meeting of the Company, which is a lower amendment
threshold than that of some other special purpose acquisition companies. It may be easier for us, therefore, to amend our amended and
restated memorandum and articles of association to facilitate the completion of an initial business combination that some of our shareholders
may not support.*
Our amended and restated memorandum
and articles of association provide that any of its provisions related to pre-business combination activity (including the requirement
to deposit proceeds of our initial public offering and the private placement of warrants into the trust account and not release such amounts
except in specified circumstances, and to provide redemption rights to public shareholders, and other than amendments relating to the
provisions regulating the appointment and removal of directors and continuing the company in a jurisdiction outside the Cayman Islands,
which require the approval of a special resolution passed by the affirmative vote of at least 90% (or, where such amendment is proposed
in respect of the consummation of our initial business combination, two-thirds) of the votes cast by such shareholders as, being entitled
to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company) may be amended if approved
by special resolution under Cayman Islands law. Except as specified above with respect to matters requiring a 90% majority, a special
resolution requires the affirmative vote of at least two-thirds of the votes cast by such shareholders as, being entitled to do so, vote
in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company. Corresponding provisions of the trust
agreement governing the release of funds from our trust account may be amended if approved by the affirmative vote of at least two-thirds
of our ordinary shares which are represented in person or by proxy and are voted at a general meeting of the Company. Our sponsor, who
beneficially owns 25% of our ordinary shares may participate in any vote to amend our amended and restated memorandum and articles of
association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend
the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination behavior more
easily than some other special purpose acquisition companies, and this may increase our ability to complete a business combination with
which you do not agree.
31
Our sponsor, officers, directors
and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and
restated memorandum and articles of association (A)to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within
the completion window or (B)with respect to any other material provisions relating to shareholders rights or pre-initial
business combination activity, in each case unless we provide our public shareholders with the opportunity to redeem their public shares
upon approval of any such amendment 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 (net of taxes payable) and not previously released to us pursuant
to permitted withdrawals, divided by the number of then outstanding public shares. Our shareholders are not parties to, or third-party
beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers, directors
or director nominees for any breach of these agreements. As a result, in the event of a breach, our shareholders would need to pursue
a shareholder derivative action, subject to applicable law.
**
*We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination.*
In the event that the proposed
Business Combination with Ether Machine is not consummated, we intend to target businesses with enterprise values greater than we could
acquire with the net proceeds of our initial public offering and the sale of the private placement warrants. As a result, if the cash
portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemption by
public shareholders, we may be required to seek additional financing to complete such proposed initial business combination. We cannot
assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be
unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon
that particular business combination and seek an alternative target business candidate. Further, we may be required to obtain additional
financing in connection with the closing of our initial business combination for general corporate purposes, including for maintenance
or expansion of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing
our initial business combination, or to fund the purchase of other companies. If we are unable to complete our initial business combination,
our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution
to public shareholders, and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our
initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure
additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers,
directors or shareholders is required to provide any financing to us in connection with or after our initial business combination.
**
*Our sponsor will control the appointment
of our board of directors until consummation of our initial business combination and will hold a substantial interest in us. As a result,
it will appoint all of our directors prior to the consummation of our initial business combination and may exert a substantial influence
on actions requiring a shareholder vote, potentially in a manner that you do not support.*
Our sponsor owns 25% of our
issued and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially
in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. This potential
concentration of influence could be disadvantageous to other shareholders with interests different from those of our sponsor. In addition,
the founder shares, all of which are held by our sponsor, will entitle the holders to appoint all of our directors prior to the consummation
of our initial business combination. Holders of our public shares will have no right to vote on the appointment or removal of directors
during such time. Further, prior to the closing of our initial business combination, only holders of our ClassB ordinary shares
will be entitled to vote on continuing our Company in a jurisdiction outside the Cayman Islands (including any special resolution required
to amend our constitutional documents or to adopt new constitutional documents, in each case, as a result of our approving a transfer
by way of continuation in a jurisdiction outside the Cayman Islands). These provisions of our amended and restated memorandum and articles
of association may only be amended if approved by a special resolution passed by the affirmative vote of at least 90% (or, where such
amendment is proposed in respect of the consummation of our initial business combination, two-thirds) of the votes cast by such shareholders
as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company.
As a result, you will not have any influence over the appointment or removal of directors prior to our initial business combination or
any influence over our continuation in a jurisdiction outside the Cayman Islands prior to our initial business combination. If our sponsor
purchases any additional ClassA ordinary shares in the aftermarket or in privately negotiated transactions, this would increase
its control. Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional
securities, other than as disclosed in this Annual Report. Factors that would be considered in making such additional purchases would
include consideration of the current trading price of our ClassA ordinary shares. We may not hold an annual or extraordinary general
meeting to appoint new directors prior to the completion of our initial business combination, in which case all of the current directors
will continue in office until at least the completion of the business combination. In addition, since only holders of our ClassB
ordinary shares will have the right to vote on directors prior to our initial business combination, our initial shareholders will continue
to exert control at least until the completion of our initial business combination. Accordingly, our sponsor will continue to exert control
at least until the completion of our initial business combination.
**
**
32
**
*We may not be able to complete an initial
business combination because such initial business combination may be subject to regulatory review and approval requirements, including
foreign investment regulations and review by government entities such as the Committee on Foreign Investment in the UnitedStates
(CFIUS), or may be ultimately prohibited.*
Our initial business combination
may be subject to regulatory review and approval requirements by governmental entities, or ultimately prohibited. For example, CFIUS has
authority to review direct or indirect foreign investments in U.S.companies. Among other things, CFIUS is empowered to require certain
foreign investors to make mandatory filings, to charge filing fees related to such filings, and to self-initiate national security reviews
of foreign direct and indirect investments in U.S.companies if the parties to that investment choose not to file voluntarily. In
the case that CFIUS determines an investment to be a threat to national security, CFIUS has the power to unwind or place restrictions
on the investment. Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends onamong
other factorsthe nature and structure of the transaction, including the level of beneficial ownership interest and
the nature of any information or governance rights involved. For example, investments that result in control of a U.S.business
by a foreign person always are subject to CFIUS jurisdiction. CFIUSs expanded jurisdiction under the Foreign Investment Risk Review
Modernization Actof2018 and implementing regulations that became effective on February13, 2020 further includes investments
that do not result in control of a U.S.business by a foreign person but afford certain foreign investors certain information or
governance rights in a U.S.business that has a nexus to critical technologies, critical infrastructure
and/or sensitive personal data.
If a particular proposed initial
business combination with a U.S.business falls within CFIUSs jurisdiction, we may determine that we are required to make
a mandatory filing or that we will submit to CFIUS review on a voluntary basis, or to proceed with the transaction without submitting
to CFIUS and risk CFIUS intervention, before or after closing the transaction. CFIUS may decide to block or delay our proposed initial
business combination, impose conditions with respect to such initial business combination or request the President of the UnitedStates
to order us to divest all or a portion of the U.S.target business of our initial business combination that we acquired without first
obtaining CFIUS approval, which may limit the attractiveness of, delay or prevent us from pursuing certain target companies that we believe
would otherwise be beneficial to us and our shareholders. As a result, the pool of potential targets with which we could complete an initial
business combination may be limited and we may be adversely affected in terms of competing with other special purpose acquisition companies
which do not have any foreign ownership issues. In addition, certain federally licensed businesses may be subject to rules or regulations
that limit foreign ownership.
The process of government
review, whether by CFIUS or otherwise, could be lengthy. Because we have only a limited time to complete our initial business combination,
our failure to obtain any required approvals within the requisite time period may require us to liquidate. If we are unable to consummate
our initial business combination within the applicable time period required under our amended and restated memorandum and articles of
association, including as a result of extended regulatory review of a potential initial business combination, we will (i)cease all
operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than tenbusiness days
thereafter (and subject to lawfully available funds therefor), 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 (which
interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses) and not previously released to us pursuant
to permitted withdrawals, 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. In such event, our shareholders will miss the opportunity to benefit from an
investment in a target company and the appreciation in value of such investment. Additionally, our warrants may be worthless.
**
**
33
**
*Due to the number of special purpose acquisition
companies evaluating targets, attractive targets may become more scarce and there may be more competition for attractive targets or such
attractive targets may not be interested in consummating a business combination with a SPAC due to a negative public perception of mergers
involving SPACs. This could increase the cost of our initial business combination and could even result in our inability to find a target
or to consummate an initial business combination.*
During 2021 and 2022, the
number of special purpose acquisition companies that have been formed increased substantially. Many potential targets for special purpose
acquisition companies have already entered into an initial business combination, and there are still many special purpose acquisition
companies preparing for an initial public offering, as well as many such companies currently in registration. As a result, at times, fewer
attractive targets may be available to consummate an initial business combination.
In addition, because there
are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition
for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved
financial terms. Attractive deals could also become more scarce for other reasons, such as economic or industry sector downturns (including
a negative public perception of mergers involving SPACs), geopolitical tensions, or increases in the cost of additional capital needed
to close business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate
or frustrate our ability to find and consummate an initial business combination and may result in our inability to consummate an initial
business combination on terms favorable to our investors altogether.
**
*Adverse developments affecting the financial
services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely
affect our business, financial condition or results of operations, or our prospects.*
The funds in our operating
account and our trust account are held in banks or other financial institutions and have been invested only in U.S.government treasury
obligations with a maturity of 185days or less or in money market funds meeting certain conditions under Rule2a-7 under the
Investment Company Act which invest only in direct U.S.government treasury obligations; the holding of these assets in this form
is intended to be temporary and for the sole purpose of facilitating the intended business combination. To mitigate the risk that we might
be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that we hold investments
in the trust account, we may, at any time (based on our management teams ongoing assessment of all factors related to our potential
status under the Investment Company Act), instruct the trustee to liquidate the investments held in the trust account and instead to hold
the funds in the trust account in cash or in an interest-bearing demand deposit account at a bank. Our cash held in these accounts may
exceed any applicable Federal Deposit Insurance Corporation (FDIC) insurance limits. Should events, including limited liquidity,
defaults, non-performance or other adverse developments occur with respect to the banks or other financial institutions that hold our
funds, or that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these
kinds or other similar risks, the value of the assets in our trust account could be impaired, which could have a material impact on our
operating results, liquidity, financial condition and prospects. For example, on March10, 2023, the FDIC announced that Silicon
Valley Bank had been closed by the California Department of Financial Protection and Innovation. We cannot guarantee that the banks or
other financial institutions that will hold our funds will not experience similar issues.
**
**
34
**
*Because we must furnish our shareholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination
with some prospective target businesses.*
The federal proxy rules require
that a proxy statement with respect to a vote on an initial business combination meeting certain financial significance tests include
historical and pro forma financial statement disclosure. We will include the same financial statement disclosure in connection with our
tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be
prepared in accordance with, or be reconciled to, accounting principles generally accepted in the UnitedStates of America (GAAP)
or international financial reporting standards as issued by the International Accounting Standards Board (IFRS) depending
on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public
Company Accounting Oversight Board (UnitedStates) (PCAOB). These financial statement requirements may limit the pool
of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to
disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed
time frame.
**
*Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an initial business combination.*
Section404 of the Sarbanes-Oxley
Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form10-K for the
year ending December31, 2025. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer
qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation
requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not
be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial
reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome
on us as compared to other public companies because a target business with which we seek to complete our initial business combination
may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of
the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to
complete any such business combination.
Risks Relating to the Post-Business Combination
Company
**
*Subsequent to our completion of our initial
business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have
a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you
to lose some or all of your investment.*
Even if we conduct due diligence
on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present
within a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence,
or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be
forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in
our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known
risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and
not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions
about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be
subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially
finance the initial business combination or thereafter. Accordingly, any shareholders who choose to remain shareholders following the
business combination could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such
reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of
a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that
the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material
misstatement or material omission.
**
**
35
**
*The officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The loss of a business combination targets key personnel
could negatively impact the operations and profitability of our post-combination business.*
The role of an acquisition
candidates key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we
contemplate that certain members of an acquisition candidates management team will remain associated with the acquisition candidate
following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to
remain in place. The departure of an acquisition candidates key personnel could negatively impact the operations and profitability
of our post-combination business.
**
*Our management may not be able to maintain
control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target
business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.*
We may structure our initial
business combination so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity
interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or
acquires 50% or more of the outstanding voting securities of the target or is otherwise not to be required to register as an investment
company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction
company owns 50% or more of the voting securities of the target, our shareholders prior to our initial business combination may collectively
own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business
combination. For example, we could pursue a transaction in which we issue a substantial number of new ClassA ordinary shares in
exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100%
interest in the target. However, as a result of the issuance of a substantial number of new ClassA ordinary shares, our shareholders
immediately prior to such transaction could own less than a majority of our issued and outstanding ClassA ordinary shares subsequent
to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or
group obtaining a larger share of the Companys shares than we initially acquired. Accordingly, this may make it more likely that
our management will not be able to maintain control of the target business.
**
*We may have a limited ability to assess
the management of a prospective target business and, as a result, may effect our initial business combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company.*
When evaluating the desirability
of effecting our initial business combination with a prospective target business, our ability to assess the target businesss management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target businesss management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target
businesss management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and
profitability of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose to remain shareholders
following the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy
for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors
of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws
that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material
misstatement or material omission.
**
*We may seek business combination opportunities
with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our
desired results.*
We may seek business combination
opportunities with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement
such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the business combination
may not be as successful as we anticipate.
36
To the extent we complete
our initial business combination with a large complex business or entity with a complex operating structure, we may also be affected by
numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our
strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations,
we may not be able to properly ascertain or assess all of the significant risk factors until we complete our business combination. If
we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated, we may
not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us
with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business. Such combination
may not be as successful as a combination with a smaller, less complex organization.
**
*Transactions in connection with or in anticipation
of our initial business combination and our structure thereafter may not be tax-efficient to our shareholders and warrant holders. As
a result of our business combination, our tax obligations may be more complex, burdensome and/or uncertain.*
Although we will attempt to
structure the transactions in connection with our initial business combination in a tax-efficient manner, tax structuring considerations
are complex, the relevant facts and law are uncertain and may change, and we may prioritize commercial and other considerations over tax
considerations. For example, in anticipation of or in connection with our initial business combination and subject to any requisite shareholder
approval, we may: enter into one or more transactions that require or structure our business combination in a manner that requires shareholders
and/or warrant holders to recognize gain or income for tax purposes or otherwise increase their tax burden; effect a business combination
with a target company in another jurisdiction; or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction
in which the target company or business is located). We do not intend to make any cash distributions to shareholders or warrant holders
to pay taxes in connection with our business combination or thereafter. Accordingly, a shareholder or a warrant holder may need to satisfy
any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of the shares
or warrants received.
In addition, we will likely
effect a business combination with a target company that has business operations outside of the Cayman Islands, and possibly, business
operations in multiple jurisdictions. If we effect such a business combination, we could be subject to significant income, withholding
and other tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions.
Due to the complexity of tax obligations and filings in other jurisdictions, we may have a heightened risk related to audits or examinations
by U.S.federal, state, local and non-U.S.taxing authorities. This additional complexity and risk could have an adverse effect
on our after-tax profitability and financial condition. In addition, shareholders and warrant holders may be subject to additional income,
withholding or other taxes with respect to their ownership of us after any such transaction.
Risks Relating to Acquiring and Operating a
Business in Foreign Countries
**
*If we effect our initial business combination
with a company located outside of the UnitedStates, we would be subject to a variety of additional risks that may adversely affect
us.*
If we pursue a target company
with operations or opportunities outside of the UnitedStates for our initial business combination, we may face additional burdens
in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business
combination, we would be subject to a variety of additional risks that may negatively impact our operations.
37
If we pursue a target company
with operations or opportunities outside of the UnitedStates for our initial business combination, we would be subject to risks
associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial
business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators
or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business
combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an
international setting, including any of the following:
|
| costs and difficulties inherent in executing cross-border transactions, managing cross-border business
operations and complying with different commercial and legal requirements of overseas market; | |
|
| rules and regulations regarding currency redemption; |
|
|
| complex corporate withholding taxes on individuals; | |
|
| laws governing the manner in which future business combinations may be effected; | |
|
| exchange listing and/or delisting requirements; | |
|
| tariffs and trade barriers; | |
|
| regulations related to customs and import/export matters; | |
|
| local or regional economic policies and market conditions; | |
|
| unexpected changes in regulatory requirements; | |
|
| challenges in managing and staffing international operations; | |
|
| longer payment cycles; | |
|
| tax issues, such as tax law changes and variations in tax laws as compared to the UnitedStates; | |
|
| currency fluctuations and exchange controls; | |
|
| rates of inflation; | |
|
| challenges in collecting accounts receivable; | |
|
| cultural and language differences; | |
|
| employment regulations; | |
|
| underdeveloped or unpredictable legal or regulatory systems; | |
|
| corruption; | |
|
| protection of intellectual property; | |
|
| social unrest, crime, strikes, riots and civil disturbances; | |
|
| regime changes and political upheaval; | |
|
| terrorist attacks, natural disasters, widespread health emergencies and wars; and | |
|
| deterioration of political relations with the UnitedStates. | |
38
We may not be able to adequately
address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we
complete such initial business combination, our operations might suffer, either of which may adversely impact our business, financial
condition and results of operations.
**
*We may reincorporate in or transfer by way
of continuation to another jurisdiction in connection with our business combination, and such reincorporation may result in taxes imposed
on shareholders or warrant holders.*
We may, in connection with
our initial business combination or otherwise and, to the extent applicable, subject to requisite shareholder approval by special resolution
under the Companies Act (with respect to which only holders of ClassB ordinary shares will be entitled to vote prior to our initial
business combination), reincorporate in or transfer by way of continuation to the jurisdiction in which the target company or business
is located or in another jurisdiction. The transaction may require a shareholder or warrant holder to recognize taxable income in the
jurisdiction in which the shareholder or warrant holder is a tax resident or in which its members are resident if it is a tax transparent
entity (or may otherwise result in adverse tax consequences). We do not intend to make any cash distributions to shareholders or warrant
holders to pay such taxes. Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership
of our ClassA ordinary shares or warrants after the reincorporation.
In particular, although we
may attempt to structure any change in our jurisdiction of incorporation (if any) in a tax-efficient manner (including, if possible, in
a manner that is tax-deferred for U.S.federal income tax purposes), tax structuring considerations are complex, the relevant facts
and law may be uncertain and may change, we may prioritize commercial and other considerations over tax considerations, and we may prioritize
company-level tax considerations over the tax considerations of our shareholders and warrant holders. As a result, the change in our jurisdiction
of incorporation may have adverse tax consequences to us or to our shareholders and warrant holders, including the recognition of substantial
gain for U.S.federal income tax purposes, and because you may not have prior notice of our change in jurisdiction, you may not be
able to avoid such consequences. For example, under certain circumstances, including if we are treated as a PFIC, a U.S.Holder (as
defined below) may be subject to U.S.federal income tax on gain or a deemed dividend upon the exchange of our ordinary shares or
warrants for our successors shares or warrants, and such taxes may be substantial.
In addition to the immediate
consequences of a change in our jurisdiction of incorporation, holding our successors shares or warrants following a change in
our jurisdiction of incorporation could have different, potentially adverse, consequences as compared to those of holding our shares or
warrants prior to any such change. For example, if we were to change our jurisdiction of incorporation from the Cayman Islands to Delaware,
this could have a number of adverse consequences to Non-U.S.holders who own our successors shares or warrants by exposing
them to U.S.taxation and reporting obligations, such as the taxation of dividends from our successor or the taxation of dispositions
of our successors shares or warrants. Because such persons may not have prior notice of our change in jurisdiction, they may not
be able to change the manner in which they hold our shares or warrants or dispose of our shares or warrants prior to any such change in
our jurisdiction of incorporation, and therefore such persons may not be able to avoid any adverse consequences of holding our successors
shares or warrants after such change.
Further, it is possible that
we would change our jurisdiction of incorporation in anticipation of consummating a specific business combination but not complete that
business combination for any number of reasons. If we are unable to consummate a business combination with a specific business combination
target following such a change in our jurisdiction of incorporation, our new jurisdiction of incorporation could have disadvantages to
us or our shareholders and/or warrant holders, particularly if we subsequently pursue a business combination with a target that is incorporated
in a different jurisdiction. In such circumstances, we may not be competitive with other special purpose acquisition companies incorporated
in the Cayman Islands when pursuing certain target companies, the consummation of our initial business combination could be more complex,
or it may be more difficult to structure such an initial business combination in a tax-efficient manner. For example, we may change our
jurisdiction of incorporation to the UnitedStates in anticipation of a business combination with a U.S.target company but
ultimately effect our initial business combination with a non-U.S.target company. In such a case, we may be unable to structure
our initial business combination in a tax-deferred manner, and our shareholders and/or warrant holders may be required to pay substantial
U.S.federal income or other taxes in connection with the consummation of the initial business combination. In addition, the initial
business combination may result in tax inefficiencies for the post-business combination company, including that, if the post-business
combination company is organized outside of the UnitedStates, it may nevertheless be treated as a U.S.corporation for U.S.federal
income tax purposes, which treatment may result in substantial tax inefficiencies for both the post-business combination company and for
our shareholders and/or warrant holders.
39
We cannot assure you when
or whether we will change our jurisdiction of incorporation or, if we do change our jurisdiction of incorporation, the jurisdiction in
which we will ultimately be incorporated. Accordingly, there is significant uncertainty as to the legal, tax and other considerations
that may be applicable to us or to our shareholders and warrant holders, and we cannot provide you with specific or comprehensive examples
of such potential consequences. The rules governing a change in our jurisdiction of incorporation and the transactions that may occur
in connection with our initial business combination are complex, and the consequences arising from such rules or transactions will depend
on a holders particular circumstances and on the circumstances surrounding our change in jurisdiction and initial business combination.
All holders of our securities are urged to consult with and rely solely upon their own legal and tax advisors regarding the potential
consequences to them of any change in our jurisdiction of incorporation.
**
*We may reincorporate in or transfer by way
of continuation to another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern
some or all of our future material agreements and we may not be able to enforce our legal rights.*
In connection with our initial
business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine
to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement
of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the UnitedStates. The inability
to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities
or capital.
**
*We are subject to changing law and regulations
regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.*
We are subject to rules and
regulations by various governing bodies, including, for example, the Securities and Exchange Commission, which are charged with the protection
of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable
law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased
general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance
activities.
Moreover, because these laws,
regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes
available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing
revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes,
we may be subject to penalty and our business may be harmed.
