425: dMY Squared Extends Horizon Quantum Merger Deadline

dMY Squared Technology Group clarifies its ability to extend the deadline for its business combination with Horizon Quantum Computing, potentially to March 29, 2026.

Summary

• dMY Squared Technology Group, Inc. (dMY Squared) issued a press release clarifying its ability to extend the date for consummating its initial business combination.
• The company's amended and restated articles of organization permit up to 23 monthly extensions.
• Each monthly extension requires a deposit of $50,000 into the company's trust account.
• These extensions could potentially push the deadline to December 29, 2025, with further extensions possible with shareholder approval.
• The outside date under the business combination agreement with Horizon Quantum Computing Pte Ltd. (Horizon Quantum) automatically extends to the last date for the company to consummate its initial business combination, up to March 29, 2026.
• The extensions are intended to provide additional time to complete the previously-announced business combination with Horizon Quantum.

Sentiment

Score: 5

Explanation: The need for an extension is a slight negative, indicating delays and costs. However, management's reiterated commitment to the deal and the availability of a clear extension mechanism provide some stability, balancing the sentiment to neutral.

Positives

• The company has the contractual ability to extend the business combination deadline, providing flexibility to complete the transaction.
• Management expresses continued excitement and commitment to the Horizon Quantum Computing partnership, indicating ongoing dedication to the deal.
• The extensions allow additional time to satisfy closing conditions and navigate the complexities of the business combination.

Negatives

• The need for extensions indicates the business combination is taking longer than initially anticipated, suggesting potential unforeseen hurdles.
• Each monthly extension requires a $50,000 deposit into the trust account, which will reduce the funds available for the combined entity or increase transaction costs.
• The extended timeline introduces prolonged uncertainty for investors regarding the completion of the merger, which could impact investor sentiment.

Risks

• The occurrence of any event, change, or circumstances that could lead to the termination of the business combination agreement.
• Potential legal proceedings that may be instituted against the parties following the announcement of the business combination and the business combination agreement.
• Inability to complete the business combination due to failure to obtain shareholder approvals or other closing conditions.
• Horizon Quantum's ability to scale and grow its business, and the realization of expected growth.
• Uncertainty regarding Horizon Quantum's cash position following the closing of the business combination.
• Inability to obtain or maintain the listing of Holdco's securities on a stock exchange post-business combination.
• The risk that the announcement and pendency of the business combination disrupt Horizon Quantum's current plans and operations.
• Challenges in recognizing the anticipated benefits of the business combination, potentially affected by competition, Holdco's ability to grow profitably, and retaining key employees.
• Costs related to the business combination.
• Changes in applicable laws and regulations or political and economic developments.
• Horizon Quantum may be adversely affected by other economic, business, and/or competitive factors.
• Uncertainty regarding Horizon Quantum's estimates of expenses and profitability.
• The amount of redemptions by dMY Squared's public shareholders.
• Other risks and uncertainties detailed in dMY Squared's Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and the registration statement.

Future Outlook

The company intends to proceed expeditiously towards closing the business combination with Horizon Quantum Computing, utilizing the available extensions to provide additional time for completion. Management remains excited about the opportunity to partner with Horizon Quantum to develop a common quantum software platform.

Management Comments

• "We continue to be incredibly excited at the opportunity to partner with the Horizon Quantum team to realize its mission of developing a common quantum software platform, and are proceeding expeditiously towards closing the transaction." Harry You, Chairman and CEO of dMY Squared.

Industry Context

This filing relates to a Special Purpose Acquisition Company (SPAC) extending its deadline to complete a de-SPAC transaction. Such extensions are common in the SPAC market, particularly for complex mergers or when market conditions necessitate additional time for regulatory approvals or shareholder engagement. The target, Horizon Quantum Computing, operates in the emerging and high-growth quantum computing sector, which often involves lengthy development cycles and significant capital requirements.

Comparison to Industry Standards

• NA

Corporate Governance

Legal Proceedings

• The outcome of any legal proceedings that may be instituted against the parties following the announcement of the business combination and the business combination agreement is a risk factor.

Stakeholder Impact

• Shareholders: Will be required to vote on the business combination; potential for redemptions due to extended timeline; continued uncertainty regarding the merger's completion.
• Management: Continues to work towards closing the transaction, with Harry You reiterating commitment.
• Horizon Quantum Computing: Gains additional time to prepare for the merger and potentially meet closing conditions.

Next Steps

• Holdco and Horizon Quantum will prepare and file a registration statement with the SEC, including a preliminary proxy statement/prospectus.
• After the registration statement is declared effective, dMY Squared will mail a definitive proxy statement/prospectus to its shareholders.
• A special meeting of dMY Squared's shareholders will be held to vote on the business combination.
• Completion of the business combination with Horizon Quantum Computing.

Key Dates

Recommendation

The filing primarily addresses a procedural extension for a previously announced business combination, rather than new financial performance or strategic developments. While the extension introduces some uncertainty and cost, management's reiterated commitment to the deal suggests it is still on track. Without new material financial information or a significant change in the deal terms, a 'hold' recommendation is appropriate, advising investors to await further updates on the merger's progress and the eventual proxy statement/prospectus.

Keywords

SPAC, Business Combination, Quantum Computing, Merger Extension, Horizon Quantum, dMY Squared, DMYY, SEC Filing