byNordic Acquisition Corp: Form 10-Q for the period ended Mar 31, 2025

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to byNordic Acquisition Corporation. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Water by Nordic AB. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of the Business Combination, the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of the Business Combination are not satisfied. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering and in the Company’s Form 10-K for the year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov (http://www.sec.gov). Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We are not presently engaged in, and we will not engage in, any operations until we consummate our business combination. We intend to effectuate our business combination using cash from the proceeds of our initial public offering, the private placement of the private shares, the private placement of the forward purchase shares, the proceeds of the sale of our shares in connection with our business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the closing of our initial public offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. We have not selected any specific business combination target.

The issuance of additional shares in connection with a business combination to the owners of the target or other investors, including the forward purchase shares:

• may significantly dilute the equity interest of our public stockholders, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of shares of Class A Common Stock on a greater than one-to-one basis upon conversion of the Class B common stock;
• may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock;
• could cause a change in control if a substantial number of shares of our common stock is 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;
• may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and
• may adversely affect prevailing market prices for our Class A common stock and/or warrants.

Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:

• default and foreclosure on our assets if our operating revenues after a 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;
• our inability to pay dividends on our common stock;
• using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund 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;
• limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and
• other disadvantages compared to our competitors who have less debt.

Recent Developments

Stockholder Meetings

At a special meeting on August 10, 2023, the stockholders of the Company approved amendments to the Company’s amended and restated certificate of incorporation (i) to eliminate the requirement that the Company retain at least $5,000,001 of net tangible assets following the redemption of public shares in connection with a business combination, and (ii) to extend the business combination period from August 11, 2023 to February 12, 2024, or such earlier date as determined by the Company’s board of directors, in its sole discretion, and to allow the Company by resolution of the board without another stockholder vote, to elect to extend the business combination Period by one additional month, for a total of six additional months, until August 12, 2024, unless the closing of a business combination shall have occurred prior thereto. In connection with the amendments to the amended and restated certificate of incorporation, the Company notified stockholders that the Company’s sponsor funded a deposit of $625,000 into the Trust Account and that the Company would only exercise any monthly extension after February 12, 2024 if the sponsor or one of its affiliates or designees deposits into the trust account the lesser of $105,000 or $0.04 per outstanding public share with respect to each such extension.

In connection with the August 2023 amendments to the Company’s amended and restated certificate of incorporation, 13,663,728 of the public shares were redeemed at a redemption price of approximately $10.65 per share, or $145,585,000 in the aggregate, and approximately $38,211,000 remained in the trust account following such redemptions.

Along with the redemptions of the Company’s public shares, the Company recorded a 1% excise tax liability of $1,455,846 on the balance sheet as of the redemption date. The liability does not impact the statements of operations and offsets against additional paid-in capital or accumulated deficit if additional paid-in capital is not available.

At an annual meeting on August 7, 2024, the stockholders of the Company approved amendments (the “August 2024 Amendments”) to the Company’s amended and restated certificate of incorporation to extend the business combination period by one month each time from August 12, 2024 to August 12, 2025, or such earlier date as determined by the board in its sole discretion, unless the closing of a business combination shall have occurred prior thereto. The Company is required to deposit $40,312 to the trust account with respect to each such monthly extension. In connection with the August 2024 Amendments, 2,578,476 of the public shares were tendered for redemption for a total redemption price of $29,491,422 or approximately $11.44 per share.

Along with the redemptions of the Company’s public shares, the Company recorded a 1% excise tax liability of approximately $294,914 on the balance sheet as of the redemption date. The liability does not impact the statements of operations and offsets against additional paid-in capital or accumulated deficit if additional paid-in capital is not available.

Further in connection with the annual meeting, the stockholders of the Company approved amendments to the Company’s amended and restated certificate of incorporation to provide for the right of a stockholder of the Company’s Class B common stock, par value $0.0001 per share, to convert into shares of the Company’s Class A common stock, par value $0.0001 per share on a one-for-one basis at any time, and from time to time, prior to the closing of a business combination at the election of the holder.