**
*If our management following our initial
business combination is unfamiliar with UnitedStates securities laws, they may have to expend time and resources becoming familiar
with such laws, which could lead to various regulatory issues.*
Following our initial business
combination, our management may resign from their positions as officers or directors of the Company and the management of the target business
at the time of the business combination will remain in place. Management of the target business may not be familiar with UnitedStates
securities laws. If new management is unfamiliar with UnitedStates securities laws, they may have to expend time and resources becoming
familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect
our operations.
**
**
40
**
*Exchange rate fluctuations and currency
policies may cause a target business ability to succeed in the international markets to be diminished.*
In the event we acquire a
non-U.S.target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets
and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in
our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the
relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation
of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value
against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars
will increase, which may make it less likely that we are able to consummate such transaction.
**
*After our initial business combination,
substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations
in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political
and legal policies, developments and conditions in the country in which we operate.*
The economic, political and
social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic
growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future.
If in the future such countrys economy experiences a downturn or grows at a slower rate than expected, there may be less demand
for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our
ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business
combination, the ability of that target business to become profitable.
Risks Relating to our Sponsor and Management
Team
**
*A change of ownership or control of our
sponsor could adversely affect our ability to consummate our initial business combination.*
There are no restrictions
on our sponsors managing members ability to transfer equity interests in our sponsor held by the managing member or otherwise
consent to a transfer of such equity interests by another member of our sponsor. Transfers of equity interests in the sponsor or its direct
or indirect parent entities may result in a change of ownership or control of our sponsor. Such change of ownership or control of our
sponsor could adversely affect our ability to consummate our initial business combination, as there can be no assurances that a new sponsor
will possess the requisite skills, investor relationships and expertise to select an appropriate target business, obtain the necessary
financing and consummate the initial business combination.
**
*We are dependent upon our officers and directors
and their loss, or a reduction in the amount of time they can dedicate to our initial business combination, could adversely affect our
ability to operate.*
Our operations are dependent
upon a relatively small group of individuals and, in particular, our officers and directors. We believe that our success depends on the
continued service of our officers and directors, at least until we have completed our initial business combination. In addition, our officers
and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest
in allocating their time among various business activities, including identifying potential business combinations and monitoring the related
due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The
unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
**
*Our ability to successfully effect our initial
business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us
following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our
post-combination business.*
Our ability to successfully
effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target
business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management
or advisory positions following our initial business combination, it is likely that some or all of the management of the target business
will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot
assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements
of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with
such requirements.
41
*Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination, and a particular business combination
may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation
following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular
business combination is the most advantageous.*
Our key personnel may be able
to remain with our Company after the completion of our initial business combination only if they are able to negotiate employment or consulting
agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the
business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities
for services they would render to us after the completion of the business combination. Such negotiations also could make such key personnels
retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their
motivation in identifying and selecting a target business, subject to their fiduciary duties under Cayman Islands law.
**
*Our officers and directors will allocate
their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
This conflict of interest could have a negative impact on our ability to complete our initial business combination.*
Our officers and directors
are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their
time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time
employees prior to the completion of our initial business combination. Each of our officers is engaged in other business endeavors for
which he may be entitled to substantial compensation, and our officers are not obligated to contribute any specific number ofhours
per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our officers
and directors other business affairs require them to devote substantial amounts of time to such affairs in excess of their current
commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete
our initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing
an initial business combination target. However, we do not believe that any such potential conflicts would materially affect our ability
to complete our initial business combination.
**
*Our officers and directors presently have,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including other blank check
companies, and, accordingly, may have conflicts of interest in allocating their time and in determining to which entity a particular business
opportunity should be presented.*
Until we consummate our initial
business combination, we intend to continue to engage in the business of identifying and combining with one or more businesses. Our sponsor,
its managing member, and our officers and directors are, or may in the future become, affiliated with entities (such as operating companies
or investment vehicles) that are engaged in a similar business. We do not have employment contracts with our officers and directors that
will limit their ability to work at other businesses. In addition, our sponsor, officers and directors may participate in the formation
of, or become an officer or director of, any other blank check company prior to completion of our initial business combination. As a result,
our sponsor, officers and directors could have conflicts of interest in determining whether to present business combination opportunities
to us or to any other blank check company with which they may become involved. Our sponsor, officers and directors have complete discretion,
subject to applicable fiduciary duties, as to which blank check company they choose to pursue a business combination and the order in
which they pursue business combinations for any of their existing or future blank check companies. As a result, our sponsor, officers
and directors may pursue business combinations for blank check companies that it has sponsored in any order, which could result in its
more recent blank check companies completing business combinations prior to its blank check companies that were launched earlier. Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations
or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination
opportunity to such entities. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which
is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary
or contractual obligations to present such business combination opportunity to such other entity, subject to their fiduciary duties under
Cayman Islands law. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by law:
(i)no individual serving as a director or an officer, among other persons, shall have any duty, except and to the extent expressly
assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as
us, and (ii)we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction
or matter which (a)may be a corporate opportunity for any director or officer, on the one hand, and us, on the other or (b)the
presentation of which would breach an existing legal obligation of a director or officer to any other entity.
**
**
42
**
*Our officers, directors, advisors, security
holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.*
We have not adopted a policy
that expressly prohibits our directors, officers, advisors, security holders or affiliates from having a direct or indirect pecuniary
or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest.
In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or officers,
although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account
in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests
and ours. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination
target. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business
combination.
The personal and financial
interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing
a business combination. Consequently, our directors and officers discretion in identifying and selecting a suitable target
business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination
are appropriate and in our shareholders best interest. If this were the case, it would be a breach of their fiduciary duties to
us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders
rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
**
*Members of our management team and board
of directors have significant experience as founders, board members, officers, executives or employees of other companies. Certain of
those persons have been, are currently, or may become, involved in litigation, investigations or other proceedings, including related
to those companies or otherwise. This may have an adverse effect on us, which may impede our ability to consummate an initial business
combination.*
During the course of their
careers, members of our management team and board of directors have had significant experience as founders, board members, officers, executives
or employees of other companies. Certain of those persons have been, are currently or may in the future become involved in litigation,
investigations or other proceedings, including relating to the business affairs of such companies, transactions entered into by such companies,
or otherwise. Any such litigation, investigations or other proceedings may divert the attention and resources of our management team and
board of directors away from identifying and selecting a target business or businesses for our initial business combination and may negatively
affect our reputation, which may impede our ability to complete an initial business combination.
**
*Members of our management team and affiliated
companies may have been, and may in the future be, involved in civil disputes or governmental investigations unrelated to our business.*
Members of our management
team have been (and intend to be) involved in a wide variety of businesses. Such involvement has, and may lead to, media coverage and
public awareness. As a result, members of our management team and affiliated companies may have been, and may in the future be, involved
in civil disputes or governmental investigations unrelated to our business. Any such claims or investigations may be detrimental to our
reputation and could negatively affect our ability to identify and complete an initial business combination and may have an adverse effect
on the price of our securities.
43
*Our letter agreement with our sponsor, officers
and directors may be amended without shareholder approval.*
Our letter agreement with
our sponsor, officers and directors contain provisions relating to transfer restrictions of our founder shares and private placement warrants,
indemnification of the trust account, waiver of redemption rights and participation in liquidating distributions from the trust account.
The letter agreement may be amended without shareholder approval (although releasing the parties from the restriction not to transfer
the founder shares for 180days following the pricing date of our initial public offering will require the prior written consent
of the underwriters). While we do not expect our board to approve any amendment to the letter agreement prior to our initial business
combination, it may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve
one or more amendments to the letter agreement. Any such amendments to the letter agreement would not require approval from our shareholders
and may have an adverse effect on the value of an investment in our securities.
Risks Relating to our Securities
**
*You will not have any rights or interests
in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced
to sell your public shares or warrants, potentially at a loss.*
Our public shareholders will
be entitled to receive funds from the trust account only upon the earliest to occur of: (i)our completion of an initial business
combination, and then only in connection with those ClassA ordinary shares that such shareholder properly elected to redeem, subject
to the limitations and on the conditions described herein, (ii)the redemption of any public shares properly submitted in connection
with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing
of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we
do not complete our initial business combination within the completion window or (B)with respect to any other material provisions
relating to shareholders rights or pre-initial business combination activity, and (iii)the redemption of our public shares
if we are unable to complete an initial business combination within the completion window, subject to applicable law and as further described
herein. In no other circumstances will a public shareholder have any right or interest of any kind in the trust account. Holders of warrants
will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment,
you may be forced to sell your public shares or warrants, potentially at a loss.
**
*Nasdaq may delist our securities from trading
on its exchange, which could limit investors ability to make transactions in our securities and subject us to additional trading
restrictions.*
Our units, ClassA ordinary
shares and warrants are listed on Nasdaq. We cannot assure you that our securities will continue to be listed on Nasdaq in the future
or prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our initial business combination,
we must maintain certain financial, distribution and share price levels such as a minimum market value of listed securities (generally
$50,000,000) and a minimum number of holders of our securities (generally 400 public holders). Additionally, in connection with our initial
business combination, we will be required to demonstrate compliance with Nasdaqs initial listing requirements, which are more rigorous
than Nasdaqs continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance,
unless we decide to list on a different Nasdaq tier such as the Nasdaq Capital Market which has different initial listing requirements,
our share price would generally be required to be at least $4.00 per share and we would be required to have a minimum of 400 round lot
holders of our securities. We cannot assure you that we will be able to meet those initial listing requirements at that time.
44
If Nasdaq delists our securities
from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities
could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
|
| a limited availability of market quotations for our securities; | |
|
| reduced liquidity for our securities; | |
|
| a determination that our ClassA ordinary shares are a penny stock which will require
brokers trading in our ClassA ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading
activity in the secondary trading market for our securities; | |
|
| a limited amount of news and analyst coverage; and | |
|
| a decreased ability to issue additional securities or obtain additional financing in the future. | |
The National Securities Markets
Improvement Actof1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities,
which are referred to as covered securities. Because we expect that our units and eventually our ClassA ordinary shares
and warrants will be listed on Nasdaq, our units, ClassA ordinary shares and warrants will qualify as covered securities under the
statute. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate
companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the
sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the
sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check
companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies
in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute
and we would be subject to regulation in each state in which we offer our securities.
**
*The value of the founder shares following
completion of our initial business combination is likely to be substantially higher than the nominal price paid for them, even if the
trading price of our ordinary shares at such time is substantially less than $10.025 per public share.*
Our sponsor has invested in
us an aggregate of $3,935,000, comprised of the $25,000 purchase price for the founder shares and the $3,910,000 purchase price for the
private placement warrants. Assuming a trading price of $10.025 per public share upon consummation of our initial business combination,
the 5,533,333 founder shares would have an aggregate implied value of $7.22. Even if the trading price of our ordinary shares were as
low as $0.75 per share, and the private placement warrants are worthless, the value of the founder shares would be equal to our sponsors
aggregate initial investment in us. As a result, our sponsor is likely to be able to make a substantial profit on its investment in us
at a time when our public shares have lost significant value. Accordingly, members of our management team, who own interests in our sponsor,
may be more willing to pursue a business combination with a riskier or less-established target business than would be the case if our
sponsor had paid the same per share price for the founder shares as our public shareholders paid for their public shares.
**
*Because we are incorporated under the laws
of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.federal
courts may be limited.*
We are an exempted company
incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within
the UnitedStates upon our directors or officers, or enforce judgments obtained in the UnitedStates courts against our directors
or officers.
Our corporate affairs are
governed by our amended and restated memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands and
the common law of the Cayman Islands. We also are subject to the federal securities laws of the UnitedStates. The rights of shareholders
to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under
Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived
in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose
courts are of persuasive authority, but are not binding on a court in the Cayman Islands.
45
The rights of our shareholders
and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial
precedent in some jurisdictions in the UnitedStates. In particular, the Cayman Islands has a different body of securities laws as
compared to the UnitedStates, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies
of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal
court of the UnitedStates.
We have been advised by Maples
and Calder (Cayman) LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i)to recognize or
enforce against us judgments of courts of the UnitedStates predicated upon the civil liability provisions of the federal securities
laws of the UnitedStates or any state; and (ii)in original actions brought in the Cayman Islands, to impose liabilities against
us predicated upon the civil liability provisions of the federal securities laws of the UnitedStates or any state, so far as the
liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the
Cayman Islands of judgments obtained in the UnitedStates, the courts of the Cayman Islands will recognize and enforce a foreign
money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a
competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain
conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a
liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the
same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural
justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy).
A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the
above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members
of the board of directors or controlling shareholders than they would as public shareholders of a UnitedStates company.
**
*After our initial business combination,
it is possible that a majority of our directors and officers will live outside the UnitedStates and all of our assets will be located
outside the UnitedStates; therefore, investors may not be able to enforce federal securities laws or their other legal rights.*
It is possible that after
our initial business combination, a majority of our directors and officers will reside outside of the UnitedStates and all of our
assets will be located outside of the UnitedStates. As a result, it may be difficult, or in some cases not possible, for investors
in the UnitedStates to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce
judgments of UnitedStates courts predicated upon civil liabilities and criminal penalties on our directors and officers under UnitedStates
laws.
**
*Provisions in our amended and restated memorandum
and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our ClassA ordinary shares and could entrench management.*
Our amended and restated memorandum
and articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be
in their best interests. These provisions include the ability of the board of directors to designate the terms of and issue new series
of preference shares, which may make the removal of management more difficult and may discourage transactions that otherwise could involve
payment of a premium over prevailing market prices for our securities.
We are also subject to anti-takeover
provisions under Cayman Islands law, which could delay or prevent a change of control. Together these provisions may make the removal
of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market
prices for our securities.
**
**
46
**
*Our amended and restated memorandum and
articles of association provide that the courts of the Cayman Islands will be the exclusive forums for certain disputes between us and
our shareholders, which could limit our shareholders ability to obtain a favorable judicial forum for complaints against us or
our directors, officers or employees.*
Our amended and restated memorandum
and articles of association provide that unless we consent in writing to the selection of an alternative forum, the courts of the Cayman
Islands shall have exclusive jurisdiction over any claim or dispute arising out of or in connection with our amended and restated memorandum
and articles of association or otherwise related in any way to each shareholders shareholding in us, including but not limited
to (i)any derivative action or proceeding brought on our behalf, (ii)any action asserting a claim of breach of any fiduciary
or other duty owed by any of our current or former directors, officers or other employees to us or our shareholders, (iii)any action
asserting a claim arising pursuant to any provision of the Companies Act or our amended and restated memorandum and articles of association,
or (iv)any action asserting a claim against us governed by the internal affairs doctrine (as such concept is recognized under the
laws of the UnitedStates of America) and that each shareholder irrevocably submits to the exclusive jurisdiction of the courts of
the Cayman Islands over all such claims or disputes. The forum selection provision in our amended and restated memorandum and articles
of association will not apply to actions or suits brought to enforce any liability or duty created by the Securities Act, ExchangeAct
or any claim for which the federal district courts of the UnitedStates of America are, as a matter of the laws of the UnitedStates
of America, the sole and exclusive forum for determination of such a claim.
Our amended and restated memorandum
and articles of association also provide that, without prejudice to any other rights or remedies that we may have, each of our shareholders
acknowledges that damages alone would not be an adequate remedy for any breach of the selection of the courts of the Cayman Islands as
exclusive forum and that accordingly we shall be entitled, without proof of special damages, to the remedies of injunction, specific performance
or other equitable relief for any threatened or actual breach of the selection of the courts of the Cayman Islands as exclusive forum.
This choice of forum provision
may increase a shareholders cost and limit the shareholders ability to bring a claim in a judicial forum that it finds favorable
for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers
and other employees. Any person or entity purchasing or otherwise acquiring any of our shares or other securities, whether by transfer,
sale, operation of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and consented to these provisions.
There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions
in other companies charter documents has been challenged in legal proceedings. It is possible that a court could find this type
of provisions to be inapplicable or unenforceable, and if a court were to find this provision in our amended and restated memorandum and
articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the
dispute in other jurisdictions, which could have adverse effect on our business and financial performance.
**
*An investment in our securities, and certain
subsequent transactions with respect to our securities, may result in uncertain or adverse U.S.federal income tax consequences.*
An investment in our securities,
and certain subsequent transactions with respect to our securities, may result in uncertain or adverse U.S.federal income tax consequences.
For instance, because there are no authorities that directly address the U.S.federal income tax implications of instruments similar
to the units we issued in the initial public offering, the allocation an investor makes with respect to the purchase price of a unit between
the ClassA ordinary share and the one-half of a warrant to purchase one ClassA ordinary share included in each unit could
be challenged by the U.S.Internal Revenue Service (IRS) or courts. In addition, the U.S.federal income tax consequences
of a cashless exercise of warrants included in our units is unclear under current law. Finally, it is unclear whether the redemption rights
with respect to our ClassA ordinary shares suspend the running of a U.S.Holders holding period for purposes of determining
whether any gain or loss realized by such holder on the sale or exchange of ClassA ordinary shares is long-term capital gain or
loss and for determining whether any dividend we pay would be considered qualified dividend income for U.S.federal
income tax purposes. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences when
acquiring, owning or disposing of our securities.
**
**
47
**
*Whether a redemption of ClassA ordinary
shares will be treated as a sale of such ClassA ordinary shares for U.S.federal income tax purposes will depend on a shareholders
specific facts.*
The U.S.federal income
tax treatment of a redemption of ClassA ordinary shares will depend on whether the redemption qualifies as a sale of such ClassA
ordinary shares under Section302(a)of the Internal Revenue Code of 1986, as amended (the Code), which will depend
largely on the total number of our shares treated as held by the shareholder electing to redeem ClassA ordinary shares (including
any shares constructively owned by the holder as a result of owning private placement warrants or public warrants or otherwise) relative
to all of our shares outstanding both before and after the redemption. If such redemption is not treated as a sale of ClassA ordinary
shares for U.S.federal income tax purposes, the redemption will instead be treated as a corporate distribution of cash from us.
**
*We may amend the terms of the warrants in
a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public
warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened, the number of ClassA
ordinary shares purchasable upon exercise of a warrant could be decreased, and the warrant put right could be waived or modified, all
without your approval.*
Our warrants are issued in
registered form under a warrant agreement between Odyssey Transferand Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i)curing any ambiguity
or to correct any defective provision or mistake, including to conform the provisions of the warrant agreement to the description of the
terms of the warrants and the warrant agreement, (ii)adjusting the provisions relating to cash dividends on ordinary shares as contemplated
by and in accordance with the warrant agreement or (iii)adding or changing any provisions with respect to matters or questions arising
under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable, provided that the approval by the
holders of at least 50% of the then-outstanding public warrants is required to make any such change. Accordingly, we may amend the terms
of the public warrants in a manner adverse to a holder of public warrants if holders of at least 50% of the then outstanding public warrants
approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then
outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise
price of the warrants, convert the warrants into cash or shares, shorten the exercise period, decrease the number of ClassA ordinary
shares purchasable upon exercise of a warrant or a waiver or modification of the warrant put right in a way adverse to holders.
**
*Our warrant agreement designates the courts
of the State of NewYork or the UnitedStates District Court for the Southern District of NewYork as the sole and exclusive
forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of
warrant holders to obtain a favorable judicial forum for disputes with our Company.*
Our warrant agreement provides
that, subject to applicable law, (i)any action, proceeding or claim against us arising out of or relating in any way to the warrant
agreement, including under the Securities Act, will be brought and enforced in the courts of the State of NewYork or the UnitedStates
District Court for the Southern District of NewYork, and (ii)that we irrevocably submit to such jurisdiction, which jurisdiction
shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and
that such courts represent an inconvenient forum. With respect to any complaint asserting a cause of action arising under the Securities
Act or the rules and regulations promulgated thereunder, we note, however, that there is uncertainty as to whether a court would enforce
this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section22
of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability
created by the Securities Act or the rules and regulations thereunder.
Notwithstanding the foregoing,
these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the ExchangeAct
or any other claim for which the federal district courts of the UnitedStates of America are the sole and exclusive forum. Any person
or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented
to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions
of the warrant agreement, is filed in a court other than a court of the State of NewYork or the UnitedStates District Court
for the Southern District of NewYork (a foreign action) in the name of any holder of our warrants, such holder shall
be deemed to have consented to: (x)the personal jurisdiction of the state and federal courts located in the State of NewYork
in connection with any action brought in any such court to enforce the forum provisions (an enforcement action), and (y)having
service of process made upon such warrant holder in any such enforcement action by service upon such warrant holders counsel in
the foreign action as agent for such warrant holder. This choice-of-forum provision may limit a warrant holders ability to bring
a claim in a judicial forum that it finds favorable for disputes with our Company, which may discourage such lawsuits. Alternatively,
if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified
types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could
materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and
resources of our management and board of directors.
**
**
48
**
*A provision of our warrant agreement may
make it more difficult for us to consummate an initial business combination.*
If (i)we issue additional
ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination
at a Newly Issued Price (as defined in the warrant agreement) of less than $9.20 per ClassA ordinary share, (ii)the aggregate
gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding
of our initial business combination, and (iii)the Market Value (as defined in the warrant agreement) of our ClassA ordinary
shares is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of
the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price of the warrants will be adjusted
(to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. This may make it more difficult
for us to consummate an initial business combination with a target business.
**
*We may redeem your unexpired warrants prior
to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.*
We have the ability to redeem
outstanding warrants at any time prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our ClassA
ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the
exercise price of a warrant) for any 20trading days within a 30 trading-day period commencing at least 30days after completion
of our initial business combination and ending on the thirdtrading day prior to the date on which we give proper notice of such
redemption to the warrants holders and provided certain other conditions are met. We will not redeem the warrants as described above unless
a registration statement under the Securities Act covering the issuance of the ClassA ordinary shares issuable upon exercise of
the warrants is then effective and a current prospectus relating to those ClassA ordinary shares is available throughout the measurement
period. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of ordinary shares
upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to
effect such registration or qualification. We will use our best efforts to register or qualify such ordinary shares under the blue sky
laws of the state of residence in those states in which the warrants were offered by us in our initial public offering. Redemption of
the outstanding warrants could force you to (i)exercise your warrants and pay the exercise price therefor at a time when it may
be disadvantageous for you to do so, (ii)sell your warrants at the then-current market price when you might otherwise wish to hold
your warrants or (iii)accept the nominal redemption price which, at the time the outstanding warrants are called for redemption,
is likely to be substantially less than the market value of your warrants.
