Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the Company's 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.

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.

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 Pubco's 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.

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.

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 Factors-Risks Relating to our Search for, and Consummation of or Inability to Consummate, a Business Combination-Our independent registered public accounting firm's 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 Company's 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 Company's 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).

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 Company's consolidated financial statements.