Promissory Notes

On May 9, 2023, the Company issued a convertible promissory note to the sponsor for $1,725,000 in connection with the sponsor’s funding of the Initial Extension (the “Initial Extension Loan”), and on May 12, 2023, the Company issued a convertible promissory note to the Sponsor for $775,000 in connection with the Sponsor’s funding of the Company’s working capital needs (the “Initial Working Capital Loan”).

In August 2023, the Company issued to the Sponsor a convertible promissory note in the amount of $625,000 (the “Additional Extension Loan”) in connection with the Sponsor’s funding of an extension deposit to the Trust Account. And in August 2023 the Company issued a convertible promissory note in the principal amount of $710,000 (the “Additional Working Capital Loan”) to the Sponsor to provide the Company with additional working capital, of which $110,000 was funded on August 10, 2023 and $600,000 is available for future borrowings.

In December 2023, the Company issued a promissory note in the principal amount of $1,700,000 (the “December 2023 Note”) to DDM Debt AB (the “DDM”), an affiliate of the Sponsor. The proceeds of the borrowing under the December 2023 Note were used to provide the Company with general working capital. The December 2023 Note is not convertible into securities of the Company.

The Company obtained additional loans from DDM in the amount of $300,000 and $200,000, respectively, pursuant to promissory notes issued in April 2024 (the “April 2024 Note”) and June 2024 (the “June 2024 Note”). (See Note 5). The April 2024 Note and the June 2024 Note are not convertible into securities of the Company.

In August and September 2024, the Company issued promissory notes in the principal amount of $200,000 (the “August 2024 Note”) and $300,000 (the “September 2024 Note”), respectively, to DDM. The proceeds of the borrowings under the August 2024 Note and September 2024 Note will be used to provide the Company with general working capital. The August 2024 Note and September 2024 Note are not convertible into securities of the Company.

In December 2024, January 2025 and March 2025, the Company issued promissory notes in the principal amount of $300,000 (the “December 2024 Note”), $400,000 (the “January 2025 Note”) and $250,000 (the “March 2025 Note”), respectively, to DDM. The proceeds of the borrowings under the December 2024 Note, January 2025 Note and March 2025 Note will be used to provide the Company with general working capital. The December 2024 Note, the January 2025 Note and the March 2025 Note are not convertible into securities of the Company.

Together, the Initial Extension Loan, the Initial Working Capital Loan, the Additional Extension Loan, the Additional Working Capital Loan are the Convertible Promissory Notes. And together the December 2023 Note, the April 2024 Note, the June 2024 Note, the August 2024 Note, the September 2024 Note, the December 2024 Note, the January 2025 Note and the March 2025 Note are the Non-convertible Promissory Notes.

Neither the Convertible Promissory Notes nor the Non-convertible Promissory Notes bear interest and are due upon consummation of a Business Combination. If the Company completes a Business Combination, the Company would expect to repay the Convertible Promissory Notes and the Non-convertible Promissory Notes from funds that are released to the Company from the Trust Account. At the option of the holder of the Convertible Promissory Notes, the holder has the option to convert all or a portion of the Convertible Promissory Notes into Private Shares at a price of $10.00 per Private Share, which Private Shares will be identical to the Private Shares described herein (Note 5).

Trust Account Funding

Since May 8, 2023 when the Company announced that its Board of Directors elected to extend the date by which the Company has to consummate a Business Combination until the filing of this Form 10-K, the Company has deposited an aggregate of $3,383,120 to the Trust Account to extend the Combination Period to June 12, 2025.