**
*Our warrants may have an adverse effect
on the market price of our ClassA ordinary shares and make it more difficult to effectuate our initial business combination.*
We issued warrants to purchase
8,300,000 of our ClassA ordinary shares as part of the units offered in our initial public offering and, simultaneously with the
closing of our initial public offering, we issued in a private placement an aggregate of 5,985,000 private placement warrants at $1.00
per warrant. In addition, if the sponsor makes any working capital loans, it may convert those loans into up to an additional 1,500,000
private placement warrants, at the price of $1.00 per warrant. To the extent we issue ordinary shares to effectuate a business transaction,
the potential for the issuance of a substantial number of additional ClassA ordinary shares upon exercise of these warrants could
make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued
and outstanding ClassA ordinary shares and reduce the value of the ClassA ordinary shares issued to complete the business
transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring
the target business.
**
**
49
**
*Because each unit contains one-half of one
warrant and only a whole warrant may be exercised, the units may be worth less than units of other special purpose acquisition companies.*
Each unit contains one-half
of one warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole
units will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will,
upon exercise, round down to the nearest whole number the number of ClassA ordinary shares to be issued to the warrant holder. This
is different from other SPAC units that include one ordinary share and one whole warrant to purchase one share. We have established the
components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since
the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units that each contain a whole warrant
to purchase one share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure
may cause our units to be worth less than if it included a whole warrant to purchase one share.
**
*Unless we complete our business combination,
holders of the public warrants will not be able to exercise the warrant put right, and we may not have sufficient funds to repurchase
public warrants pursuant to the holders exercise of the warrant put rights.*
In connection with the completion
of our business combination, each holder of public warrants will have the right to require our sponsor to repurchase or cause one of its
affiliates to repurchase, at $0.65 per public warrant (exclusive of commissions), our outstanding public warrants held by such holder.
If we are unable to complete our business combination, there will be no requirement for our sponsor to repurchase, or to cause one of
its affiliates to repurchase, our public warrants held by such holder. There can be no assurances that we will complete our business combination
or that if we do complete our business combination, our sponsor or we will have sufficient funds to repurchase public warrants pursuant
to the holders exercise of the warrant put rights.
**
*Holders of ClassA ordinary shares
will not be entitled to vote on continuing the Company in a jurisdiction outside of the Cayman Islands.*
As holders of our ClassA
ordinary shares, our public shareholders will not have the right to vote on the appointment of directors and continuing our Company in
a jurisdiction outside the Cayman Islands (including any special resolution required to amend our constitutional documents or to adopt
new constitutional documents, in each case, as a result of our approving a transfer by way of continuation in a jurisdiction outside the
Cayman Islands). In addition, prior to our initial business combination, holders of a majority of our founder shares may remove a member
of the board of directors for any reason. Accordingly, you will not have any say in the management of our Company prior to the consummation
of an initial business combination.
**
*You will not be permitted to exercise your
warrants unless we register and qualify the underlying ClassA ordinary shares or certain exemptions are available.*
If the issuance of the ClassA
ordinary shares upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities
Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants may have
no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full
unit purchase price solely for the ClassA ordinary shares included in the units.
Because the warrants will
be exercisable until their expiration date of up to fiveyears after the completion of our initial business combination, in order
to comply with the requirements of Section10(a)(3)of the Securities Act following the consummation of our initial business
combination, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 20business
days, after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a post-effective
amendment to the registration statement relating to our initial public offering, or a new registration statement covering the registration
under the Securities Actofthe ClassA ordinary shares issuable upon exercise of the warrants and thereafter will use
our commercially reasonable efforts to cause the same to become effective within 60business days following our initial business
combination and to maintain a current prospectus relating to the ClassA ordinary shares issuable upon exercise of the warrants until
the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to
do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration
statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC
issues a stop order.
50
If the ClassA ordinary
shares issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the warrant agreement, holders
of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless
basis in accordance with Section3(a)(9) of the Securities Act or another exemption.
In no event will warrants
be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their
warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the
exercising holder, or an exemption from registration or qualification is available.
If our ClassA ordinary
shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition
of covered securities under Section18(b)(1)of the Securities Act, we may, at our option, not permit holders
of warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance
with Section3(a)(9)of the Securities Act; in the event we so elect, we will not be required to file or maintain in effect
a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in the
event we do not so elect, we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky
laws to the extent an exemption is not available.
In no event will we be required
to net cash settle any warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in
exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities
Act or applicable state securities laws.
**
*You may only be able to exercise your public
warrants on a cashless basis under certain circumstances, and if you do so, you will receive fewer ClassA ordinary
shares from such exercise than if you were to exercise such warrants for cash.*
The warrant agreement provides
that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will,
instead, be required to do so on a cashless basis in accordance with Section3(a)(9)of the Securities Act: (i)if the
ClassA ordinary shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the
terms of the warrant agreement; (ii)if we have so elected and the ClassA ordinary shares are at the time of any exercise of
a warrant not listed on a national securities exchange such that they satisfy the definition of covered securities under
Section18(b)(1)of the Securities Act; and (iii)if we have so elected and we call the public warrants for redemption.
If you exercise your public
warrants on a cashless basis, you would pay the warrant exercise price by surrendering the warrants for that number of ClassA ordinary
shares equal to the quotient obtained by dividing (x)the product of the number of ClassA ordinary shares underlying the warrants,
multiplied by the excess of the fair market value of our ClassA ordinary shares (as defined in the next sentence)
over the exercise price of the warrants by (y)the fair market value. The fair market value is the average reported
closing price of the ClassA ordinary shares for the 10trading days ending on the thirdtrading day prior to the date
on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants,
as applicable. As a result, you would receive fewer ClassA ordinary shares from such exercise than if you were to exercise such
warrants for cash.
**
**
51
**
*The grant of registration rights to our
sponsor, the underwriters and other holders of our private placement warrants may make it more difficult to complete our initial business
combination, and the future exercise of such rights may adversely affect the market price of our ClassA ordinary shares.*
Pursuant to our registration
rights agreement entered into in connection with our initial public offering, our sponsor, the underwriters, and their permitted transferees
can demand that we register the ClassA ordinary shares into which founder shares are convertible, holders of our private placement
warrants and their permitted transferees can demand that we register the private placement warrants and the ClassA ordinary shares
issuable upon exercise of the private placement warrants or holders of securities that may be issued upon conversion of working capital
loans and their permitted transferees may demand that we register such units, shares, warrants or the ClassA ordinary shares issuable
upon exercise of such warrants and any other securities of the Company acquired by them prior to the consummation of our initial business
combination. We will bear the cost of registering these securities. The registration and availability of such a significant number of
securities for trading in the public market may have an adverse effect on the market price of our ClassA ordinary shares. In addition,
the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because
the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration
to offset the negative impact on the market price of our ClassA ordinary shares that is expected when the ordinary shares owned
by our initial shareholders, holders of our private placement warrants or holders of our working capital loans or their respective permitted
transferees are registered.
General Risk Factors
**
*We are a blank check company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.*
We are a blank check company
incorporated under the laws of the Cayman Islands with no operating results, and all of our activities to date have been related to our
formation, our initial public offering, and, since the closing of our initial public offering, a search for a business combination candidate.
Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing
our initial business combination. We have no plans, arrangements or understandings with any prospective target business concerning a business
combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we
will never generate any operating revenues.
**
*Past performance by our management team,
our advisors and their respective affiliates, including investments and transactions in which they have participated and businesses with
which they have been associated, may not be indicative of future performance of an investment in the company.*
Information regarding our
management team, our advisors and their respective affiliates, including investments and transactions in which they have participated
and businesses with which they have been associated, is presented for informational purposes only. Any past experience and performance
by our management team, our advisors and their respective affiliates and the businesses with which they have been associated, is not a
guarantee that we will be able to successfully identify a suitable candidate for our initial business combination, that we will be able
to provide positive returns to our shareholders, or of any results with respect to any initial business combination we may consummate.
You should not rely on the historical experiences of our management team, our advisors and their respective affiliates, including investments
and transactions in which they have participated and businesses with which they have been associated, as indicative of the future performance
of an investment in us or as indicative of every prior investment by each of the members of our management team, our advisors or their
respective affiliates. The market price of our securities may be influenced by numerous factors, many of which are beyond our control,
and our shareholders may experience losses on their investment in our securities.
**
*Cyber incidents or attacks directed at us
could result in information theft, data corruption, operational disruption and/or financial loss.*
We depend on digital technologies,
including information systems, infrastructure and cloud applications and services, including those of third parties with which we may
deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential
data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against
such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability
to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business
and lead to financial loss.
**
**
52
**
*We may be a passive foreign investment company,
or PFIC, which could result in adverse UnitedStates federal income tax consequences to U.S.investors.*
If we are a PFIC for any taxable
year (or portion thereof) that is included in the holding period of a beneficial owner of our units, Class A ordinary shares or warrants
who or that is, for United States federal income tax purposes, (i) an individual citizen or resident of the United States, (ii) a corporation
(or other entity treated as a corporation for United States federal income tax purposes) that is created or organized (or treated as created
or organized) in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of
which is subject to United States federal income taxation regardless of its source or (iv) a trust if (A) a court within the United States
is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control
all substantial decisions of the trust, or (B) it has a valid election in effect under Treasury regulations to be treated as a United
States person (within the meaning of Section 7701(a)(30) of the Code) (U.S. Holder), such U.S.Holder may be subject
to adverse U.S.federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our
current and subsequent taxableyears may depend on, among other things, whether we qualify for the PFIC start-up exception, the timing
of our business combination, the amount of our passive income and assets in the year of the business combination, whether we combine with
a U.S.or non-U.S.target company, and the amount of passive income and assets of the acquired business. Depending on the particular
circumstances the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will
qualify for the start-up exception. Our actual PFIC status for any taxable year, moreover, will not be determinable until after the end
of such year. Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent
taxable year. If we determine we are a PFIC for any taxable year (of which there can be no assurance), upon written request by a U.S.
Holder, we will endeavor to provide to the U.S.Holder such information as the IRS may require, including a PFIC annual information
statement, in order to enable the U.S.Holder to make and maintain a qualified electing fund election with respect
to its ClassA ordinary shares, but there can be no assurance that we will timely provide such required information, and such election
would be unavailable with respect to our warrants in all cases. The rules dealing with PFICs and with the qualified electing fund election
are complex and are affected by various factors in addition to those described in this Annual Report. Accordingly, we urge U.S.investors
to consult their own tax advisors regarding the possible application of the PFIC rules.
**
*If our initial business
combination involves a company organized under the laws of a state of the UnitedStates, it is possible a 1% U.S.federal excise
tax will be imposed on us in connection with redemptions of our ClassA ordinary shares after or in connection with such initial
business combination.*
The Inflation Reduction Act
imposes a 1% excise tax on the fair market value of certain repurchases (including certain redemptions) of stock by publicly traded domestic
(i.e., UnitedStates) corporations (and certain non-U.S.corporations treated as surrogate foreign corporations).
The excise tax will apply to stock repurchases occurring in 2023 and beyond. The amount of the excise tax is generally 1% of the aggregate
fair market value of the shares of stock repurchased by the corporation during a taxable year, net of the aggregate fair market value
of certain new stock issuances by the repurchasing corporation during the same taxable year. The U.S.Department of the Treasury
has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the excise tax;
however, only limited guidance has been issued to date.
As an entity incorporated
as a Cayman Islands company, the 1% excise tax is not expected to apply to redemptions of our ClassA ordinary shares, including
redemptions related to extension votes (if applicable), a business combination in which we remain a Cayman Islands exempted company or
otherwise (absent any regulations and other additional guidance that may be issued in the future).
However, in connection with
an initial business combination involving a company organized under the laws of the UnitedStates (or any subdivision thereof), it
is possible that we domesticate and continue as a Delaware corporation prior to certain redemptions and, because our securities are trading
on Nasdaq, it is possible that we will be subject to the excise tax with respect to any subsequent redemptions, including redemptions
related to extension votes or in connection with the initial business combination that are treated as repurchases for this purpose (other
than, pursuant to recently issued guidance from the U.S.Department of the Treasury, redemptions in complete liquidation of the Company).
In all cases, the extent of the excise tax that may be incurred will depend on a number of factors, including (i)the structure of
the initial business combination, (ii) the fair market value of our stock redeemed and (iii)the extent such redemptions could be
treated as dividends and not repurchases, and the content of any regulations and other additional guidance from the U.S.Department
of the Treasury that may be issued and applicable to the redemptions. Issuances of stock by a repurchasing corporation in a year in which
such corporation repurchases stock may reduce the amount of excise tax imposed with respect to such repurchase. The excise tax is imposed
on the repurchasing corporation itself, not the shareholders from which stock is repurchased. The imposition of the excise tax as a result
of redemptions of our ClassA ordinary shares (or other shares into which such ClassA ordinary shares may be converted) in
connection with the initial business combination or otherwise could, however, reduce the amount of cash available to pay redemptions or
reduce the cash contribution to the target business in connection with our initial business combination, which could result in our inability
to meet conditions in the agreement relating to our initial business combination related to a minimum cash requirement, if any, or otherwise
cause the other shareholders of the combined company (including any of our shareholders who do not exercise their redemption rights in
connection with the initial business combination) to economically bear the impact of such excise tax.
**
**
53
**
*We are an emerging growth company and a
smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and
may make it more difficult to compare our performance with other public companies.*
We are an emerging
growth company within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but
not limited to, not being required to comply with the auditor internal controls attestation requirements of Section404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We will cease
to be an emerging growth company upon the earliest of:
|
| the last day of the fiscal year during which we have total annual gross revenues of US$1,235,000,000 (as
such amount is indexed for inflation every five years by the SEC) or more; | |
|
| the last day of our fiscal year following the fifth anniversary of the completion of our first sale of
our equity securities pursuant to an effective registration statement under the Securities Act, which is expected to be December 31, 2029,
unless we change our fiscal year; | |
|
| the date on which we have, during the previous three-year period, issued more than US$1,000,000,000 in
non-convertible debt; or | |
|
| the date on which we are deemed to be a large accelerated filer, as defined in Rule 12b-2
of the Exchange Act, which would occur as of the end of any fiscal year in which the market value of our Class A ordinary shares that
are held by non-affiliates exceeds US$700,000,000 as of the last day of our most recently completed second fiscal quarter. | |
We cannot predict whether
investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less
attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would
be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section102(b)(1)of
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 Securities Act registration statement declared effective or do not have a class
of securities registered under the ExchangeAct) 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 an 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 financial statements with another public company which is neither an emerging growth company nor an emerging
growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences
in accounting standards used.
54
Additionally, we are a smaller
reporting company as defined in Item10(f)(1)of RegulationS-K.Smaller reporting companies may take advantage
of certain reduced disclosure obligations, including, among other things, providing only twoyears of audited financial statements.
We will remain a smaller reporting company until the lastday of the fiscal year in which (1)the market value of our ordinary
shares held by non-affiliates is equal to or exceeds $250million as of the prior June30, or (2)our annual revenues equaled
or exceeded $100million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates is
equal to or exceeds $700million as of the prior June30. To the extent we take advantage of such reduced disclosure obligations,
it may also make comparison of our financial statements with other public companies difficult or impossible.
**
*Changes in the market for directors and
officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.*
The market for directors and
officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team. Fewer
insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally
increased and the terms of such policies have generally become less favorable. These trends may continue into the future.
The increased cost and decreased
availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial
business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public
company, the post-business combination entity might need to incur greater expense, accept less favorable terms or both. However, any failure
to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combinations ability
to attract and retain qualified officers and directors.
In addition, even after we
were to complete an initial business combination, our directors and officers could still be subject to potential liability from claims
arising from conduct alleged to have occurred prior to the initial business combination. As a result, in order to protect our directors
and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (run-off
insurance). The need for run-off insurance would be an added expense for the post-business combination entity, and could interfere
with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.
**
*Inflation in the UnitedStates and
elsewhere could make it more difficult for us to complete our initial business combination.*
Inflation in the UnitedStates
and elsewhere, if it is not successfully managed, may lead to increased price volatility for publicly traded securities, including ours,
or other national, regional or international economic disruptions, any of which could make it more difficult for us to complete our initial
business combination.
Item 1B. Unresolved
Staff Comments
None.
55
Item 1C. Cybersecurity
As a blank check company, we have no operations and therefore do not have any operations of our own that face cybersecurity threats. However, we do depend on the digital technologies of third parties, and as noted in Item 1A. Risk Factors of this Form 10-K, cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss. Because of our reliance on the technologies of third parties, we also depend upon the personnel and the processes of third parties to protect against cybersecurity threats, and we have no personnel or processes of our own for this purpose. Our board of directors oversees risk for our Company, and prior to filings with the SEC, our board of directors reviews our risk factors, including the descriptions of the risks we face from cybersecurity threats.
Item 2. Properties
We are a remote-first company,
meaning that all of our team members work remotely. For purposes of compliance with applicable requirements of Securities Act and the
Exchange Act, communications may be directed to 1980 Post Oak Blvd., Suite 100, PMB 6373, Houston, TX, 77056. We believe that our remote
working operations are adequate to meet our needs for the immediate future, and that, if necessary, suitable physical space will be available
to accommodate any expansion of our operations.
Item 3. Legal
Proceedings
We are not a party to and none of our property
is subject to any material pending legal proceedings.
Item 4. Mine
Safety Disclosures
None.
56
PART
II
Item 5. Market
for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our Units, Class A ordinary shares and warrants
are traded on the Nasdaq under the symbols ETHM, ETHMU and ETHMW, respectively. Our Units commenced
public trading on November 22, 2024, and our Class A ordinary shares and warrants began separate trading on December 9, 2024. There is
no trading market for our Class B ordinary shares.
Holders
As of March 3, 2026, there was one holder
of record of our Units, one holder of record of our separately traded Class A ordinary shares, one holder of record of our separately
traded public warrants, and one holder of record of our Class B ordinary shares.
Dividends
We have not paid any cash dividends on our ordinary
shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash
dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition
subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination
will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness in connection with our business
combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Securities Authorized for Issuance Under Equity
Compensation Plans
None
Recent Sales of Unregistered Securities; Use
of Proceeds from Registered Offerings
**
*Use of Proceeds*
The registration statement on Form S-1 (File No.
333-280719) for our initial public offering was declared effective by the SEC on November 20, 2024. On November 22, 2024, the Company
consummated the initial public offering of 16,600,000, including 1,600,000 Units as a result of the underwriters partial exercise
of their overallotment option, at an offering price of $10.00 per Unit. The gross proceeds from the initial public offering were $166,000,000
in the aggregate.
A total of $166,415,000 of the net proceeds of
the initial public offering and private placement, were placed in a trust account maintained by the Odyssey Transfer and Trust Company
acting as trustee. Transaction costs amounted to approximately $10,605,256, consisting of $3,320,000 of cash underwriting fees, $6,640,000
of deferred underwriting fees and approximately $645,256 of other offering costs. There has been no material change in the planned use
of proceeds from such use as described in the Companys registration statement on Form S-1 (File No. 333-280719).
Item 6. [Reserved]
Item 7. Managements
Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion
and analysis of the Companys financial condition and results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in Part II, Item 8. Financial Statements and Supplementary Data
of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking
statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors,
including those set forth under Special Note Regarding Forward-Looking Statements, Part I, Item 1A. Risk Factors
and elsewhere in this Annual Report on Form 10-K.
57
Overview
We are a blank check
company incorporated in the Cayman Islands on June 13, 2024 formed for the purpose of effecting a merger, amalgamation, share exchange,
asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We intend to effectuate
our business combination using cash derived from the proceeds of the initial public offering and the sale of the private placement warrants,
our shares, debt or a combination of cash, shares and debt.
We expect to continue to
incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination
will be successful.
Proposed Business Combination
On July 21, 2025, Dynamix
Corporation and Pubco entered into the Business Combination Agreement with the SPAC Merger Sub, The Ether Reserve LLC, a Delaware limited
liability company (the Company), Ethos Sub 1, Inc., a Delaware corporation and wholly-owned subsidiary of SPAC (SPAC
Subsidiary A), Ethos Sub 2, Inc., a Delaware corporation and wholly-owned subsidiary of SPAC Subsidiary A (SPAC Subsidiary
B), Ethos Sub 3, Inc., a Delaware corporation and wholly-owned subsidiary of SPAC Subsidiary B (Company Merger Sub),
and ETH Partners LLC, a Delaware limited liability company (the Seller).
For additional information
regarding the Business Combination Agreement and the transactions contemplated therein, see the Current Reports on Form 8-K as filed with
the SEC by the Company on July 25, 2025, August 4, 2025, August 6, 2025, September 2, 2025 and September 9, 2025.
*LLC Unit Subscription Agreement*
On August 29, 2025, the SPAC,
Pubco and the LLC entered into the LLC Unit Subscription Agreement with (the LLC Unit Investor, pursuant to which the LLC Unit
Investor agreed to purchase, and the LLC agreed to issue and sell the Subscribed Units for a contribution of 150,000 ether, in
a private placement (the LLC Unit Subscription), upon the terms and subject to the conditions set forth therein. The closing
of the LLC Unit Subscription occurred on September 8, 2025. Immediately prior to the Company Merger (as defined in the Business Combination
Agreement), the Subscribed Units will be adjusted as set forth in the LLC Unit Subscription Agreement. At the Company Merger Effective
Time (as defined in the Business Combination Agreement), each Subscribed Unit (as adjusted) shall be converted automatically into one
common non-voting unit of the LLC (the LLC Exchange Units).
Pursuant to the LLC Unit
Subscription Agreement, Pubco agreed to use commercially reasonable efforts to cause the Pubco Class A Stock into which the LLC Exchange
Units held by the LLC Unit Investor will be converted or convertible upon closing of the Company Merger to be registered on the registration
statement on Form S-4 to be filed in connection with the Business Combination Agreement (as amended or supplemented from time to time,
the Registration Statement). To the extent such securities are not able to be registered on the Registration Statement,
Pubco has agreed to use commercially reasonable efforts to file a registration statement registering the resale of the shares of Pubco
Class A Stock on a resale registration statement within 30 calendar days following the Closing Date (as defined in the Business Combination
Agreement); and to use commercially reasonable efforts to have such registration statement declared effective as soon as practicable,
and in any event no later than 90 calendar days after the Closing Date, subject to an extension in the event of SEC review.
For additional information
regarding the LLC Unit Subscription Agreement and the transactions contemplated therein, see the Current Reports on Form 8-K as filed
with the SEC by the Company on September 2, 2025 and September 9, 2025.
58
*Stockholders Agreement*
On August 29, 2025, the Seller,
Pubco and the LLC entered into a Stockholders Agreement with the LLC Unit Investor (the Stockholders Agreement), which provides
for board composition and director nomination rights and sets forth certain governance provisions applicable to Pubco following the closing
of the business combination. For additional information regarding the Stockholders Agreement and the transactions contemplated therein,
see the Current Report on Form 8-K filed with the SEC by the Company on September 2, 2025.
**
*Registration Statement on Form S-4*
On September 16, 2025, Pubco
issued a press release announcing Pubcos confidential submission of a draft registration statement on Form S-4 with the Securities
and Exchange Commission.
Results of Operations
We have neither engaged in
any operations nor generated any revenues to date. Our only activities from June 13, 2024 (inception) through December 31, 2025 were organizational
activities, those necessary to prepare for the initial public offering, described below, identifying a target company for a business combination
and pursuing the consummation of the transaction contemplated by the Business Combination Agreement. We do not expect to generate any
operating revenues until after the completion of our initial business combination. We generate non-operating income in the form of dividends
earned on investments held in trust account. We incur 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 year ended December
31, 2025, we had a net loss of $13,223,196, which consisted of a change in fair value of warrant liabilities of $14,857,000 and general
and administrative expenses of $5,407,466, offset by dividends earned on investments held in trust account of $6,942,927, change in fair
value over-allotment liability of $64,371 and interest earned in cash account of $33,972.
For the period from June
13, 2024 (inception) through December 31, 2024, we had a net loss of $135,571, which consisted of changes in fair value of warrant liabilities
of $415,000, general and administrative expenses of $375,613, and transaction costs of $116,039, offset by dividends earned on investments
held in trust account of $749,825, change in fair value over-allotment liability of $12,792 and interest earned in cash account
of $8,464.
Liquidity and Capital Resources
Until the consummation of
the initial public offering, our only source of liquidity was an initial purchase of Class B ordinary shares, par value $0.0001 (the Class
B ordinary shares or Founder Shares), by the sponsor and loans from our sponsor.
On November 22, 2024, we
consummated the initial public offering of 16,600,000 Units, at $10.00 per Unit, generating gross proceeds of $166,000,000. Simultaneously
with the closing of the initial public offering, we consummated the sale of 5,985,000 private placement warrants at a price of $1.00 per
private placement warrant to the sponsor, generating gross proceeds of $5,985,000.
Following the initial public
offering, the partial exercise of the over-allotment option, and the sale of the private placement warrants, a total of $166,415,000 was
placed in the trust account. We incurred $10,605,256 in initial public offering related costs, including $3,320,000 of cash underwriting
fees, $6,640,000 of deferred underwriting fee, and $645,256 of other offering costs.
As an additional source of
liquidity, we may withdraw interest earned in the trust account to fund working capital requirements, subject to an annual limit of 10%
of interest earned on funds held in the Trust Account.
59
On February 4, 2025, we entered
into an advisory services agreement (the advisory services agreement) with Volta Tread LLC, an affiliate of our sponsor
owned and controlled by our chief executive officer and chief financial officer (the service provider). Pursuant to the
advisory services agreement, the service provider will provide management, consulting and other advisory services to the Company in connection
with its initial business combination. In consideration for these services, we will (i) pay to the service provider an annual fee, payable
on a monthly basis, until the consummation of a business combination, and (ii) reimburse the service provider and its affiliates for certain
costs and expenses incurred in favor of third parties. The annual fee, together with any reimbursement, shall not exceed an annual limit
of 10% of interest earned on funds held in the trust account (the Cap). For the year ended December 31, 2025 and for the
period from June 13, 2024 (inception) through December 31, 2024, the Company has paid the service provider $660,704 and $0, respectively,
pursuant to the advisory services agreement.
For the year ended December
31, 2025, net cash used in operating activities was $2,034,796. Net loss of $13,223,196 was affected by a change in fair value of warrant
liabilities of $14,857,000, dividends earned on investments held in trust account of $6,942,927 and change in fair value of over-allotment
liability of $64,371. Changes in operating assets and liabilities provided $3,338,698 of cash from operating activities.
For the period from June
13, 2024 (inception) through December 31, 2024, net cash used in operating activities was $132,820. Net loss of $135,571 was affected
by change in fair value of warrant liabilities of $415,000, transaction costs of $116,039, formation cost paid by sponsor in exchange
for issuance of founder shares of $16,241, payment of operation costs through promissory note of $15,420, dividends earned on investments
held in trust account $749,825, change in fair value of over-allotment liability of $12,792. Changes in operating assets and liabilities
provided $202,668 of cash from operating activities.
At December 31, 2025, we
had mutual funds which are invested primarily in money market funds held in the trust account of $173,392,824. We intend to use substantially
all of the funds held in the trust account (including any amounts representing dividends earned on investments held in trust account,
which dividends shall be net of taxes payable, if any, and excluding deferred underwriting fees) and not previously released to us pursuant
to permitted withdrawals, to complete our initial business combination. We may withdraw earnings from the trust account to pay taxes,
if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a 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.
At December 31, 2025, we
had cash of $223,698 held outside of the trust account. We intend to 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, structure, negotiate and complete a business combination.
In order to fund working
capital deficiencies or finance transaction costs in connection with a business combination, our sponsor or an affiliate of our sponsor
or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a business combination,
we may repay such loaned amounts out of the proceeds of the trust account released to us. 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 loaned amounts, but no proceeds from
our trust account would be used for such repayment. Up to $1,500,000 of such working capital loans may be convertible into private placement
warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical
to the private placement warrants.
60
Going Concern
In connection with our assessment
of going concern considerations in accordance with ASC 205-40 Presentation of Financial Statements - Going Concern, we have
incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. The working capital deficit
and the expectation of significant future costs raises substantial doubt about our ability to continue as a going concern within one year
after the date that the financial statements are issued. Management plans to address this uncertainty through debt or equity financing.
There is no assurance that our plans to raise capital or to consummate a business combination will be successful within the date that
is 24 months from the closing of our initial public offering (or until such earlier liquidation date as our board of directors may approve).
See Risk FactorsRisks Relating to our Search for, and Consummation of or Inability to Consummate, a Business CombinationOur
independent registered public accounting firms report contains an explanatory paragraph that expresses substantial doubt about
our ability to continue as a going concern.
Off-Balance Sheet Arrangements
We have no obligations, assets
or liabilities that would be considered off-balance sheet arrangements as of December 31, 2025 and 2024. We do not participate in transactions
that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which
would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off- balance
sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased
any non-financial assets.
Contractual Obligations
We do not have any long-term
debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an aggregate of
$30,000 per month for office space, utilities, and secretarial and administrative support services commencing on November 21, 2024 through
the earlier of the Companys consummation of a business combination and its liquidation.
In addition, pursuant to
the advisory services agreement, we will pay the service provider an annual fee, payable on a monthly basis, until the consummation of
a business combination. We will also reimburse the service provider and its affiliates for certain costs and expenses incurred in favor
of third parties. The annual fee, together with any reimbursement, shall not exceed the Cap.
On April 1, 2025, we entered
into a Master Services Agreement with Avenue Z Inc., under which we will pay $15,000 a month for recurring services related to the preparation,
development, and implementation of certain public relations programs and services.
The underwriters from our
initial public offering were entitled to a cash underwriting fee of $0.20 per Unit, or $3,320,000 in the aggregate. The deferred underwriting
fee will become payable to the underwriters, upon the completion of the Companys initial business combination, from the amounts
held in the trust account solely on amounts remaining in the trust account following all properly submitted shareholder redemptions in
connection with the consummation of the initial business combination. On July 20, 2025, we entered into a letter agreement pursuant to
which the underwriters agreed, if the closing of the initial business combination with the Pubco (the Pubco BC closing)
occurs, (a) that the only consideration due and payable by us pursuant to the underwriting agreement for the initial public offering shall
be a one-time cash fee equal to $500,000 (the Cash Fee) payable upon such closing, (b) to waive any rights to any additional
consideration under the underwriting agreement other than the Cash Fee, including deferred underwriting commission, and (c) to forfeit
2,070,000 private placement warrants immediately prior to the Pubco BC closing and retain 5,000 private placement warrants (which will
become warrants to purchase the same number of shares of Pubco Class A Stock at the Pubco BC closing).
61
Pursuant to a registration
rights agreement entered into on November 20, 2024, the holders of the founder shares, private placement warrants and any warrants that
may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the private placement
warrants and warrants that may be issued upon conversion of the working capital loans) will be entitled to registration rights. The holders
of the majority of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities.
In addition, the holders have certain piggy-back registration rights with respect to registration statements filed subsequent
to completion of a business combination. However, the registration rights agreement provides that we will not permit any registration
statement filed under the Securities Act to become effective until termination of the applicable lockup period. The registration rights
agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering our securities.
We will bear the expenses incurred in connection with the filing of any such registration statements.
Critical Accounting Estimates
The preparation of consolidated
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, disclosure of contingent
assets and liabilities at the date of the financial statements. Actual results could materially differ from those estimates. The Company
has not identified any critical accounting estimates that have a significant impact to our consolidated financial statements.
*Recent Accounting Pronouncements*
In November 2024, the FASB
issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation
of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in
the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December
15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating
the impact of adopting ASU 2024-03.
Management does not believe
that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Companys
consolidated financial statements.
Item 7A. Quantitative and Qualitative Disclosures
about Market Risk.
We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 8. Financial Statements and Supplementary
Data.
This information appears
following Item 15 of this Report and is included herein by reference.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed
with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed,
summarized, and reported within the time period specified in the SECs rules and forms. Disclosure controls are also designed with
the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer
and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
62
As required by Rules 13a-15 and 15d-15 under the
Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and
operation of our disclosure controls and procedures as of December 31, 2025. Based upon their evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) were effective.
Managements Report on Internal Controls
Over Financial Reporting
As required by SEC rules and regulations implementing
Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial
reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of our consolidated financial statements for external reporting purposes in accordance with GAAP. Our internal
control over financial reporting includes those policies and procedures that:
|
(1) | pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, |
|
|
(2) | provide reasonable assurance
that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that
our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and |
|
|
(3) | provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect
on the consolidated financial statements. |
|
Because of its inherent limitations, internal
control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal
control over financial reporting at December 31, 2025. In making these assessments, management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Integrated Framework (2013). Based on our assessments
and those criteria, management determined that we maintained effective internal control over financial reporting as of December 31, 2025.
This Annual Report on Form 10-K does not include
an attestation report of our independent registered public accounting firm due to our status as an emerging growth company under the JOBS
Act.
Changes in Internal Control over Financial
Reporting
There were no changes in our internal control
over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal
quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other
Information
None.
Item 9C. Disclosure
Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
63
PART
III
Item 10. Directors,
Executive Officers and Corporate Governance
Directors and Executive Officers
Our directors and officers are as follows:
|
Name | |
Age | |
Title | |
|
Andrea Bernatova | |
44 | |
Chief Executive Officer and Chairman | |
|
Nader Daylami | |
37 | |
Chief Financial Officer | |
|
Diaco Aviki | |
52 | |
Director | |
|
Tyler Crabtree | |
49 | |
Director | |
|
Lynn A. Peterson | |
72 | |
Director | |
|
Philip Rajan | |
41 | |
Vice President, M&A and Strategy | |
Andrea Andrejka Bernatovaservesas
our Chief Executive Officer and as a member of the board of directors. She currently serves as a director at Salt Creek Midstream LLC,
a midstream services provider. Additionally, she currently serves as Chief Executive Officer of Dynamix Corporation III, a special purpose
acquisition company, which completed its $201.25 million initial public offering in October 2025. Ms. Bernatova was the Chief Executive
Officer of ESGEN, a SPAC formed in 2021. ESGEN merged with Sunergy Renewables, LLC, a provider of residential solar energy systems, other
energy efficient equipment and related services, in March2024 and was renamed Zeo Energy Corp. Ms. Bernatova served as the CFO and
Senior Advisor of Enchanted Rock Energy, a resiliency microgrid company from 2019 to 2021. From 2018 to 2019, she was the CFO of Goodnight
Midstream, one of the largest midstream water infrastructure companies in the U.S.Prior to Goodnight, Ms. Bernatova was the co-founder,
EVP and CFO of Core Midstream, a venture infrastructure platform, from 2016 to 2018. Ms. Bernatova started her corporate career as the
Vice President of Finance and Investor Relations at PennTex Midstream Partners (NA:PTXP) from 2014 to 2016. At PennTex, she was
part of the management team which started the company, grew the platform significantly ultimately leading to an initial public offering
in 2015 and successfully exited the company via a sale to Energy Transfer Partners, L.P. (NYSE:ET) and Eagle Claw Midstream in 2016.
Prior to her corporate and entrepreneurial experiences, Ms. Bernatova was an investment banker at Morgan Stanley and Credit Suisse in
NewYork and Houston and served in investment roles at The Blackstone Group in NewYork and at Mubadala Development Company,
~$250B Abu Dhabi investment fund, based in the United Arab Emirates, where she focused primarily on transactions in the renewable sector
under the partnership with Masdar. Ms. Bernatova received her A.B. in Government from Harvard University with a Citation in Spanish. We
believe Ms. Bernatovas extensive knowledge of the energy industry, as well as her substantial business, leadership and management
experience, brings important and valuable skills to our board of directors.
Nader Daylamiservesas our Chief
Financial Officer. He currently serves as a director at CarbonPath, Inc. (CarbonPath), a company offering industrial
credit solutions to mitigate greenhouse gas emissions within the energy and industrial sectors. Additionally, he currently serves as Chief
Financial Officer of Dynamix III, a special purpose acquisition company, which completed its $201.25 million initial public offering in
October 2025. Mr.Daylami was the Chief Financial Officer of ESGEN, a SPAC formed in 2021. ESGEN merged with Sunergy Renewables,
LLC, a provider of residential solar energy systems, other energy efficient equipment and related services, in March2024 and was
renamed Zeo Energy Corp.Prior to ESGEN, Mr.Daylami served as the Executive Vice President, Finance& Business Development,
of Bruin E&P Partners, LLC (Bruin), a North American focused upstream oil and gas operator with over 400 operated
wells in North Dakota. Mr.Daylami was part of the management team that founded Bruin in 2015, joining as Director of Finance. At
Bruin, he and the management team grew the company significantly via acquisition and organic growth ultimately leading to an exit via
a sale to Enerplus Corporation (NYSE:ERF) in 2021. Prior to his time at Bruin, Mr.Daylami served in multiple strategic and
commercial roles at Ursa Resources GroupII LLC, an upstream oil and gas company focused on oil exploration in the East Texas Eagle
Ford shale and natural gas production in western Colorado. Mr.Daylami began his career as an investment banker at Morgan Stanley
focused on mergers and acquisitions and capital markets in the energy sector. Mr.Daylami holds bachelors degrees in Economics&
Mathematics from the University of California, San Diego.
64
Diaco Avikiservesas a member
of the board of directors. Additionally, he currently serves as a member of the board of directors of Dynamix III, a special purpose acquisition
company, which completed its $201.25 million initial public offering in October 2025. Mr.Aviki is currently President and the Chief
Executive Officer of Woodway Energy Infrastructure. He was previously the President, Chief Executive Officer and a board member of BayoTech,
Inc. Mr.Aviki joined Crestwood Midstream Partners LP (Crestwood) in 2017 as Chief Operating Officer, Business
Development and Commercial Operations for the Gathering and Processing Division, located in Houston, Texas. In this role, Mr.Aviki
led Crestwoods gathering and processing business development activities and strategy development. Crestwood was sold to Energy
Transfer LP at a valuation of $7.1billion in November2023. Mr.Aviki began his career with ExxonMobil Corporation (ExxonMobil)
in 1995, where he held various domestic and international positions in their downstream, chemicals, and gas marketing business units.
Mr.Aviki led the ExxonMobil gas marketing team involved with the commissioning of the ExxonMobil Golden Pass LNG Terminal where
it successfully completed a re-gassified LNG send-out (a process of sending LNG at high-pressure to an onshore pipeline) prior to joining
BHP Group Limited (BHP). At BHP, Mr.Aviki initially served as the Atlantic Basin Marketing Manager, integrating
the shale acquisitions from Petrohawk Energy Corporation and Chesapeake Energy Corporation. Prior to joining Crestwood, Mr.Aviki
served as the President of various midstream assets at BHP and led their commercial efforts. Mr.Aviki has a B.S. in Chemical Engineering
from Auburn University and has an M.B.A. in Finance from the University of Texas. He is an advisory board member for the Engineering College
and Chemical Engineering Department at Auburn University. We believe Mr.Avikisyears of experience and first-hand knowledge
of the energy industry qualify him to bring valuable and needed skills to our board of directors.
Tyler Crabtreeservesas a member
of the board of directors and chairman of the audit committee. Additionally, he currently serves as a member of the board of directors
of Dynamix III, a special purpose acquisition company, which completed its $201.25 million initial public offering in October 2025. Mr.Crabtree
has more than 25years of experience in finance, investments and operations primarily focused on energy and commodities industries.
He currently is the CEO of CarbonPath, a company offering industrial credit solutions to mitigate greenhouse gas emissions within the
energy and industrial sectors. Prior to forming CarbonPath, he launched, grew and sold Bruin, a North American focused upstream oil and
gas operator with over 400 operated wells in North Dakota between2015-2021, where he served on the executive team as Chief Financial
Officer. At Bruin, he was responsible for all aspects of finance and accounting including business strategy and planning, financial modelling
and reporting, capital raising, midstream commercial operations, insurance, and commodity and interest rate risk management. Prior to
Bruin, Mr.Crabtree served as CFO of Ursa Resources GroupII LLC, an upstream oil and gas company focused on oil exploration
in the East Texas Eagle Ford shale and natural gas production in western Colorado, from 2010 until 2015. Before his time in leadership
at Ursa, Mr.Crabtree worked at Denham Capital, an energy and commodity focused private equity firm, where he focused on energy services,
commodity processing and midstream investments. He began his energy career as an associate at El Paso Corporation in 2001 before joining
Jefferies, Randall& Dewey Ltd as an investment banker in 2004. During that time, he worked on the San Fernando Pipeline JV between
Petroleos Mexicanos and El Paso Corporation and on numerous power investments in Alberta Canada. Mr.Crabtree holds a bachelors
degree in History of Science from Princeton University. We believe Mr.Crabtrees extensive experience in the energy industry,
as well as his past executive leadership and management roles, brings valuable skills to our board of directors.
Lynn A.Petersonserves as a
member of the board of directors. Mr.Peterson is a seasoned industry professional with more than 40years of experience in
the oil and gas sector. Mr.Peterson held the position of Executive Chairman of the Board at Chord Energy Corporation (NYSE:CHRD)
from July2022 through December2023. He served as a director of Denbury Inc. from 2017 until its acquisition by ExxonMobil
in November2023 and as a director of PDC Energy (Nasdaq: PDCE), prior to its merger with Chevron Corporation. Mr.Peterson
brought valuable insights to the different companys operations, strategy, and business management. As a former CEO of an oil and
gas company, Mr.Petersons brings extensive industry knowledge and leadership skills to the DYNX Board. Mr.Peterson
previously served as President, Chief Executive Officer and a director of Whiting Petroleum Corporation (NYSE:WLL) from September2020
until its merger with Oasis Petroleum, Inc. in July2022, forming Chord Energy Corporation. Prior to Whiting, Mr.Peterson was
Chairman of the Board, Chief Executive Officer, and President of SRC Energy from 2015 to 2020, until the closing of its merger with PDC
Energy. Before SRC, Mr.Peterson was a co-founder of Kodiak Oil& Gas Corporation, serving as a director from 2001 to 2014;
President and Chief Executive Officer from 2002 to 2014; and Chairman of the Board from 2011 to 2014 until its acquisition by Whiting
Petroleum Corporation in December2014. Mr.Peterson graduated from the University of Northern Colorado with a Bachelor of Science
in Accounting. We believe his expertise will assist our board in making informed decisions focused on sustainable growth and success.
65
Philip Rajanhas servedas our
Vice President of M&A and Strategy since the commencement of the trading of our Unitson the Nasdaq. He also currently serves
as Executive Vice President of M&A and Strategy of Dynamix III, a special purpose acquisition company, which completed its $201.25
million initial public offering in October 2025. Mr.Rajan was a Senior Vice President at Intrepid Financial Partners, a leading
energy merchant bank (Intrepid), from October2021 to May2023. Prior to Intrepid, Mr.Rajan was a
Vice President at Credit Suisse from August2015 to September2021, where he focused on advising Upstream and Oilfield Service
clients on a range of strategic advisory, M&A, and capital markets transactions. Before that, Mr.Rajan held roles in the energy
groups of KeyBanc Capital Markets and Duff& Phelps, where he began his career. In total, Mr.Rajan has over 15years
of experience and has advised and managed over 35 transactions for an aggregate deal value of over $75billion. Mr.Rajan holds
a bachelors degree in Finance from the University of Texas at Austin and is also a CFA charter holder.
Number and Terms of Office of Officers and
Directors
Our board of directors consists of five members.
Prior to the closing of our initial business combination, only holders of our Class B ordinary shares will be entitled to vote on the
appointment and removal of directors or continuing our Company in a jurisdiction outside the Cayman Islands (including any special resolution
required to amend our constitutional documents or to adopt new constitutional documents, in each case, as a result of our approving a
transfer by way of continuation in a jurisdiction outside the Cayman Islands). Holders of our public shares will not be entitled to vote
on such matters during such time. These provisions of our amended and restated memorandum and articles of association relating to these
rights of holders of Class B ordinary shares may be amended by a special resolution passed by the affirmative vote of at least 90% (or,
where such amendment is proposed in respect of the consummation of our initial business combination, two-thirds) of the votes cast by
such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting
of the Company. In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until
one year after our first fiscal year end following our listing on Nasdaq.
Our officers are appointed by the board of directors
and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized
to appoint officers as it deems appropriate pursuant to our amended and restated memorandum and articles of association.
Committees of the Board of Directors
Our board of directors has two standing committees:
an audit committee and a compensation committee. The rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee
of a listed company be comprised solely of independent directors. Each committee operates under a charter that has been approved by our
board and has the composition and responsibilities described below. The charter of each committee is available on our website.
Audit Committee
Tyler Crabtree, Diaco Aviki and Lynn A. Peterson
serve as the members of our audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have three
members of the audit committee, all of whom must be independent. Tyler Crabtree, Diaco Aviki and Lynn A. Peterson are each independent.
Tyler Crabtree serves as the chairman of the audit
committee. Each member of the audit committee is financially literate and our board of directors has determined that qualifies as an audit
committee financial expert as defined in applicable SEC rules.