Additional Extensions and Founder Shares Conversion

In connection with the August 7, 2024, annual meeting of stockholders, the Sponsor, byNordic Holdings and byNordic Holdings II converted an aggregate of 2,000,000 of their shares of Class B common stock into shares of Class A common stock on a one-for-one basis (the “Conversion”). Such converted shares of Class A common stock are not entitled to receive funds from the Trust Account through redemptions or otherwise and will remain subject to the existing transfer restrictions. After giving effect to the redemptions in August 2024 and the Conversion, the Company had 3,947,796 shares of Class A common stock (including 2,000,000 converted shares of Class B common stock) and 3,750,000 shares of Class B common stock outstanding.

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard

As previously disclosed, on April 10, 2024, The Nasdaq Stock Market LLC (“Nasdaq”) notified byNordic Acquisition Corporation (the “Company”) that it did not comply with the minimum 400 total shareholders requirement for continued inclusion set forth in Nasdaq’s Listing Rule 5450(a)(2) (the “Rule”). The Company submitted a plan of compliance on May 24, 2024 demonstrating how it would cure the deficiency in compliance.

On September 5, 2024, Nasdaq notified the Company that it had regained compliance with the minimum 400 total shareholders requirement under the Rule.

On February 11, 2025 the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market stating that the staff of Nasdaq determined that: the Company’s securities would be delisted from Nasdaq, and trading of the Company’s Class A common stock, warrants, and units would be suspended at the opening of business on February 18, 2025, and a Form 25-NSE would be filed with the Securities and Exchange Commission, which would remove the Company’s securities from listing and registration on Nasdaq pursuant to Nasdaq Listing Rule IM-5101-2. Under Rule IM-5101-2, a special purpose acquisition company must complete one or more business combinations within 36 months of the effectiveness of its initial public offering registration statement. Since the Company failed to complete its initial business combination by February 8, 2025, the Company did not comply with Rule IM-5101-2, and its securities became subject to delisting.

The Company could have appealed the Nasdaq staff’s determination to a hearings panel, pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series. However, the staff noted that pursuant to Nasdaq Listing Rule 5815(c)(1)(H), in the case of a Company whose business plan is to complete one or more acquisitions, as described in Rule IM-5101-2, where the staff’s delisting determination letter issued is based on a failure to satisfy the requirement set forth in Rule IM-5101-2(b) to complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement, the panel may only reverse a delisting decision where the panel determines that the staff delisting determination letter was in error and that the Company never failed to satisfy the requirement.

The Company elected not to appeal Nasdaq’s determination to delist the Company securities and accordingly, the Company’s securities were suspended from trading on Nasdaq at the opening of business on February 18, 2025. The Company’s units, common stock and warrants commenced trading on the over-the-counter market on February 18, 2025.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from December 27, 2019 (inception) through March 31, 2025 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the 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 three months ended March 31, 2025, we had a net loss of $179,458 which consisted of operating costs of $283,060 and federal income taxes of $22,369, partially offset by interest earned on investments held in trust account and cash of $125,971.

For the three months ended March 31, 2024, we had net income of $94,733 which consisted of interest earned on investments held in trust account and cash of $526,580, partially offset by operating costs of $330,841 and federal income taxes of $101,006.

Liquidity, Capital Resources and Going Concern

As of March 31, 2025, the Company had cash of $269,457 not held in the Trust Account and a working capital deficit of $7,089,969.

For the three months ended March 31, 2025, cash used in operating activities was $532,195. Net loss of $179,458 was affected by interest earned on investments in the Trust Account of $125,645 and deferred taxes of $293. Changes in operating assets and liabilities provided $226,799 of cash for operating activities. Cash used in investing activities was $120,936 which includes investment of cash to the Trust Account. Cash provided by financing activities includes $650,000 of proceeds from the promissory notes to related party.

For the three months ended March 31, 2024, cash used in operating activities was $237,456. Net income of $94,733 was affected by interest earned on investments in the Trust Account of $516,175, deferred taxes of $36,946 and unrealized gain on investments in the Trust Account of $1,190. Changes in operating assets and liabilities used $222,122 of cash for operating activities. Cash used in investing activities was $188,340 including $21,660 withdrawn from the Trust Account to pay taxes partially offset by $210,000 of deposits to the Trust Account.