We have adopted an audit committee charter, which
details the principal functions of the audit committee, including:
|
| assisting board oversight of (1) the integrity of our financial
statements, (2) our compliance with legal and regulatory requirements, (3) our independent registered public accounting firms
qualifications and independence, and (4) the performance of our internal audit function and independent registered public accounting
firm; the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting
firm and any other independent registered public accounting firm engaged by us; |
|
66
|
| pre-approving all audit and non-audit services to be provided
by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval
policies and procedures; reviewing and discussing with the independent registered public accounting firm all relationships the independent
registered public accounting firm have with us in order to evaluate their continued independence; |
|
|
| setting clear policies for audit partner rotation in compliance
with applicable laws and regulations; obtaining and reviewing a report, at least annually, from the independent registered public accounting
firm describing (1) the independent registered public accounting firms internal quality-control procedures and (2) any material
issues raised by the most recent internal quality-control review, or peer review, of the independent registered public accounting firm,
or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more
independent audits carried out by the firm and any steps taken to deal with such issues; |
|
|
| meeting to review and discuss our annual audited financial
statements and quarterly financial statements with management and the independent registered public accounting firm, including reviewing
our specific disclosures under Managements Discussion and Analysis of Financial Condition and Results of Operations;
reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by
the SEC prior to us entering into such transaction; and |
|
|
| reviewing with management, the independent registered public
accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with
regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial
statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting
Standards Board, the SEC or other regulatory authorities. |
|
Compensation Committee
The members of our compensation committee are
Lynn A. Peterson and Diaco Aviki, who serves as chair of the compensation committee. Under the Nasdaq listing standards and applicable
SEC rules, we are required to have a compensation committee of at least two members, all of whom must be independent. Lynn A. Peterson
and Diaco Aviki are each independent. We have adopted a compensation committee charter, which will detail the principal functions of the
compensation committee, including:
|
| reviewing and approving on an annual basis the corporate goals
and objectives relevant to our chief executive officers compensation, evaluating our chief executive officers performance
in light of such goals and objectives and determining and approving the remuneration (if any) of our chief executive officers
based on such evaluation; |
|
|
| reviewing and making recommendations to our board of directors
with respect to the compensation, and any incentive compensation and equity based plans that are subject to board approval of all of
our other officers; |
|
|
| reviewing our executive compensation policies and plans; |
|
|
| implementing and administering our incentive compensation
equity-based remuneration plans; |
|
|
| assisting management in complying with our proxy statement
and annual report disclosure requirements; |
|
|
| approving all special perquisites, special cash payments and
other special compensation and benefit arrangements for our executive officers and employees; |
|
|
| producing a report on executive compensation to be included
in our annual proxy statement; and |
|
|
| reviewing, evaluating and recommending changes, if appropriate,
to the remuneration for directors. |
|
The charter also provides that the compensation
committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will
be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving
advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence
of each such adviser, including the factors required by Nasdaq and the SEC.
67
Nominating and Corporate Governance Committee
We do not have a standing nominating committee
though we intend to form a corporate governance and nominating committee as and when required to do so by law or Nasdaq rules. In accordance
with Rule 5605(e)(2) of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection by our
board of directors. Our board of directors believes that the independent directors can satisfactorily carry out the responsibility of
properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who will participate
in the consideration and recommendation of director nominees are Diaco Aviki, Tyler Crabtree and Lynn A. Peterson. In accordance with
Rule 5605(e)(1)(A) of the Nasdaq rules, all such directors are independent. As there is no standing nominating committee, we do not have
a nominating committee charter in place.
Compensation Committee Interlocks and Insider
Participation
None of our executive officers currently serves,
or in the past year has served, as a member of the compensation committee of any entity that has one or more executive officers serving
on our board of directors.
Code of Ethics
We have adopted a Code of Ethics applicable to
our directors, officers and employees. We have filed a copy of our Code of Ethics as an exhibit to this Annual Report. Our Code of Ethics
is also posted on our website located at https://dynamix-corp.com. If we make any amendments to our Code of Ethics other than technical,
administrative or other non-substantive amendments, or grant any waiver, including any implicit waiver, from a provision of the Code of
Ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller or persons
performing similar functions requiring disclosure under applicable SEC or Nasdaq rules, we will disclose the nature of such amendment
or waiver in a Current Report on Form 8-K.
Insider Trading Policy
Our Code of Ethics includes insider trading policy
and procedures governing the purchase, sale, and other transactions in our Companys securities by the Companys directors,
officers, and employees that we believe are reasonably designed to promote compliance with insider trading laws, rules, and regulations
and Nasdaq listing standards.
Conflicts of Interest
Under Cayman Islands law, directors and officers
owe the following fiduciary duties:
|
| duty to act in good faith in what the director or officer
believes to be in the best interests of the company as a whole; |
|
|
| duty to exercise powers for the purposes for which those powers
were conferred and not for a collateral purpose; |
|
|
| duty to not improperly fetter the exercise of future discretion; |
|
|
| duty to exercise authority for the purpose for which it is
conferred and a duty to exercise powers fairly as between different sections of shareholders; |
|
|
| duty not to put themselves in a position in which there is
a conflict between their duty to the company and their personal interests; and |
|
|
| duty to exercise independent judgment. |
|
68
In addition to the above, directors
also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent
person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions
as are carried out by that director in relation to the company and the general knowledge, skill and experience of that director.
As set out above, directors
have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit
as a result of their position at the expense of the Company. However, in some instances what would otherwise be a breach of this duty
can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be
done by way of permission granted in the amended and restated memorandum and articles of association or alternatively by shareholder approval
at general meetings. Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual
or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present
a business combination opportunity to such entities. Accordingly, if any of our officers or directors becomes aware of a business combination
opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will honor
his or her fiduciary or contractual obligations to present such business combination opportunity to such other entity, subject to their
fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provide that, to the fullest
extent permitted by law: (i) no individual serving as a director or an officer, among other persons, shall have any duty, except and to
the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or
lines of business as us, and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any
potential transaction or matter which (a) may be a corporate opportunity for any director or officer, on the one hand, and us, on the
other or (b) the presentation of which would breach an existing legal obligation of a director or officer to any other entity. We do not
believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability
to complete our initial business combination, because the entities to which our officers and directors owe fiduciary duties or contractual
obligations (as described below) are not themselves in the business of engaging in business combinations.
Below is a table summarizing
the entities to which our officers and directors currently have fiduciary duties or contractual obligations
|
Individual(1) |
|
Entity |
|
Entitys Business |
|
Affiliation | |
|
Andrea Bernatova |
|
Salt Creek Midstream LLC |
|
Oil& Gas (Midstream) |
|
Director | |
|
|
Dynamix Corporation III |
|
Special purpose acquisition company |
|
Chief Executive Officer and Chairman | |
|
|
DynamixCore Holdings III, LLC |
|
Holding company |
|
Managing Member | |
|
Nader Daylami |
|
CarbonPath, Inc. |
|
Software (Greenhouse gas emissions) |
|
Director | |
|
|
|
Dynamix Corporation III |
|
Special purpose acquisition company |
|
Chief Financial Officer | |
|
Diaco Aviki |
|
Woodway Energy Infrastructure |
|
Oil&Gas |
|
President and Chief Executive Officer | |
|
|
|
Dynamix Corporation III |
|
Special purpose acquisition company |
|
Director | |
|
Tyler Crabtree |
|
CarbonPath, Inc. |
|
Software (Greenhouse gas emissions) |
|
Chief Executive Officer | |
|
|
|
Dynamix Corporation III |
|
Special purpose acquisition company |
|
Director | |
|
Lynn A. Peterson |
|
Chord Energy Corporation |
|
Oil & Gas |
|
Chairman | |
|
Philip Rajan |
|
Thornhill Oaks Capital LLC |
|
Financial Services |
|
Managing Member | |
|
|
|
Dynamix Corporation III |
|
Special purpose acquisition company |
|
Executive Vice President of M&A and Strategy | |
|
(1) | Each individual listed has a fiduciary duty with respect to each of the listed entities opposite from
his/her name. | |
69
In addition, our sponsor and
our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business
or investment ventures during the period in which we are seeking an initial business combination. As a result, our sponsor, officers and
directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other
special purpose acquisition company with which they may become involved. Any such companies, businesses or investments may present additional
conflicts of interest in pursuing an initial business combination target. However, we do not believe that any such potential conflicts
would materially affect our ability to complete our initial business combination.
Potential investors should also
be aware of the following other potential conflicts of interest:
|
| Our officers and directors are not required to, and will not,
commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and
our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion
of our initial business combination. Each of our officers is engaged in several other business endeavors for which he may be entitled
to substantial compensation, and our officers are not obligated to contribute any specific number ofhours per week to our affairs. |
|
|
| Our initial shareholders purchased founder shares prior to
the closing of our initial public offering and purchased private placement warrants in a transaction that closed simultaneously with
the closing of our initial public offering. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant
to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with
the completion of our initial business combination. Additionally, our sponsor, officers and directors have agreed to waive their rights
to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business
combination within the prescribed time frame, although they will be entitled to liquidating distributions from assets outside the trust
account. If we do not complete our initial business combination within the prescribed time frame, the private placement warrants will
expire worthless. Furthermore, our sponsor, officers and directors have agreed not to transfer, assign or sell any of their founder shares
and any ClassA ordinary shares issuable upon conversion thereof until the earlier to occur of: (i)one year after the completion
of our initial business combination and (ii)the date following the completion of our initial business combination on which we complete
a liquidation, merger, share exchange or other similar transaction that results in all of our shareholders having the right to exchange
their ordinary shares for cash, securities or other property. Notwithstanding the foregoing, if the closing price of our ClassA
ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations
and the like) for any 20trading days within any 30-tradingday period commencing at least 150days after our initial
business combination, the founder shares will be released from the lockup. The private placement warrants (including the ClassA
ordinary shares issuable upon exercise of the private placement warrants) will not be transferable until 30days following the completion
of our initial business combination. Because each of our officers and directors will own ordinary shares or warrants directly or indirectly,
they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate
our initial business combination. |
|
|
| Our officers and directors may have a conflict of interest
with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included
by a target business as a condition to any agreement with respect to our initial business combination. |
|
|
| Our sponsor paid only a nominal aggregate purchase price of
$25,000 for the founder shares, or approximately $0.004 per share. Accordingly, our management team, which owns interests in our sponsor,
may be more willing to pursue a business combination with a riskier or less-established target business than would be the case if our
sponsor had paid the same per share price for the founder shares as our public shareholders paid for their public shares. |
|
|
| Our sponsor agreed to loan us up to $300,000 to be used for
a portion of the expenses of our initial public offering. In the event our sponsor or members of our management team provide additional
loans to us to finance transaction costs and/or incur expenses on our behalf in connection with an initial business combination, such
persons may have a conflict of interest in determining whether a particular target business is an appropriate business with which to
effectuate our initial business combination as such loans may not be repaid and/or such expenses may not be reimbursed unless we consummate
such business combination. |
|
70
|
| Our officers, independent directors, advisors or their affiliates
may be paid consulting, success, or finder fees upon the successful completion of our initial business combination. |
|
|
| In the event that we seek to complete our initial business
combination with a company that is affiliated with our sponsor, officers or directors (or their respective affiliates or related entities),
we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent
firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm
that our initial business combination is fair to our Company from a financial point of view. We are not required to obtain such an opinion
in any other context. |
|
|
| We entered into an advisory services agreement with Volta,
which is an affiliate of our sponsor owned and controlled by Andrea Bernatova and Nader Daylami, our chief executive officer and chief
financial officer, respectively. Pursuant to the advisory services agreement, we will pay Volta an annual fee, payable on a monthly basis,
until the consummation of a business combination. We will also reimburse the service provider and its affiliates for certain costs and
expenses incurred in favor of third parties. Such annual fee, together with any reimbursement, shall not exceed the Cap. |
|
Members of our management team directly or indirectly
own our founders shares, ClassA ordinary shares and/or private placement warrants, and, accordingly, may have a conflict of interest
in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
In particular, because the founder shares were purchased at approximately $0.004 per share, the holders of our founder shares (including
members of our management team that directly or indirectly own founder shares) could make a substantial profit after our initial business
combination even if our public shareholders lose money on their investment as a result of a decrease in the post-combination value of
their ordinary shares (after accounting for any adjustments in connection with an exchange or other transaction contemplated by the business
combination).
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our sponsor, officers, directors or advisors (or their respective affiliates
or related entities). In the event that we seek to complete our initial business combination with a company that is affiliated (as defined
in our amended and restated memorandum and articles of association) with our sponsor, officers, directors or advisors (or their respective
affiliates or related entities), we, or a committee of independent directors, will obtain an opinion from an independent investment banking
firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an
independent accounting firm that our initial business combination is fair to our Company from a financial point of view. We are not required
to obtain such an opinion in any other context.
Prior to or in connection with the completion
of our initial business combination, there may be payment by the Company to our officers, independent directors, advisors, or their respective
affiliates, of a finders fee, advisory fee, consulting fee or success fee for any services they render in order to effectuate the
completion of our initial business, which, if made prior to the completion of our initial business combination, will be paid from funds
held outside the trust account, including permitted withdrawals from the trust account.
We cannot assure you that any of the above-mentioned
conflicts will be resolved in our favor.
In the event that we submit our initial business
combination to our public shareholders for a vote, our sponsor, officers and directors have agreed to vote their founder shares, and they
and the other members of our management team have agreed to vote their founder shares and any shares purchased during or after the offering
in favor of our initial business combination.
Limitation on Liability and Indemnification
of Officers and Directors
Cayman Islands law does not limit the extent to
which a companys memorandum and articles of association may provide for indemnification of officers and directors, except to the
extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against willful default, willful neglect, actual fraud or the consequences of committing a crime. Our amended and restated memorandum
and articles of association will provide that our officers and directors will be indemnified by us to the fullest extent permitted by
law, as it now exists or may in the future be amended, including for any liability incurred in their capacities as such, except through
their own actual fraud, willful default or willful neglect. We expect to purchase a policy of directors and officers liability
insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances
and insures us against our obligations to indemnify our officers and directors.
Our officers and directors have agreed, and any
persons who may become officers or directors prior to the initial business combination will agree, to waive any right, title, interest
or claim of any kind in or to any monies in the trust account, and to waive any right, title, interest or claim of any kind they may have
in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for
any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares).
Accordingly, any indemnification provided will only be able to be satisfied by us if (i)we have sufficient funds outside of the
trust account or (ii)we consummate an initial business combination.
Our indemnification obligations may discourage
shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have
the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful,
might otherwise benefit us and our shareholders. Furthermore, a shareholders investment may be adversely affected to the extent
we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the insurance
and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
71
Item 11. Executive
Compensation
None of our executive officers or directors have
received any cash compensation for services rendered to us. Other than quarterly audit committee review of such reimbursements or payments,
we do not expect to have any additional controls in place governing our reimbursement or payments to our directors and executive officers
for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating
an initial business combination.
We are not prohibited from paying any fees (including
advisory fees), reimbursements or cash payments to our sponsor, officers or directors, or our or their affiliates, for services rendered
to us prior to or in connection with the completion of our initial business combination, including the following payments, all of which,
if made prior to the completion of our initial business combination, will be paid from funds held outside the trust account or pursuant
to permitted withdrawals:
|
| Repayment of up to an aggregate of $300,000 in loans made
to us by our sponsor to cover offering-related and organizational expenses; |
|
|
| Reimbursement for utilities and secretarial and administrative
support made available to us by Volta, an affiliate of our sponsor, which is owned and controlled by Andrea Bernatova and Nader Daylami,
our chief executive officer and chief financial officer, in an amount equal to $30,000 per month; |
|
|
| Payment of consulting, success or finder fees to our officers,
independent directors, officers, advisors, consultants or their respective affiliates in connection with and prior to the consummation
of our initial business combination; |
|
|
| Payment of an annual fee (payable on a monthly basis) to Volta
and reimbursement of Volta for third party costs and expenses incurred, in each case in connection with the services rendered by Volta
under the advisory services agreement, with the aggregate payable amount subject to the Cap; |
|
|
| We may engage our sponsor or an affiliate of our sponsor as
an advisor or otherwise in connection with our initial business combination and certain other transactions and pay such person or entity
a salary or fee in an amount that constitutes a market standard for comparable transactions; |
|
|
| Reimbursement for any out-of-pocket expenses related to identifying,
investigating, negotiating and completing an initial business combination; and |
|
|
| Repayment of loans which may be made by our sponsor or an
affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial
business combination. Up to $1,500,000 of such loans may be convertible into private placement warrants of the post-business combination
entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants. |
|
After the completion of our initial business combination,
directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All
of these fees will be fully disclosed to shareholders, to the extent then known, in the proxy solicitation materials or tender offer materials
furnished to our shareholders in connection with a proposed initial business combination. We have not established any limit on the amount
of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation
will be known at the time of the proposed initial business combination, because the directors of the post-combination business will be
responsible for determining executive officer and director compensation.
We do not intend to take any action to ensure
that members of our management team maintain their positions with us after the consummation of our initial business combination, although
it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with us after
our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with
us may influence our managements motivation in identifying or selecting a target business but we do not believe that the ability
of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision
to proceed with any potential business combination. We are not party to any agreements with our officers and directors that provide for
benefits upon termination of employment.
In addition, for their services
as a director or an officer, as applicable, Messrs. Aviki, Crabtree, Peterson and Rajan each received membership interests in our sponsor
representing 25,000 founder shares.
72
Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
The following table sets forth information regarding
the beneficial ownership of our Class A ordinary shares and Class B ordinary shares as of March 3, 2026 by:
|
| each person known by us to be the beneficial owner of more
than 5% of our issued and outstanding ordinary shares; |
|
|
| each of our officers and directors; and |
|
|
| all our executive officers and directors as a group. |
|
Unless otherwise indicated,
we believe that all persons named in the table have sole voting and investment power with respect to all of our ordinary shares beneficially
owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants
are not exercisable within 60 days of the date of this Annual Report on Form 10-K.
|
| |
ClassB Ordinary Shares | | |
ClassA Ordinary Shares | | |
| | |
|
Name and Address of Beneficial Owner(1) | |
Number of
Shares
Beneficially
Owned(2) | | |
Approximate
Percentage
of Class | | |
Number of
Shares
Beneficially
Owned | | |
Approximate
Percentage
of Class | | |
Approximate
Percentage
of Voting
Control | | |
|
Meteora Capital, LLC(3) | |
| | | |
| | | |
| 2,473,400 | | |
| 14.9 | % | |
| 11.2 | % | |
|
DynamixCore Holdings, LLC(4) | |
| 5,533,333 | | |
| 100 | % | |
| | | |
| | | |
| 25 | % | |
|
Andrea Bernatova(4) | |
| 5,533,333 | | |
| 100 | % | |
| | | |
| | | |
| 25 | % | |
|
Nader Daylami(5) | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Diaco Aviki(6) | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Tyler Crabtree(6) | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Lynn A. Peterson(6) | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Philip Rajan(6) | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
All officers and directors as a group (six persons) | |
| 5,533,333 | | |
| 100 | % | |
| | | |
| | | |
| 25 | % | |
|
* | Less than one percent. |
|
|
(1) | Unless otherwise noted, the business address of each of our
shareholders is 1815 Central Park Drive, Suite 1000, PMB380, Steamboat Springs, Colorado80487-8886. |
|
|
(2) | Interests shown consist solely of founder shares, classified
as ClassB ordinary shares. Such shares will automatically convert into ClassA ordinary shares concurrently with or immediately
following the consummation of our initial business combination or at any time prior thereto at the option of the holder on a one-for-one
basis, subject to adjustment. |
|
|
(3) | Based on the Schedule 13G filed with the SEC on February 6, 2026 by Meteora Capital, LLC.
According to its Schedule 13G, Meteora Capital, LLC reported having shared voting power over 2,473,400 Class A ordinary shares, sole
voting power over no shares, shared dispositive power over 2,473,400 Class A ordinary shares and sole dispositive power over no shares.
The Schedule 13G contained information as of December 31, 2025. The address of Meteora Capital, LLC is 1200 N Federal Hwy, #200, Boca
Raton FL 33432. |
|
|
(4) | DynamixCore Holdings, LLC, our sponsor, is the record holder
of founder shares. Andrejka Bernatova, our Chief Executive Officer, is the sole managing member of DynamixCore Holdings, LLC. Accordingly,
Ms.Bernatova may be deemed to have or share beneficial ownership of the ClassB ordinary shares held directly by our sponsor.
Ms. Bernatova disclaims such beneficial ownership other than to the extent of her pecuniary interest. Each of our other officers and
directors is a member of our sponsor or has direct or indirect economic interests in our sponsor, and each of them disclaims any beneficial
ownership other than to the extent of his or her pecuniary interest. |
|
|
(5) | Mr. Daylami has an indirect interest in our founder shares through membership interests in our sponsor. | |
|
(6) | For their services as a director or an officer, as applicable, Messrs. Aviki, Crabtree, Peterson and Rajan
each received membership interests in our sponsor representing 25,000 founder shares. | |
73
Our initial shareholders beneficially own 25%
of the issued and outstanding ordinary shares. Prior to the closing of our initial business combination, only holders of our Class B ordinary
shares will be entitled to vote on the appointment and removal of directors or continuing our Company in a jurisdiction outside the Cayman
Islands (including any special resolution required to amend our constitutional documents or to adopt new constitutional documents, in
each case, as a result of our approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). Because of this
ownership block, our initial shareholders may be able to effectively influence the outcome of all other matters requiring approval by
our shareholders, including the appointment of directors or continuing the Company in a jurisdiction outside the Cayman Islands (including
any special resolution required to amend our constitutional documents or to adopt new constitutional documents, in each case, as a result
of our approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands), and approval of significant corporate
transactions including our initial business combination.
Our sponsor and the underwriters purchased an
aggregate of 5,985,000 private placement warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price
of $1.00 per warrant, or $5,985,000 in the aggregate, in a private placement that closed simultaneously with the closing of our initial
public offering.
The private placement warrants are identical to
the warrants sold in our initial public offering except that the private placement warrants do not include a warrant put right and, so
long as they are held by our sponsor or its permitted transferees, the private placement warrants (i) may not (including the Class A ordinary
shares issuable upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders
until 30 days after the completion of our initial business combination, (ii) will be entitled to registration rights and (iii) with respect
to private placement warrants held by the underwriters and/or their designees, will not be exercisable more than five years from the commencement
of sales in our initial public offering in accordance with FINRA Rule 5110(g)(8). If we do not complete our initial business combination
within the completion window, the private placement warrants will expire worthless. The private placement warrants are subject to the
transfer restrictions described below.
DynamixCore Holdings, LLC, our sponsor, and our
officers and directors are deemed to be our promoters as such term is defined under the federal securities laws.
Item 13. Certain
Relationships and Related Transactions, and Director Independence
**
*Founder Shares*
On June18, 2024, our sponsor
paid $25,000, or approximately $0.004 per share, to cover certain of our offering costs in exchange for 5,750,000 founder shares. On January
7, 2025, the sponsor surrendered 216,667 founder shares for no value, resulting in 5,533,333 Class B ordinary shares outstanding. For
their services as a director or an officer, as applicable, Messrs. Aviki, Crabtree, Peterson and Rajan each received membership interests
in our sponsor representing 25,000 founder shares.
**
*Private Placement Warrants*
Our sponsor and the underwriters
purchased 3,910,000 private placement warrants and 2,075,000 private placement warrants, respectively, each exercisable to purchase one
Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, in a private placement that closed simultaneously with the
closing of our initial public offering. The private placement warrants are identical to the warrants sold in our initial public offering
except that the private placement warrants do not include a warrant put right and, so long as they are held by our sponsor or its permitted
transferees, the private placement warrants (i)may not (including the ClassA ordinary shares issuable upon exercise of these
warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30days after the completion
of our initial business combination, (ii)will be entitled to registration rights and (iii)with respect to private placement
warrants held by the underwriters and/or their designees, will not be exercisable more than fiveyears from the commencement of sales
in our initial public offering in accordance with FINRA Rule5110(g)(8).
**
*Warrant Put Right*
In connection with the completion
of our business combination, each holder of public warrants will have the right to require our sponsor to repurchase or cause one of its
affiliates, including the Company, to repurchase, at $0.65 per public warrant (exclusive of commissions), our outstanding public warrants
held by such holder. We expect any repurchase of the public warrants to be funded with proceeds raised in connection with private placements
in connection with the closing of our initial business combination or funds released from the trust account to us that are not used for
payment of the consideration in connection with our initial business combination. We currently anticipate that any repurchase of the public
warrants will be conducted pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, including the filing of tender offer documents
with the SEC prior to the completion of our initial business combination. Any tender offer to repurchase the public warrants will remain
open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act.
If we are unable to complete
our business combination, there will be no requirement for our sponsor to repurchase, or to cause one of its affiliates to repurchase,
our public warrants. Also, we cannot assure you that our sponsor or we will have sufficient funds to repurchase public warrants pursuant
to the holders exercise of the warrant put rights.
**
**
74
**
*Fees and Reimbursements*
Prior to or in connection with
the completion of our initial business combination, there may be payment by the Company to our officers, independent directors, advisors,
or their respective affiliates, of a finders fee, advisory fee, consulting fee or success fee for any services they render in order
to effectuate the completion of our initial business, which, if made prior to the completion of our initial business combination, will
be paid from funds held outside the trust account, including permitted withdrawals from the trust account.
We will reimburse Volta, an
affiliate of our sponsor owned and controlled by our chief executive officer and chief financial officer, in an amount equal to $30,000
per month for utilities and secretarial and administrative support made available to us. Upon completion of our initial business combination
or our liquidation, we will cease paying these monthly fees.
We will also pay to Volta, the service provider
under the advisory services agreement, an annual fee, payable on a monthly basis, until the consummation of a business combination. We
will also reimburse the service provider and its affiliates for certain costs and expenses incurred in favor of third parties. The annual
fee, together with any reimbursement, shall not exceed the Cap. In 2025, the Company has paid $184,301 in fees under the advisory services
agreement.
**
*Loans*
In order to finance transaction
costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers
and directors may, but are not obligated to, loan us funds as may be required on a non-interest basis. If we complete an initial business
combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use amounts
held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment.
Up to $1,500,000 of such loans may be convertible
into private placement warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. Such
warrants would be identical to the private placement warrants. Except as set forth above, the terms of such loans, if any, have not been
determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we
do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will
be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
Any of the foregoing payments
to our sponsor, repayments of loans from our sponsor or repayments of working capital loans prior to our initial business combination
will be made using funds held outside the trust account, including permitted withdrawals from the trust account.
We have until the date that
is 24months from the closing of our initial public offering or until such earlier liquidation date as our board of directors may
approve, to consummate our initial business combination. If we anticipate that we may be unable to consummate our initial business combination
within such 24-month period, we may seek shareholder approval to amend our amended and restated memorandum and articles of association
to extend the date by which we must consummate our initial business combination. If we seek shareholder approval for an extension, holders
of public shares will be offered an opportunity to redeem their shares, regardless of whether they abstain, vote for, or against, our
initial business combination, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
including interest earned thereon (net of taxes payable) and not previously released to us pursuant to permitted withdrawals, divided
by the number of then issued and outstanding public shares, subject to applicable law.
After our initial business combination,
members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any
and all amounts being fully disclosed to our shareholders, to the extent then known, in the proxy solicitation or tender offer materials,
as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution
of such tender offer materials or at the time of a general meeting held to consider our initial business combination, as applicable, as
it will be up to the directors of the post-combination business to determine executive and director compensation.
75
Policy for Approval of Related Party Transactions
The audit committee of our board
of directors operates pursuant to a policy, which sets forth the policies and procedures for its review and approval or ratification of
related party transactions. A related party transaction is any consummated or proposed transaction or series
of transactions: (i)in which the Company was or is to be a participant; (ii)the amount of which exceeds (or is reasonably
expected to exceed) the lesser of $120,000 or 1% of the average of the Companys total assets at year end for the prior two completed
fiscalyears in the aggregate over the duration of the transaction (without regard to profit or loss); and (iii)in which a
related party had, has or will have a direct or indirect material interest. Related parties under this policy
includes: (i)our directors, nominees for director or officers or any person who has served in such roles since the beginning of
the most recent fiscal year, even if he or she does not currently serve in that role; (ii)any record or beneficial owner of more
than 5% of any class of our voting securities; (iii)any immediate family member of any of the foregoing if the foregoing person
is a natural person; and (iv)any other person who maybe a related person pursuant to Item404 of RegulationS-K
under the ExchangeAct. Pursuant to the policy, the audit committee will consider (i)the relevant facts and circumstances of
each related party transaction, including if the transaction is on terms comparable to those that could be obtained in arms-length
dealings with an unrelated third party, (ii)the extent of the related partys interest in the transaction, (iii)whether
the transaction contravenes our code of ethics or other policies, (iv)whether the audit committee believes the relationship underlying
the transaction to be in the best interests of the Company and its shareholders and (v)if the related party is a director or an
immediate family member of a director, the effect that the transaction may have on a directors status as an independent member
of the board and on his or her eligibility to serve on the boards committees. Management will present to the audit committee each
proposed related party transaction, including all relevant facts and circumstances relating thereto. Under the policy, we may consummate
related party transactions only if our audit committee approves or ratifies the transaction in accordance with the guidelines set forth
in the policy. The policy does not permit any director or officer to participate in the discussion of, or decision concerning, a related
person transaction in which he or she is the related party.
Director Independence
Nasdaq rules require that a majority of our board
of directors be independent within one year of our initial public offering. An independent director is defined generally
as a person who, in the opinion of the companys board of directors, has no material relationship with the listed company (either
directly or as a partner, shareholder or officer of an organization that has a relationship with the company). We have three independent
directors as defined in Nasdaq rules and applicable SEC rules. Our board of directors has determined Diaco Aviki, Tyler Crabtree
and Lynn A. Peterson are independent directors as defined in Nasdaq listing standards and applicable SEC rules. Our independent
directors will have regularly scheduled meetings at which only independent directors are present.
Item 14. Principal
Accountant Fees and Services
The firm of WithumSmith+Brown,
PC, or Withum, acts as our independent registered public accounting firm. The following is a summary of fees paid to Withum for services
rendered.
**
*Audit Fees*.
For the year ended December 31, 2025 and during the period from June 13, 2024 (inception) through December 31, 2024, fees for
our independent registered public accounting firm were $165,760 and $113,360, respectively, for the services Withum performed in connection with our initial
public offering and the audit of our financial statements included in the Annual Reports on Form 10-K.
**
*Audit-Related Fees*. During
the period from June 13, 2024 (inception) through December 31, 2025, our independent registered public accounting firm did not render
assurance and related services related to the performance of the audit or review of financial statements.
**
*Tax Fees*. During the
period from June 13, 2024 (inception) through December 31, 2025, our independent registered public accounting firm did not render services
to us for tax compliance, tax advice and tax planning.
**
*All Other Fees*. During
the period from June 13, 2024 (inception) through December 31, 2025, there were no fees billed for products and services provided by our
independent registered public accounting firm other than those set forth above.
**
*Pre-Approval
Policy*
Our audit committee was formed
upon the consummation of our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services,
although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation
of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted
non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions
for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
76
PART IV
Item 15. Exhibits, Financial Statements Schedules
|
(a) | The following documents are filed
as part of this Annual Report: |
|
|
(1) | Financial Statements |
|
See the Index
to the Financial Statements commencing on page F-1 of this Form 10-K.
|
(2) | Financial Statements Schedules |
|
None.
|
(3) | Exhibits |
|
We hereby file as part of this Report the exhibits
listed in the attached Exhibit Index.
|
ExhibitNo. |
|
Description | |
|
2.1 |
|
Business Combination Agreement, dated July 21, 2025 (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on July 25, 2025) | |
|
3.1 |
|
Amended and Restated Memorandum and Articles of Association (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on November 22, 2024) | |
|
4.1 |
|
Warrant Agreement, dated November 20, 2024, between the registrant and Odyssey Transfer and Trust Company (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on November 22, 2024) | |
|
4.2 |
|
Description of Securities Registered under Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.2 to the registrants Annual Report on Form 10-K, filed with the SEC on March 20, 2025) | |
|
10.1 |
|
Letter Agreement, dated November 20, 2024, among the registrant, DynamixCore Holdings, LLC and each of the officers and directors of the registrant (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on November 22, 2024) | |
|
10.2 |
|
Investment Management Trust Account Agreement, dated as of November 20, 2024, between Odyssey Transfer and Trust Company and the registrant (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on November 22, 2024) | |
|
10.3 |
|
Registration Rights Agreement, dated as of November 20, 2024, between the registrant and certain security holders (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on November 22, 2024) | |
|
10.4 |
|
Private Placement Warrants Purchase Agreement, dated as of November 20, 2024, between the registrant and DynamixCore Holdings, LLC (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on November 22, 2024) | |
|
10.5 |
|
Private Placement Warrants Purchase Agreement, dated as of November 20, 2025, between the registrant and Cohen & Company Capital Markets and Seaport Global Securities (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on November 22, 2024) | |
|
10.6 |
|
Form of Indemnity Agreement (incorporated by reference to the registrants Registration Statement on Form S-1, filed with the SEC on August 12, 2024) | |
|
10.7 |
|
Promissory Note issued to DynamixCore Holdings, LLC (incorporated by reference to the registrants Registration Statement on Form S-1, filed with the SEC on July 8, 2024) | |
|
10.8 |
|
Securities Subscription Agreement between DynamixCore Holdings, LLC and the Registrant (incorporated by reference to the registrants Registration Statement on Form S-1, filed with the SEC on July 8, 2024) | |
|
10.9 |
|
Administrative Services Agreement, dated November 20, 2024, by and between the Company and Volta Tread LLC (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on November 22, 2024). | |
|
10.10 |
|
Advisory Services Agreement, dated as of February 4, 2025, by and between Registrant and Volta Tread LLC (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on February 7, 2025). | |
|
10.11 |
|
Sponsor Support Agreement dated as of July 21, 2025 by and between registrant, DynamixCore Holdings, LLC, and The Ether Machine, Inc. (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on July 25, 2025) | |
|
10.12 |
|
Form of Lock-Up Agreement (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on July 25, 2025) | |
77
|
10.13 |
|
Form of Equity PIPE Subscription Agreement (Institutional) (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on July 25, 2025) | |
|
10.14 |
|
Form of Equity PIPE Subscription Agreement (Individual) (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on July 25, 2025) | |
|
10.15 |
|
Form of Company Unit Subscription Agreement (Institutional) (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on July 25, 2025) | |
|
10.16 |
|
Form of Company Unit Subscription Agreement (Individual) (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on July 25, 2025) | |
|
10.17 |
|
Form of Company Exchange Unit Subscription Agreement (Institutional) (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on July 25, 2025) | |
|
10.18 |
|
Form of Company Exchange Unit Subscription Agreement (Individual) (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on July 25, 2025) | |
|
10.19 |
|
Form of Amended and Restated Registration Rights Agreement (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on July 25, 2025) | |
|
10.20 |
|
Contribution Agreement, dated as of July 21, 2025 by and among Spyglass Ventures PR, LLC, and The Ether Reserve LLC (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on July 25, 2025) | |
|
10.21 |
|
LLC Subscription Agreement, dated August 29, 2025, by and among SPAC, Pubco, the Company and the Company Unit Investor (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on September 2, 2025) | |
|
10.22 |
|
Stockholders Agreement, dated August 29, 2025, by and among the Seller, Pubco, the Company and the Company Unit Investor (incorporated by reference to the registrants Current Report on Form 8-K, filed with the SEC on September 2, 2025) | |
|
14 |
|
Code of Ethics (inclusive of Insider Trading Policy) (incorporated by reference to Exhibit 14 to the registrants Annual Report on Form 10-K, filed with the SEC on March 20, 2025) | |
|
24 |
|
Power of Attorney (included on signature page of this report) | |
|
31.1* |
|
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
|
31.2* |
|
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
|
32.1* |
|
Certification of the Principal Executive Officer pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
|
32.2* |
|
Certification of the Principal Financial Officer pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
|
97.1 |
|
Clawback Policy (incorporated by reference to Exhibit 97.1 to the registrants Annual Report on Form 10-K, filed with the SEC on March 20, 2025) | |
|
101.INS |
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document | |
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document | |
|
101.LAB |
|
Inline XBRL Taxonomy Extension Labels Linkbase Document | |
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
|
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |
|
* | Filed herewith. |
|
Item 16. Form 10-K
Summary
Not applicable.
78
SIGNATURES
Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
|
DYNAMIX CORPORATION | |
|
|
| |
|
Date:March 6, 2026 |
By: |
/s/ Andrea Bernatova | |
|
|
|
Andrea Bernatova | |
|
|
|
Chief Executive Officer | |
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities
and on the dates indicated.
|
Signature |
|
Title |
|
Date | |
|
|
|
|
|
| |
|
/s/ Andrea Bernatova |
|
Executive Chairman, Chief Executive Officer and Director |
|
March 6, 2026 | |
|
Andrea Bernatova |
|
(Principal Executive Officer) |
|
| |
|
|
|
|
|
| |
|
/s/ Nader Daylami |
|
Chief Financial Officer |
|
March 6, 2026 | |
|
Nader Daylami |
|
(Principal Financial and Accounting Officer) |
|
| |
|
|
|
|
|
| |
|
/s/ Diaco Aviki |
|
Director |
|
March 6, 2026 | |
|
Diaco Aviki |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Tyler Crabtree |
|
Director |
|
March 6, 2026 | |
|
Tyler Crabtree |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Lynn A. Peterson |
|
Director |
|
March 6, 2026 | |
|
Lynn A. Peterson |
|
|
|
| |
79
DYNAMIX CORPORATION
INDEX TO FINANCIAL STATEMENTS
|
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 100) |
|
F-2 | |
|
Consolidated Financial Statements: |
|
| |
|
Consolidated Balance Sheets as of December 31, 2025 and 2024 |
|
F-3 | |
|
Consolidated Statements of Operations for the Year Ended December 31, 2025 and for the Period from June 13, 2024 (Inception) Through December 31, 2024 |
|
F-4 | |
|
Consolidated Statements of Changes in Shareholders Deficit for the Year Ended December 31, 2025 and for the Period from June 13, 2024 (Inception) Through December 31, 2024 |
|
F-5 | |
|
Consolidated Statements of Cash Flows for the Year Ended December 31, 2025 and for the Period from June 13, 2024 (Inception) Through December 31, 2024 |
|
F-6 | |
|
Notes to Consolidated Financial Statements |
|
F-7 to F-22 | |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Dynamix Corporation
*Opinion on the Consolidated Financial Statements*
We have audited the accompanying consolidated balance sheets of Dynamix Corporation (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations, changes in shareholders deficit, and cash flows for the year ended December 31, 2025 and for the period from June 13, 2024 (inception) through December 31, 2024, and the related notes to consolidated financial statements (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the year ended December 31, 2025 and for the period from June 13, 2024 (inception) through December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
*Going Concern*
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, if the Company is unable to raise additional funds to alleviate liquidity needs and complete a business combination by November 22, 2026, then the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
*Basis for Opinion*
These consolidated financial statements are the responsibility of the entitys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as Dynamix Corporations auditor since 2024.
New York, New York
March 6, 2026
PCAOB ID Number 100
F-2
DYNAMIX CORPORATION
CONSOLIDATED BALANCE SHEETS
|
| |
December31, 2025 | | |
December31, 2024 | | |
|
Assets | |
| | |
| | |
|
Current assets | |
| | |
| | |
| Cash | | $ | 223,698 | | | $ | 1,543,566 | | |
| Due from Sponsor | | | 155 | | | | | | |
| Prepaid expenses | | | 72,397 | | | | 1,637 | | |
| Total current assets | | | 296,250 | | | | 1,545,203 | | |
|
| |
| | | |
| | | |
| Long-term prepaid insurance | | | 730 | | | | | | |
| Investments held in Trust Account | | | 173,392,824 | | | | 167,164,825 | | |
| Total Assets | | $ | 173,689,804 | | | $ | 168,710,028 | | |
|
Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders Deficit | |
| | | |
| | | |
|
Current liabilities | |
| | | |
| | | |
| Accounts payable and accrued expenses | | $ | 3,692,951 | | | $ | 207,608 | | |
| Accrued offering costs | | | | | | | 75,000 | | |
| Over-allotment option liability | | | | | | | 64,371 | | |
| Total current liabilities | | | 3,692,951 | | | | 346,979 | | |
| Warrant liability | | | 17,015,000 | | | | 2,158,000 | | |
| Deferred underwriting fee | | | 6,640,000 | | | | 6,640,000 | | |
| Total Liabilities | | | 27,347,951 | | | | 9,144,979 | | |
| Commitments and Contingencies (Note 6) | | | | | | | | | |
| Class A ordinary shares subject to possible redemption, 16,600,000 shares at redemption value of $10.45 and $10.07 per share as of December 31, 2025 and 2024, respectively | | | 173,392,824 | | | | 167,164,825 | | |
|
Shareholders Deficit | |
| | | |
| | | |
| Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding | | | | | | | | | |
| Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued or outstanding (excluding 16,600,000 Class A ordinary shares subject to possible redemption) as of December 31, 2025 and 2024 | | | | | | | | | |
| Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,533,333 and 5,750,000 shares issued and outstanding as of December 31, 2025 and 2024, respectively (1) | | | 553 | | | | 575 | | |
| Additional paid-in capital | | | | | | | | | |
| Accumulated deficit | | | (27,051,524 | ) | | | (7,600,351 | ) | |
| Total Shareholders Deficit | | | (27,050,971 | ) | | | (7,599,776 | ) | |
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders Deficit | | $ | 173,689,804 | | | $ | 168,710,028 | | |
| (1) | December 31, 2024, includes an aggregate of up to 216,667 ClassB ordinary shares subject to forfeiture if the over-allotment option was not exercised in full by the underwriters (Note5). In January 2025, the over-allotment option expired unexercised resulting in 216,667 Class B ordinary shares being forfeited to the Company. | |
The accompanying notes are an integral
part of these consolidated financial statements.
F-3
DYNAMIX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
|
| |
For the
Year Ended December31, 2025 | | |
For the Period from
June13, 2024 (Inception) Through December31, 2024 | | |
| General and administrative expenses | | $ | 5,407,466 | | | $ | 375,613 | | |
| Loss from operations | | | (5,407,466 | ) | | | (375,613 | ) | |
|
| |
| | | |
| | | |
|
Other (expense) income : | |
| | | |
| | | |
| Change in fair value of warrant liabilities | | | (14,857,000 | ) | | | (415,000 | ) | |
| Transaction costs | | | | | | | (116,039 | ) | |
| Interest earned on cash account | | | 33,972 | | | | 8,464 | | |
| Dividends earned on investments held in Trust Account | | | 6,942,927 | | | | 749,825 | | |
| Change in fair value over-allotment liability | | | 64,371 | | | | 12,792 | | |
| Total other (expense) income, net | | | (7,815,730 | ) | | | 240,042 | | |
| Net loss | | $ | (13,223,196 | ) | | $ | (135,571 | ) | |
| Weighted average redeemable Class A ordinary shares outstanding basic and diluted | | | 16,600,000 | | | | 3,220,896 | | |
| Basic and diluted net loss per share, Class A ordinary shares | | $ | (0.60 | ) | | $ | (0.02 | ) | |
| Weighted average non-redeemable Class B ordinary shares outstanding basic (1) | | | 5,536,301 | | | | 4,979,104 | | |
| Basic net loss per share, Class B ordinary shares | | $ | (0.60 | ) | | $ | (0.02 | ) | |
| Weighted average non-redeemable Class B ordinary shares outstanding diluted (1) | | | 5,536,301 | | | | 5,395,688 | | |
| Diluted net loss per share, Class B ordinary shares | | $ | (0.60 | ) | | $ | (0.02 | ) | |
| (1) | December 31, 2024, excluded an aggregate of up to 216,667 ClassB ordinary shares subject to forfeiture if the over-allotment option was not exercised in full by the underwriters (Note5). In January 2025, the over-allotment option expired unexercised resulting in 216,667 Class B ordinary shares being forfeited to the Company. | |
The accompanying notes are an integral
part of these consolidated financial statements.
F-4
DYNAMIX CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 2025 AND
FOR THE PERIOD FROM JUNE 13, 2024 (INCEPTION)
THROUGH DECEMBER 31, 2024
|
| |
ClassA OrdinaryShares | | |
Class B Ordinary Shares | | |
Additional
Paid-in | | |
Accumulated | | |
Total
Shareholders | | |
|
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | | |
| Balance June 13, 2024 (inception) | | | | | | $ | | | | | | | | $ | | | | $ | | | | $ | | | | $ | | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Issuance of Class B ordinary shares (1) | | | | | | | | | | | 5,750,000 | | | | 575 | | | | 24,425 | | | | | | | | 25,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Sale of 5,985,000 Private Placement Warrants | | | | | | | | | | | | | | | | | | | 5,985,000 | | | | | | | | 5,985,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Allocated value of transaction costs to Class A ordinary shares | | | | | | | | | | | | | | | | | | | (22,455 | ) | | | | | | | (22,455 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Accretion of redeemable Class A ordinary shares to redemption amount | | | | | | | | | | | | | | | | | | | (5,986,970 | ) | | | (7,464,780 | ) | | | (13,451,750 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Net loss | | | | | | | | | | | | | | | | | | | | | | | (135,571 | ) | | | (135,571 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Balance December 31, 2024 | | | | | | | | | | | 5,750,000 | | | | 575 | | | | | | | | (7,600,351 | ) | | | (7,599,776 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Accretion of redeemable Class A ordinary shares to redemption amount | | | | | | | | | | | | | | | | | | | | | | | (6,227,999 | ) | | | (6,227,999 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Forfeiture of Founder Shares | | | | | | | | | | | (216,667 | ) | | | (22 | ) | | | | | | | 22 | | | | | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Net loss | | | | | | | | | | | | | | | | | | | | | | | (13,223,196 | ) | | | (13,223,196 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Balance December 31, 2025 | | | | | | $ | | | | | 5,533,333 | | | $ | 553 | | | $ | | | | $ | (27,051,524 | ) | | $ | (27,050,971 | ) | |
| (1) | December 31, 2024, includes an aggregate of up to 216,667 ClassB ordinary shares subject to forfeiture if the over-allotment option was not exercised in full by the underwriters (Note5). In January 2025, the over-allotment option expired unexercised resulting in 216,667 Class B ordinary shares being forfeited to the Company. | |
The accompanying notes are an integral
part of these consolidated financial statements.