As of March 31, 2025, we had marketable securities and cash held in the Trust Account of $12,111,428 consisting of money market funds which are invested primarily in U.S. Treasury securities. Interest income on the balance in the Trust Account may be used by us to pay taxes. For the three months ended March 31, 2025, we did not withdrawn any interest earned on the Trust Account for the payment of franchise and income taxes.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable), to complete our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our 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.

As of March 31, 2025, the Company had cash of $269,457 not held in the Trust Account and available for working capital purposes.

The Company has entered into the Convertible Promissory Notes and Non-convertible Promissory Notes and as of March 31, 2025 borrowed $6,885,000 to be used to extend the Combination Period and for general working capital purposes. The aggregate principal amounts outstanding under Convertible and Non-Convertible Promissory Notes issued to the Sponsor and DDM Debt AB are $3,235,000 and $3,650,000, respectively.

The Company currently has until June 12, 2025 or the end of any further extension period to consummate a Business Combination, provided that any extension beyond August 12, 2025 must be pursuant to an amendment of its Amended and Restated Certificate of Incorporation. It is uncertain that the Company will be able to consummate a Business Combination by June 12, 2025 or such later date to which the business combination period may be extended. If a Business Combination is not consummated by June 12, 2025 or during any further extension period, there will be a mandatory liquidation and subsequent dissolution.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that (i) uncertainty with respect to the Company’s ability to obtain the cash needed to fund professional fees and other expenses related to its target search activities, SEC reports, tax returns, securities listing, trust and stock transfer administration and other business and corporate activities, and trust deposits required for further extensions to the Combination Period, and (ii) 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 Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after June 12, 2025 or at the end of any further extension period.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2025. 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 pay the Sponsor a total of $10,000 per month for administrative support services and outstanding promissory notes to the Sponsor and its affiliates in the aggregate amount of $6,885,000 as of March 31, 2025. We began incurring the administrative support services fees on February 8, 2022 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.

The underwriters are entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the IPO and exercise of the over-allotment option, or $6,037,500, upon the completion of the Company’s business combination. The Company’s former legal counsel agreed to defer legal fees in the amount of $175,000, which is payable (without interest) upon and concurrently with the completion of a business combination.

Critical Accounting Policies

We describe our significant accounting policies in Note 2 - Summary of Significant Accounting Policies, of the Notes to Financial Statements included in this report. Our financial statements have been prepared in accordance with U.S. GAAP. Certain of our accounting policies require that the Company’s management apply significant judgments in defining the appropriate assumptions integral to financial estimates. On an ongoing basis, the Company’s management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. Judgments are based on historical experience, terms of existing contracts, industry trends and information available from outside sources, as appropriate. However, by their nature, judgments are subject to an inherent degree of uncertainty, and, therefore, actual results could differ from our estimates.

Evaluation of Disclosure Controls and Procedures

In February 2022, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer (together, the “Certifying Officers”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Report due to the material weakness in our internal control over financial reporting related to the Company’s accounting for certain deferred contingent transaction costs. As a result, we performed additional analysis as deemed necessary to ensure that the financial statements included in this Form 10-Q were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management has implemented remediation steps to improve our internal control over financial reporting. Specifically, we expanded and improved our review process for accrued, deferred or contingent expenses and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, identifying third-party professionals with whom to consult on complex questions regarding accounting for accrued, deferred or contingent expenses, and improving the processes for sharing, approving and evaluating contractual arrangements and invoices related to accrued, deferred or contingent expenses. We believe that the actions described above will be sufficient to remediate the identified material weakness and strengthen our internal control over financial reporting.

Changes in Internal Control over Financial Reporting

Other than as described above and elsewhere in this Report, 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.

Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our final prospectus for our Initial Public Offering filed with the SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. As of the date of this Report, there have been no material changes to the risk factors disclosed in our Form 10-K for the year ended December 31, 2024 filed with the SEC.