F-5
DYNAMIX CORPORATION
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
| |
For the
Year Ended December31, 2025 | | |
For the Period from
June13, 2024 (Inception) Through December31, 2024 | | |
|
Cash Flows from Operating Activities: | |
| | |
| | |
| Net loss | | $ | (13,223,196 | ) | | $ | (135,571 | ) | |
|
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | | |
| Formation costs paid by Sponsor in exchange for issuance of Class B ordinary shares | | | | | | | 16,241 | | |
| Operating costs paid through promissory note related party | | | | | | | 15,420 | | |
| Change in fair value of warrant liabilities | | | 14,857,000 | | | | 415,000 | | |
| Transaction costs | | | | | | | 116,039 | | |
| Change in fair value of over-allotment liability | | | (64,371 | ) | | | (12,792 | ) | |
| Dividends earned on investments held in Trust Account | | | (6,942,927 | ) | | | (749,825 | ) | |
|
Changes in operating assets and liabilities: | |
| | | |
| | | |
| Prepaid expenses | | | (71,490 | ) | | | (1,637 | ) | |
| Due from Sponsor | | | (155 | ) | | | | | |
| Accounts payable and accrued liabilities | | | 3,410,343 | | | | 204,305 | | |
| Net cash used in operating activities | | | (2,034,796 | ) | | | (132,820 | ) | |
|
| |
| | | |
| | | |
|
Cash Flows from Investing Activities: | |
| | | |
| | | |
| Investment of cash in Trust Account | | | | | | | (166,415,000 | ) | |
| Net cash used in investing activities | | | | | | | (166,415,000 | ) | |
|
| |
| | | |
| | | |
|
Cash Flows from Financing Activities: | |
| | | |
| | | |
| Cash withdrawn from Trust Account for working capital | | | 714,928 | | | | | | |
| Proceeds from sale of Units, net of underwriting discounts paid | | | | | | | 162,680,000 | | |
| Proceeds from sale of Private Placement Warrants | | | | | | | 5,985,000 | | |
| Repayment of promissory note - related party | | | | | | | (105,274 | ) | |
| Payments of offering costs | | | | | | | (468,340 | ) | |
| Net cash provided by financing activities | | | 714,928 | | | | 168,091,386 | | |
|
| |
| | | |
| | | |
| Net Change in Cash | | | (1,319,868 | ) | | | 1,543,566 | | |
| Cash Beginning of period | | | 1,543,566 | | | | | | |
| Cash End of period | | $ | 223,698 | | | $ | 1,543,566 | | |
|
Non-Cash investing and financing activities: | |
| | | |
| | | |
| Forfeiture of Founder Shares | | $ | 22 | | | $ | | | |
| Issuance of Founder Shares | | $ | | | | $ | 25,000 | | |
| Offering costs included in accrued offering costs | | $ | | | | $ | 78,303 | | |
| Offering costs paid by promissory note | | $ | | | | $ | 89,854 | | |
| Offering costs paid via prepaid expense | | $ | | | | $ | 8,759 | | |
| Offering costs charged to additional paid in capital | | $ | | | | $ | 638,427 | | |
| Over-allotment liability at IPO date | | $ | | | | $ | 77,163 | | |
| Deferred underwriting fee payable | | $ | | | | $ | 6,567,193 | | |
| Initial classification of warrant liability - public | | $ | | | | $ | 1,743,000 | | |
The accompanying notes are an integral
part of these consolidated financial statements.
F-6
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 1DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS, AND GOING CONCERN
Dynamix Corporation (the Company) is a blank check company incorporated as a Cayman Islands exempted company on June13, 2024. The Company was incorporated for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the Business Combination).
As of December 31, 2025, the Company had not commenced any operations. All activity for the period from June13, 2024 (inception) through December 31, 2025 relates to the Companys formation, the initial public offering (the Initial Public Offering), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination and completing the proposed Business Combination (see Note 6). The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering.
The registration statement for the Companys Initial Public Offering was declared effective on November 20, 2024. On November 22, 2024, the Company consummated the Initial Public Offering of 16,600,000 units (the Units), which includes the partial exercise by the underwriters of their over-allotment option in the amount of 1,600,000 Units (Note 6), at $10.00 per Unit, generating gross proceeds of $166,000,000, which is discussed in Note 3. Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant (the Public Warrant). In January 2025, the underwriters remaining over-allotment option expired unexercised and as a result, 216,667 Class B ordinary shares were forfeited to the Company.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 5,985,000 warrants (the Private Placement Warrants) at a price of $1.00 per Private Placement Warrant, in a private placement to DynamixCore Holdings, LLC, the Companys sponsor (the Sponsor), and Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC (referred to as CCM) and Seaport Global Securities LLC, the representatives of the underwriters of the Initial Public Offering, generating gross proceeds of $5,985,000, which is described in Note 4. Transaction costs amounted to $10,605,256, consisting of $3,320,000 of cash underwriting fee, $6,640,000 of deferred underwriting fee, and $645,256 of other offering costs.
Of those 5,985,000 Private Placement Warrants, the Sponsor purchased 3,910,000 Private Placement Warrants and the underwriters purchased 2,075,000 Private Placement Warrants.
On December 9, 2024, the Companys Class A ordinary shares and warrants began separately trading from the Units. Those Units not separated traded on the Nasdaq Global Market under the symbol DYNXU, and each of the Class A ordinary shares and warrants that are separated will trade on the Nasdaq Global Market under symbols DYNX and DYNXW, respectively. On August 27, 2025, the Companys ticker symbols changed for its Class A ordinary shares, Units and public warrants from DYNX, DYNXU and DYNXW, to ETHM, ETHMU and ETHMW, respectively.
The Companys Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the net balance in the Trust Account (as defined below) (excluding the amount of deferred underwriting fee held and taxes payable, if any, on the income earned on the Trust Account) at the time of the signing of an agreement to enter into a Business Combination. However, the Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Actof1940, as amended (the Investment Company Act). There is no assurance that the Company will be able to successfully effect a Business Combination.
F-7
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
Following the closing of the Initial Public Offering, on November 22, 2024, an amount of $166,415,000 ($10.025 per Unit) from the net proceeds of the sale of the Units and the sale of the Private Placement Warrants was placed in the trust account (the Trust Account), located in the United States, with Odyssey Transfer and Trust Company acting as trustee, and the funds will be held in cash, including in demand deposit accounts at a bank, or invested only in U.S. government treasury obligations with a maturity of 185days or less or in money market funds meeting certain conditions under Rule2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations; the holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended Business Combination. To mitigate the risk that the Company might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that it holds investments in the Trust Account, the Company may, at any time (based on the management teams ongoing assessment of all factors related to the potential status under the Investment Company Act), instruct the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest bearing demand deposit account at a bank. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company for permitted withdrawals (means amounts withdrawn from interest earned on the Trust Account and not from the principal held in the Trust Account) to fund working capital requirements, subject to an annual limit of 10% of interest earned on funds held in the Trust Account), or for taxes payable and up to $100,000 of interest to pay dissolution expenses, if any, the proceeds from the Initial Public Offering and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (i)the completion of the Companys initial Business Combination, (ii)the redemption of the Companys public shares if the Company is unable to complete the initial Business Combination within 24months from the closing of the Initial Public Offering or by such earlier liquidation date as the board of directors may approve (the Completion Window), subject to applicable law, or (iii)the redemption of the Companys public shares properly submitted in connection with a shareholder vote to amend the Companys amended and restated memorandum and articles of association to (A)modify the substance or timing of the Companys obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Companys public shares if the Company has not consummated an initial Business Combination within the Completion Window or (B)with respect to any other material provisions relating to shareholders rights or pre-initial Business Combination activity. The proceeds deposited in the Trust Account could become subject to the claims of the Companys creditors, if any, which could have priority over the claims of the Companys public shareholders.
The Company will provide the Companys public shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or against, the Companys initial Business Combination, all or a portion of their public shares upon the completion of the initial Business Combination either (i)in connection with a general meeting called to approve the initial Business Combination or (ii)without a shareholder vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed initial Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of twobusiness days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable, if any) and not previously released to the Company, divided by the number of then outstanding public shares, subject to the limitations. The amount in the Trust Account was initially invested at $10.025 per public share.
The ordinary shares subject to possible redemption were recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic480, Distinguishing Liabilities from Equity. If the Company seeks shareholder approval of the Business Combination, a majority of the issued and outstanding shares voted must be voted in favor of the Business Combination.
The Company will have only the duration of the Completion Window to complete the initial Business Combination. However, if the Company is unable to complete its initial Business Combination within the Completion Window, the Company will (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than tenbusiness days thereafter (and subject to lawfully available funds therefor), 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 (net of permitted withdrawals and less up to $100,000 of interest to pay dissolution expenses), 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 the remaining shareholders and the board of directors, liquidate and dissolve, subject in each case to obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
F-8
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Sponsor, officers and directors entered into a letter agreement with the Company, pursuant to which they agreed to (i)waive their redemption rights with respect to their Founder Shares and public shares in connection with the completion of the initial Business Combination; (ii)waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Companys amended and restated memorandum and articles of association (A)to modify the substance or timing of the Companys obligation to allow redemption in connection with the initial business combination or to redeem 100% of the public shares if the Company has not consummated an initial Business Combination within the Completion Window or (B)with respect to any other material provisions relating to shareholders rights or pre-initial Business Combination activity; (iii)waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the initial Business Combination within the Completion Window, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within the Completion Window and to liquidating distributions from assets outside the Trust Account; and (iv)vote any Founder Shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions) in favor of the initial Business Combination.
The Companys Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i)$10.025 per public share and (ii)the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.025 per share due to reductions in the value of the trust assets, less taxes payable, if any, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Companys indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Actof1933, as amended (the Securities Act). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsors only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations.
Risks and Uncertainties
The continuing military conflict between the Russian Federation and Ukraine, the military actions between Hamas and Israel and the risk of escalations of other military conflicts have created and are expected to create global economic consequences. The specific impact on the Companys financial condition, results of operations, cash flows and completion of a Business Combination is not determinable as of the date of these financial statements.
Going Concern Considerations
As of December 31, 2025, the Company had $223,698 in its operating bank account and a working capital deficit of $3,396,701.
Prior to the completion of the Initial Public Offering the Companys liquidity needs had been satisfied through a loan under an unsecured promissory note with the Sponsor and the issuance of 5,750,000 Class B ordinary shares (Founder Shares) at approximately $0.004 per share for gross proceeds of $25,000. On November 22, 2024, the Company repaid the total outstanding balance of the note amounting to $105,274. Subsequent to the consummation of the Initial Public Offering the Companys liquidity needs have been satisfied through the issuance of the Private Placement Warrants which generated gross proceeds of $5,985,000. Additionally, creditors have agreed to defer approximately $1.0 million in fees until the company completes its initial Business Combination.
In connection with our assessment of going concern considerations in accordance with ASC 205-40 Presentation of Financial Statements - Going Concern, the Company has incurred and expects to continue to incur significant costs in pursuit of financing and acquisition plans. Additionally, the Company has 24 months from the closing of the Initial Public Offering (November 22, 2026 or until such earlier liquidation date as our board of directors may approve) to complete a Business Combination (the Combination Period). The working capital deficit and the expectation of significant future costs raises substantial doubt about the Companys ability to continue as a going concern within one year after the date that the financial statements are issued. Additionally, management has determined that the mandatory liquidation and subsequent dissolution, should the Company be unable to complete a Business Combination by the end of the Combination Period, raises substantial doubt about the Companys ability to continue as a going concern. Management plans to address this uncertainty through debt or equity financing and the completion of its proposed Business Combination (see Note 6). There is no assurance that the Companys plans to raise capital or to consummate a Business Combination will be successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
F-9
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
**
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the SEC).
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Ethos Sub 1, Inc., Ethos Sub 2, Inc., and Ethos Sub 3, Inc. All intercompany transactions have been eliminated.
Emerging Growth Company Status
The Company is an emerging growth company, as defined in Section2(a)of the Securities Act, as modified by the Jumpstart Our Business Startups Actof2012, (the JOBS Act), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section102(b)(1)of 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 Securities Act registration statement declared effective or do not have a class of securities registered under the ExchangeAct) 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. The Company has 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, the Company, as an emerging growth company, is not required to adopt the new or revised standard at the time public companies adopt the new or revised standard. This may make comparison of the Companys financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Companys management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $223,698 and $1,543,566 in cash as of December 31, 2025 and 2024, respectively, andnocash equivalents as of December 31, 2025 and 2024, respectively.
Investments Held in Trust Account
At December 31, 2025 and 2024, substantially all of the assets held in the Trust Account were held in mutual funds which are invested primarily in money market funds. All of the Companys investments held in the Trust Account are classified as trading securities. Trading securities are presented on the consolidated balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in the Trust Account are included in dividends earned on investments held in Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets. As of December 31, 2025 and 2024, the Company reported $173,392,824 and $167,164,825 in investments held in the Trust Account, respectively.
The Company may withdraw up to 10% of the earnings in the Trust Account for working capital purposes. For the year ended December 31, 2025 and for the period from June 13, 2024 (inception) through December 31, 2024, the Company withdrew $714,928 and $0, respectively, from the Trust Account for working capital purposes.
F-10
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Companys financial condition, results of operations, and cash flows.
Offering Costs
The Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, Expenses of Offering. Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC 470-20, Debt with Conversion and Other Options, addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between Class A ordinary shares and warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the warrants and then to the Class A ordinary shares. Offering costs allocated to the Class A ordinary shares were charged to temporary equity, offering costs allocated to the Public Warrants were charged to the consolidated statements of operations, while offering costs allocated to the Private Placement Warrants were charged to shareholders deficit as the Public Warrants and Private Placement Warrants after managements evaluation were accounted for under liability and equity treatment, respectively.
Fair Value of Financial Instruments
The fair value of the Companys assets and liabilities, which qualify as financial instruments under FASB ASC820, Fair Value Measurements and Disclosures, approximates the carrying amounts represented in the consolidated balance sheets, primarily due to its short-term nature, except for the warrant liabilities (see Note 8).
Income Taxes
The Company accounts for income taxes under ASC Topic740, Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statements and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Companys management determined that the Cayman Islands is the Companys major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2025 and 2024, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the UnitedStates. As such, the Companys tax provision was zero for the periods presented.
F-11
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic815, Derivatives and Hedging. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the consolidated balance sheets as current or non-current based on whether or not net cash settlement or conversion of the instrument could be required within 12months of the consolidated balance sheet date. The underwriters over-allotment option is deemed to be a freestanding financial instrument indexed on the contingently redeemable shares and were accounted for as a liability pursuant to ASC480 since the underwriters partially exercised their overallotment option at the closing of Initial Public Offering.
Warrant Instruments
The Company accounted for the Public and Private Placement Warrants issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in FASB ASC Topic815, Derivatives and Hedging. Accordingly, the Company evaluated and classified the Public Warrants under liability treatment and the Private Placement Warrants under equity treatment at their assigned values.
Class A Ordinary Shares Subject to Possible Redemption
The public shares contain a redemption feature which allows for the redemption of such public shares in connection with the Companys liquidation, or if there is a shareholder vote or tender offer in connection with the Companys initial Business Combination. In accordance with ASC 480-10-S99, the Company classifies public shares subject to possible redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately as it occurs and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit. Accordingly, at December 31, 2025 and 2024, Class A ordinary shares subject to possible redemption is presented at redemption value as temporary equity, outside of the shareholders deficit section of the Companys consolidated balance sheets. At December 31, 2025 and 2024, the Class A ordinary shares subject to possible redemption reflected in the consolidated balance sheets are reconciled in the following table:
| | | Shares | | | Amount | | |
| Gross proceeds | | | 16,600,000 | | | $ | 166,000,000 | | |
| Less: | | | | | | | | | |
| Proceeds allocated to Public Warrants | | | | | | | (1,743,000 | ) | |
| Proceeds allocated to over-allotment option | | | | | | | (77,163 | ) | |
| ClassA ordinary shares issuance costs | | | | | | | (10,466,762 | ) | |
| Plus: | | | | | | | | | |
| Remeasurement of carrying value to redemption value | | | | | | | 13,451,750 | | |
| ClassA Ordinary Shares subject to possible redemption, December 31, 2024 | | | 16,600,000 | | | | 167,164,825 | | |
| Plus: | | | | | | | | | |
| Accretion of redeemable Class A ordinary shares to redemption amount | | | | | | | 6,227,999 | | |
| ClassA Ordinary Shares subject to possible redemption, December 31, 2025 | | | 16,600,000 | | | $ | 173,392,824 | | |
Share-Based Compensation
The Company records share-based compensation in accordance with FASB ASC Topic 718, Compensation-Share Compensation (ASC 718), guidance to account for its share-based compensation. It defines a fair value-based method of accounting for an employee share option or similar equity instrument. The Company recognizes all forms of share-based payments at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. The compensation expense to be recorded will be the difference between the fair value of the Class B ordinary shares sold to each of the purchasers and the cash consideration exchange as a result of the assignment or transfer. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Share-based compensation expenses will be included in costs and operating expenses depending on the nature of the services provided in the consolidated statements of operations. Subsequent measurement of fair value of the share-based payment award is not required for share-based payment awards meeting the conditions for equity classification.
F-12
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
*Net Loss Per Ordinary Share*
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. The Company has two classes of ordinary shares, which are referred to as redeemable Class A ordinary shares and non-redeemable Class B ordinary shares. Income and losses are shared pro rata between the two classes of ordinary shares. This presentation assumes a Business Combination as the most likely outcome. Net loss per ordinary share is calculated by dividing the net loss by the weighted average ordinary shares outstanding for the respective period. For the period from June 13, 2024 (inception) through December 31, 2024, weighted average shares were reduced for the effect of an aggregate of 216,667 ordinary shares that would have been subject to forfeiture had the over-allotment option not been exercised by the underwriters (see Note 7).
The following tables present a reconciliation of the numerator and denominator used to compute basic and diluted net loss per ordinary share for each class of ordinary shares:
| | | FortheYearEnded December 31,2025 | | | For the Period from June 13, 2024 (Inception) Through December 31, 2024 | | |
| | | ClassA | | | ClassB | | | ClassA | | | ClassB | | |
| Basic net loss per ordinary share | | | | | | | | | | | | | |
| Numerator: | | | | | | | | | | | | | |
| Allocation of net loss, as adjusted | | $ | (9,916,067 | ) | | $ | (3,307,129 | ) | | $ | (53,251 | ) | | $ | (82,320 | ) | |
| | | | | | | | | | | | | | | | | | |
| Denominator: | | | | | | | | | | | | | | | | | |
| Basic weighted average ordinary shares outstanding | | | 16,600,000 | | | | 5,536,301 | | | | 3,220,896 | | | | 4,979,104 | | |
| Basic net loss per ordinary share | | $ | (0.60 | ) | | $ | (0.60 | ) | | $ | (0.02 | ) | | $ | (0.02 | ) | |
| | | FortheYearEnded December 31,2025 | | | For the Period from June 13, 2024 (Inception) Through December 31, 2024 | | |
| | | ClassA | | | ClassB | | | ClassA | | | ClassB | | |
| Diluted net loss per ordinary share | | | | | | | | | | | | | |
| Numerator: | | | | | | | | | | | | | |
| Allocation of net loss, as adjusted | | $ | (9,916,067 | ) | | $ | (3,307,129 | ) | | $ | (50,677 | ) | | $ | (84,894 | ) | |
| | | | | | | | | | | | | | | | | | |
| Denominator: | | | | | | | | | | | | | | | | | |
| Diluted weighted average ordinary shares outstanding | | | 16,600,000 | | | | 5,536,301 | | | | 3,220,896 | | | | 5,395,688 | | |
| Diluted net loss per ordinary share | | $ | (0.60 | ) | | $ | (0.60 | ) | | $ | (0.02 | ) | | $ | (0.02 | ) | |
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Companys consolidated financial statements.
F-13
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 3 INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, on November 22, 2024, the Company sold 16,600,000Units at a purchase price of $10.00 per Unit, which includes the partial exercise by the underwriters of their over-allotment option in the amount of 1,600,000 Units. Each Unit consists of one ClassA ordinary share and one-half of one redeemable warrant. Each whole warrant entitles the holder to purchase one ClassA ordinary share at a price of $11.50 per share, subject to adjustment. Each warrant will become exercisable 30days after the completion of the initial Business Combination and will expire fiveyears after the completion of the initial Business Combination, or earlier upon redemption or liquidation.
In connection with the completion of the Business Combination, each holder of Public Warrants will have the right to require the Sponsor to repurchase or cause one of its affiliates to repurchase, at $0.65 per Public Warrant (exclusive of commissions), the outstanding Public Warrants held by such holder (the Warrant Put Right). If the Company is unable to complete its Business Combination, there will be no requirement for the Sponsor to repurchase, or to cause one of its affiliates to repurchase, the Public Warrants. Also, the Company cannot assure the Sponsor or the Company will have sufficient funds to repurchase Public Warrants pursuant to the holders exercise of the Warrant Put Rights.
WarrantsAs of December 31, 2025 and 2024, there were 14,285,000 warrants outstanding, including 8,300,000 Public Warrants and 5,985,000 Private Placement Warrants.
The Company will not be obligated to deliver any ClassA ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the ClassA ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, or a valid exemption from registration is available. No warrant will be exercisable and the Company will not be obligated to issue a ClassA ordinary share upon exercise of a warrant unless the ClassA ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, or a valid exemption from registration is not available, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the ClassA ordinary share underlying such unit.
Under the terms of the warrant agreement, the Company has agreed that, as soon as practicable, but in no event later than 20business days, after the closing of its Business Combination, it will use commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement for the Initial Public Offering or a new registration statement covering the registration under the Securities Actofthe ClassA ordinary shares issuable upon exercise of the warrants and thereafter will use its commercially reasonable efforts to cause the same to become effective within 60business days following the Companys initial Business Combination and to maintain a current prospectus relating to the ClassA ordinary shares issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the ClassA ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (60th) businessday after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with Section3(a)(9)of the Securities Act or another exemption. Notwithstanding the above, if the ClassA ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a covered security under Section18(b)(1)of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a cashless basis in accordance with Section3(a)(9)of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
F-14
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
If the holders exercise their Public Warrants on a cashless basis, they would pay the warrant exercise price by surrendering the warrants for that number of ClassA ordinary shares equal to the quotient obtained by dividing (x)the product of the number of ClassA ordinary shares underlying the warrants, multiplied by the excess of the fair market value of the ClassA ordinary shares over the exercise price of the warrants by (y)the fair market value. The fair market value is the average reported closing price of the ClassA ordinary shares for the 10trading days ending on the thirdtrading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable.
**
Redemption of Warrants When the Price per ClassA Ordinary Share Equals or Exceeds $18.00:
The Company may redeem the outstanding warrants:
| | in whole and not in part; | |
| | at a price of $0.01 per warrant; | |
| | upon a minimum of 30days prior written notice of redemption (the 30-day redemption period); and | |
| | if, and only if, the closing price of the ClassA ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20trading days within a 30-tradingday period commencing at least 30days after completion of the initial business combination and ending threebusiness days before the Company sends the notice of redemption to the warrant holders. | |
Additionally, if the number of outstanding ClassA ordinary shares is increased by a share capitalization payable in ClassA ordinary shares, or by a subdivision of ordinary shares or other similar event, then, on the effective date of such share capitalization, subdivision or similar event, the number of ClassA ordinary shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding ordinary shares. A rights offering made to all or substantially all holders of ordinary shares entitling holders to purchase ClassA ordinary shares at a price less than the fair market value will be deemed a share capitalization of a number of ClassA ordinary shares equal to the product of (i)the number of ClassA ordinary shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for ClassA ordinary shares) and (ii)the quotient of (x)the price per ClassA ordinary share paid in such rights offering and (y)the fair market value. For these purposes (i)if the rights offering is for securities convertible into or exercisable for ClassA ordinary shares, in determining the price payable for ClassA ordinary shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion, and (ii)fair market value means the volume weighted average price of ClassA ordinary shares as reported during the ten (10)trading day period ending on thetrading day prior to the first date on which the ClassA ordinary shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
NOTE 4 PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Sponsor and the underwriters purchased an aggregate of 5,985,000warrants, at a price of $1.00 per warrant, or $5,985,000 in the aggregate, in a private placement. Of those 5,985,000 Private Placement Warrants, the Sponsor purchased 3,910,000 Private Placement Warrants and the underwriters purchased 2,075,000 Private Placement Warrants. Each whole warrant entitles the registered holder to purchase one ClassA ordinary share at a price of $11.50 per share, subject to adjustment.
The Private Placement Warrants are identical to the Public Warrants sold in the Initial Public Offering except that the Private Placement Warrants do not include the Warrant Put Right (as mentioned above), and, so long as they are held by the Sponsor, the underwriters, or their permitted transferees, the Private Placement Warrants (i)may not (including the ClassA ordinary shares issuable upon exercise of these Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30days after the completion of the initial Business Combination, (ii)will be entitled to registration rights and (iii)with respect to Private Placement Warrants held by the underwriters and/or its designees, will not be exercisable more than fiveyears from the commencement of sales in this offering in accordance with Financial Industry Regulatory Authority (FINRA) Rule5110(g)(8).
NOTE 5 RELATED PARTY TRANSACTIONS
Founder Shares
On June18, 2024, the Sponsor made a capital contribution of $25,000, or approximately $0.004 per share, to cover certain of the Companys expenses, for which the Company issued 5,750,000 Founder Shares to the Sponsor. The Founder Shares include an aggregate of up to 750,000 shares subject to forfeiture to the extent that the remainder of the underwriters over-allotment option is not exercised, so that the number of Founder Shares will represent 25.0% of the Companys issued and outstanding shares after the Initial Public Offering. Upon the Initial Public Offering, the underwriters partially exercised their over-allotment option and in January 2025, the remaining over-allotment option expired, resulting in the Sponsor forfeiting 216,667 Founder Shares.
F-15
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
On September 8, 2024, the Sponsor transferred 25,000 Class A Units representing 25,000 Founder Shares to each of the Companys three director nominees, for an aggregate of 75,000 Class A Units representing 75,000 Founder Shares, at a price of $0.004 per Unit/share, or an aggregate purchase price of $300. The deemed transfer of Founder Shares to the three director nominees was granted only at the closing of the Companys Initial Public Offering. In addition, On October 14, 2024, the Sponsor transferred 25,000 Class A Units representing 25,000 Founder Shares to the Companys vice president at a price of $0.004 per share, or an aggregate purchase price of $100. The deemed sale of the Founder Shares to the Companys vice president and to each of the three director nominees is in the scope of ASC 718. Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 25,000 Founder Shares deemed transferred to the Companys vice president on October 14, 2024 is $32,250 or $1.29 per share.
The Founder Shares deemed transferred to the vice president were granted subject to a service condition (i.e., being part of the Company within one year from the grant date, October 14, 2024). Stock-based compensation will be recognized ratably from the grant date in four equal quarterly installments through the first anniversary in an amount equal to the number of Founder Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the deemed purchase of the Founder Shares. The fair value of the 75,000 shares deemed granted to the Companys three director nominees was $96,750 or $1.29 per share. The Founder Shares deemed transferred to the Companys three director nominees were granted subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. As of December 31, 2025 and 2024, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized. Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of Founder Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the deemed purchase of the Founder Shares.
The Companys initial shareholders have agreed not to transfer, assign or sell any of their Founder Shares and any ClassA ordinary shares issued upon conversion thereof until the earlier to occur of (i)one year after the completion of the initial Business Combination or (ii)the date on which the Company completes a liquidation, merger, share exchange or other similar transaction after the initial Business Combination that results in all of the Companys shareholders having the right to exchange their ClassA ordinary shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the Companys initial shareholders with respect to any Founder Shares (the Lock-up). Notwithstanding the foregoing, if (1)the closing price of the ClassA ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20trading days within any 30-tradingday period commencing at least 150days after the initial Business Combination or (2)if the Company consummates a transaction after the initial Business Combination which results in the Companys shareholders having the right to exchange their shares for cash, securities or other property, the Founder Shares will be released from the Lock-up.
Promissory NoteRelated Party
The Sponsor agreed to loan the Company an aggregate of up to $300,000 to be used for a portion of the expenses of the Initial Public Offering. The loan was non-interest bearing, unsecured and due at the earlier of December31, 2024 or the closing of the Initial Public Offering. On November 22, 2024, the Company repaid the total outstanding balance of the note amounting to $105,274. Borrowings under the note are no longer available.
Administrative Services Agreement
The Company entered into an agreement with an affiliate of the Sponsor, commencing on November 21, 2024 through the earlier of the Companys consummation of a Business Combination or its liquidation, to pay an aggregate of $30,000 per month for office space, utilities, and secretarial and administrative support services. For the year ended December 31, 2025 and for the period from June 13, 2024 (inception) through December 31, 2024, the Company incurred $360,000 and $32,000, respectively, of administrative services fees reported in general and administrative expenses on the consolidated statements of operations. At December 31, 2025 and 2024, the Company owed $40,000 and $32,000, respectively, and reported these amounts in accounts payable and accrued expenses in the accompanying consolidated balance sheets.
Advisory Services Agreement
On February 4, 2025, the Company entered into an advisory services agreement with an affiliate of the Sponsor. Pursuant to the advisory services agreement, the service provider will provide management, consulting and other advisory services to the Company in connection with its initial Business Combination. In consideration for these services, the Company will pay the service provider an annual fee, payable on a monthly basis, until the consummation of a Business Combination. The Company will also reimburse the service provider and its affiliates for certain costs and expenses incurred in favor of third parties. Such annual fee, together with any reimbursement, shall not exceed 10% of the interest earned on funds held in the Trust Account.
For the year ended December 31, 2025 and 2024, the Company has paid the service provider $660,704 and $0, respectively, pursuant to the advisory services agreement.
F-16
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
Working Capital Loans
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Companys officers and directors may, but are not obligated to, loan the Company funds as may be required (the Working Capital Loans). If the Company completes a Business Combination, the Company would repay the Working Capital Loans. In the event that a Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into private placement warrants of the post Business Combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. As of December 31, 2025 and 2024, no such Working Capital Loans were outstanding.
NOTE 6COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
The UnitedStates and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the recent escalation of the Israel-Hamas conflict. In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization (NATO) deployed additional military forces to eastern Europe, and the UnitedStates, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system. Certain countries, including the UnitedStates, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel, increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia and the escalation of the Israel-Hamas conflict and the resulting measures that have been taken, and could be taken in the future, by NATO, the UnitedStates, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyberattacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.
Any of the above-mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine, the escalation of the Israel-Hamas conflict and subsequent sanctions or related actions, could adversely affect the Companys search for an initial Business Combination and any target business with which the Company may ultimately consummate an initial Business Combination.
Registration Rights
The holders of the (i)Founder Shares, which were issued in a private placement prior to the closing of the Initial Public Offering, (ii)Private Placement Warrants which were issued in a private placement simultaneously with the closing of the Initial Public Offering and the ClassA ordinary shares underlying such Private Placement Warrants and (iii)Private Placement Warrants that may be issued upon conversion of working capital loans have registration rights to require the Company to register a sale of any of its securities held and any other securities of the Company acquired by them prior to the consummation of the initial Business Combination pursuant to a registration rights agreement signed on the effective date of the Initial Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain piggyback registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters had a 45-day option from the date of the Initial Public Offering to purchase up to an additional 2,250,000Units to cover over-allotments. On November 22, 2024, simultaneously with the closing of the Initial Public Offering, the underwriters partially exercised the over-allotment option to purchase an additional 1,600,000 Units. In January 2025, the underwriters remaining over-allotment option expired unused.
The underwriters were entitled to a cash underwriting discount of $0.20 per Unit, or $3,320,000 in the aggregate, which was paid upon the closing of the Initial Public Offering. In addition, $0.40 per Unit sold in the Initial Public Offering, or $6,640,000 in the aggregate, is payable to the underwriters for deferred underwriting fee. The deferred underwriting fee will become payable to the underwriters, upon the completion of the Companys initial Business Combination, from the amounts held in the Trust Account solely on amounts remaining in the Trust Account following all properly submitted shareholder redemptions in connection with the consummation of the initial Business Combination.
F-17
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
Advisory Services Agreement
On February 4, 2025, the Company entered into an advisory services agreement (the advisory services agreement) with Volta (the service provider), an affiliate of the Sponsor owned and controlled by our chief executive officer and chief financial officer. Pursuant to the advisory services agreement, the service provider will provide management, consulting and other advisory services to the Company in connection with its initial Business Combination. In consideration for these services, the Company will pay the service provider an annual fee, payable on a monthly basis, until the consummation of a Business Combination. The Company will also reimburse the service provider and its affiliates for certain costs and expenses incurred in favor of third parties. Such annual fee, together with any reimbursement, shall not exceed 10% of the interest earned on funds held in the Trust Account. For the year ended December 31, 2025 and 2024, the Company has paid the service provider $660,704 and $0, respectively, pursuant to the advisory services agreement.
Letter Agreement
On July 20, 2025, the Company entered into a letter agreement pursuant to which the underwriters from the Companys Initial Public Offering agreed, if the closing of the Business Combination Agreement occurs, (a) that the only consideration due and payable by the Company and its affiliates to the underwriters pursuant to the underwriting agreement for the Initial Public Offering shall be a one-time cash fee equal to $500,000 (the Cash Fee) payable upon the closing of the Business Combination, (b) to waive any rights to any additional consideration under the underwriting agreement for the Initial Public Offering other than the cash fee, including deferred underwriting commission, and (c) to forfeit 2,070,000 private placement warrants immediately prior to the closing of the Business Combination and retain 5,000 private placement warrants (which will become warrants to purchase the same number of shares of Pubco Class A Stock at the closing of the Business Combination).
Business Combination Agreement
On July 21, 2025, the Company and The Ether Machine, Inc., a Delaware corporation (Pubco), entered into a Business Combination Agreement (the Business Combination Agreement) with ETH SPAC Merger Sub Ltd., a Cayman Islands exempted company and wholly-owned subsidiary of Pubco (SPAC Merger Sub), The Ether Reserve LLC, a Delaware limited liability company (the Ether Reserve), Ethos Sub 1, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (SPAC Subsidiary A), Ethos Sub 2, Inc., a Delaware corporation and wholly-owned subsidiary of SPAC Subsidiary A (SPAC Subsidiary B), Ethos Sub 3, Inc., a Delaware corporation and wholly-owned subsidiary of SPAC Subsidiary B (Company Merger Sub), and ETH Partners LLC, a Delaware limited liability company (the Seller).
For additional information regarding the Business Combination Agreement and the transactions contemplated therein, see the Current Report on Form 8-K as filed with the SEC by the Company on July 25, 2025.
Concurrently with the execution of the Business Combination Agreement, Pubco, the Ether Reserve and the Company entered into (i) subscription agreements (collectively, the Equity PIPE Subscription Agreements) with certain investors (the Equity PIPE Investors), pursuant to which the Equity PIPE Investors agreed to purchase, and Pubco agreed to issue and sell, on the Closing Date (as defined in the Business Combination Agreement), shares of Pubco Class A Stock (the Equity PIPE Shares) for $197,100,000 in cash and a contribution of 67,121 Ether, in a private placement (the Equity PIPE), (ii) subscription agreements with certain investors, pursuant to which such investors agreed to purchase, and Ether Reserve agreed to issue and sell Ether Reserve Class A Units (the Subscribed Units) for $97,000,000 in cash and a contribution of 35,615.11 Ether, in a private placement, upon the terms and subject to the conditions set forth therein and (iii) subscription agreements with certain investors, pursuant to which such investors agreed to purchase, and Ether Reserve agreed to issue and sell, on the Closing Date, Ether Reserves exchange units for a contribution of 47,103 Ether, in a private placement, upon the terms and subject to the conditions set forth therein.
NOTE 7SHAREHOLDERS DEFICIT
Preference SharesThe Company is authorized to issue a total of 5,000,000 preference shares at par value of $0.0001 each. As of December 31, 2025 and 2024, there were no preference shares issued or outstanding.
ClassA Ordinary SharesThe Company is authorized to issue a total of 500,000,000 ClassA ordinary shares at par value of $0.0001 each. As of December 31, 2025 and 2024, there were no ClassA ordinary shares issued or outstanding, excluding 16,600,000 shares subject to possible redemption.
ClassB Ordinary SharesThe Company is authorized to issue a total of 50,000,000 ClassB ordinary shares at par value of $0.0001 each. On June18, 2024, the Company issued 5,750,000 ClassB ordinary shares to the Sponsor for $25,000, or approximately $0.004 per share. The issued shares included an aggregate of up to 750,000 shares subject to forfeiture to the extent that the underwriters over-allotment option was not exercised. Upon the Initial Public Offering, the underwriters partially exercised their over-allotment option. In January 2025, the underwriters remaining over-allotment option expired resulting in the Sponsor forfeiting 216,667 Founder Shares.
F-18
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
As of December 31, 2025 and 2024, there were 5,533,333 and 5,750,000 Class B ordinary shares issued and outstanding, respectively.
The Founder Shares will automatically convert into ClassA ordinary shares concurrently with or immediately following the consummation of the initial Business Combination or earlier at the option of the holder on a one-for-one basis, subject to adjustment for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment. In the case that additional ClassA ordinary shares, or any other equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to or in connection with the closing of the initial Business Combination, the ratio at which ClassB ordinary shares convert into ClassA ordinary shares will be adjusted (unless the holders of a majority of the outstanding ClassB ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of ClassA ordinary shares issuable upon conversion of all ClassB ordinary shares will equal, in the aggregate, 25% of the sum of (i)the total number of all ClassA ordinary shares outstanding upon the completion of the Initial Public Offering (including any ClassA ordinary shares issued pursuant to the underwriters over-allotment option and excluding the ClassA ordinary shares underlying the Private Placement Warrants issued to the Sponsor and the underwriters), plus (ii)all ClassA ordinary shares and equity-linked securities issued or deemed issued, in connection with the closing of the initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination and any private placement-equivalent warrants issued to the Sponsor or any of its affiliates or to officers and directors upon conversion of Working Capital Loans) minus (iii)any redemptions of ClassA ordinary shares by public shareholders in connection with an initial Business Combination; provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.
Holders of record of the Companys ClassA ordinary shares and ClassB ordinary shares are entitled to one vote for each share held on all matters to be voted on by shareholders. Unless specified in the amended and restated memorandum and articles of association or as required by the Companies Act or stock exchange rules, an ordinary resolution under Cayman Islands law and the Companys amended and restated memorandum and articles of association, which requires the affirmative vote of at least a majority of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company is generally required to approve any matter voted on by the shareholders. Approval of certain actions requires a special resolution under Cayman Islands law, which (except as specified below) requires the affirmative vote of at least two-thirds of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company, and pursuant to the amended and restated memorandum and articles of association, such actions include amending the amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company.
There is no cumulative voting with respect to the appointment of directors, meaning, following the initial Business Combination, the holders of more than 50% of ordinary shares voted for the appointment of directors can elect all of the directors. Prior to the consummation of the initial Business Combination, only holders of the ClassB ordinary shares will (i)have the right to vote on the appointment and removal of directors and (ii)be entitled to vote on continuing the Company in a jurisdiction outside the Cayman Islands (including any special resolution required to amend the constitutional documents or to adopt new constitutional documents, in each case, as a result of approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). Holders of the ClassA ordinary shares will not be entitled to vote on these matters during such time. These provisions of the amended and restated memorandum and articles of association may only be amended if approved by a special resolution passed by the affirmative vote of at least 90% (or, where such amendment is proposed in respect of the consummation of the initial Business Combination, two-thirds) of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company.
NOTE 8FAIR VALUE MEASUREMENTS
The fair value of the Companys financial assets and liabilities reflects managements estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
| | Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
| | | | |
| | Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
| | | | |
| | Level 3: | Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability. | |
F-19
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
The following table presents information about the Companys assets and liabilities that are measured at fair value as of December 31, 2025 and 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| | | Level | | December31, 2025 | | | December31, 2024 | | |
| Assets: | | | | | | | | | |
| Investments held in Trust Account | | 1 | | $ | 173,392,824 | | | $ | 167,164,825 | | |
| Liabilities: | | | | | | | | | | | |
| Over-allotment option liability | | 3 | | $ | | | | $ | 64,371 | | |
| Warrant liability | | 1 | | $ | 17,015,000 | | | $ | 2,158,000 | | |
At December 31, 2025 and 2024, investments held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. The estimated fair values of investments held in Trust Account are determined using available market information. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.
The over-allotment option was accounted for as a liability in accordance with ASC 815-40 and was presented within liabilities on the consolidated balance sheets. The over-allotment option liability is measured at fair value at inception and on a recurring basis, with changes in fair value presented within changes in fair value of over-allotment option liability in the consolidated statements of operations. In January 2025, the underwriters remaining over-allotment option expired unexercised.
The Company used a Black-Scholes model to value the over-allotment option. The over-allotment option liability was classified within Level 3 of the fair value hierarchy at the measurement dates due to the use of unobservable inputs inherent in pricing models are assumptions related to expected share-price volatility, expected life and risk-free interest rate. The Company estimates the volatility of its ordinary shares based on historical volatility that matches the expected remaining life of the option. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the option. The expected life of the option is assumed to be equivalent to their remaining contractual term.
The key inputs into the Black-Scholes model were as follows at December 31, 2024 of the over-allotment option:
| Inputs | | December31, 2024 | | |
| Risk-free interest rate | | | 4.45 | % | |
| Expected term (years) | | | 0.12 | | |
| Expected volatility | | | 4.91 | % | |
| Exercise price | | $ | 10.00 | | |
| Fair value of over-allotment unit | | $ | 0.099 | | |
F-20
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Public Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liability in the accompanying consolidated balance sheets. The warrant liability was measured at fair value on a recurring basis, with changes in fair value presented within the consolidated statements of operations. The fair value of the Public Warrants was based on unadjusted quoted prices at the close of market as of December 31, 2025 and 2024.
The following table provides a summary of the changes in the fair value of the Companys Level 3 financial instruments that are measured at fair value on a recurring basis:
| | | Over-allotment option liability | | |
| Fair value at December 31, 2024 | | $ | 64,371 | | |
| Expiration of over-allotment option | | | (64,371 | ) | |
| Fair value at December 31, 2025 | | $ | | | |
NOTE 9SEGMENT INFORMATION
ASC Topic 280,Segment Reporting, establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Companys chief operating decision maker (CODM), or group, in deciding how to allocate resources and assess performance.
The Companys CODM has been identified as the Chief Executive Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has one operating segment.
The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the consolidated statements of operations as net income or loss. The measure of segment assets is reported on the consolidated balance sheets as total assets. When evaluating the Companys performance and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:
| | | December 31, 2025 | | | December 31, 2024 | | |
| Investments held in Trust Account | | $ | 173,392,824 | | | $ | 167,164,825 | | |
| Cash | | $ | 223,698 | | | $ | 1,543,566 | | |
| | | For theYear Ended December 31, 2025 | | | For the Period from June 13, 2024 (Inception) Through December 31, 2024 | | |
| General and administrative expenses | | $ | 5,407,466 | | | $ | 375,613 | | |
| Dividends earned on investments held in Trust Account | | $ | 6,942,927 | | | $ | 749,825 | | |
F-21
DYNAMIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
The key metrics included in segment profit or loss reviewed by the CODM are dividends earned on investments held in Trust Account and general and administrative expenses. The CODM reviews dividends earned on investments held in Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the trust agreement. General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination within the Combination Period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.
The consolidated statements of operations includes other transactions reviewed by the CODM including the change in fair value of warrant liabilities, change in fair value over-allotment liability, and interest earned on cash. The change in fair value of warrant liabilities and change in fair value over-allotment liability are both non-cash transactions. The interest earned on cash is monitored to ensure that the Companys cash is earning an income for the Company.
The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies.
NOTE 10SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the consolidated balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events, other than noted below, that would have required adjustment or disclosure in the financial statements.
On February 20, 2026, the Company repaid the Sponsor $155.
F-22