8-K: dMY Squared to Merge with Horizon Quantum in $503M Deal

dMY Squared Technology Group, Inc. (SPAC) has entered into a definitive business combination agreement with Horizon Quantum Computing Pte. Ltd., valuing Horizon Quantum at approximately US$503 million.

Summary

• dMY Squared Technology Group, Inc. (SPAC) will merge with Horizon Quantum Computing Pte. Ltd. (Horizon) through a business combination, forming Horizon Quantum Holdings Ltd. (Holdco).
• The transaction values Horizon Quantum at approximately US$503 million.
• Holdco Class A ordinary shares are expected to be listed on Nasdaq under the ticker HQ upon closing.
• Horizon specializes in developing operating systems software and software development tools for quantum computing, including its integrated development environment, Triple Alpha.
• The transaction involves a dual-class share structure for Holdco, with the founder receiving Class B ordinary shares (three votes per share) and other equityholders receiving Class A ordinary shares (one vote per share).
• Existing dMY Squared warrants will be assumed by Holdco and become exercisable for Holdco Class A Ordinary Shares at an initial exercise price of $11.50 per share.
• The SPAC's trust account holds approximately $26,862,762, which will be used for redemptions and transaction expenses.
• Holdco will adopt a new equity incentive plan reserving 10% of fully diluted shares initially, with a 5% evergreen provision, and an employee share purchase plan reserving 1.5% initially, with a 1% evergreen provision.

Sentiment

Score: 8

Explanation: The filing announces a definitive business combination with a significant valuation for Horizon Quantum, backed by an experienced SPAC sponsor. The strategic focus on quantum software infrastructure is compelling, and management comments are highly positive about future growth and market positioning. The dual-class share structure and new equity plans are designed to support long-term stability and employee incentives. Risks are standard for such transactions and are clearly outlined as forward-looking statements.

Positives

• The transaction is expected to significantly accelerate Horizon Quantum's development of software infrastructure for quantum computing.
• Horizon's software tech stack aims to simplify quantum software creation, automate quantum acceleration, and realize the full potential of quantum programming on existing hardware.
• The partnership with dMY Technology Group, a SPAC sponsor with a track record of success and investment in quantum computing, is seen as beneficial.
• The business combination provides Horizon Quantum with increased access to capital to fund technological development and capitalize on advancements in quantum computing.
• The establishment of a dual-class share structure allows the founder, Dr. Joseph Francis Fitzsimons, to retain significant voting control, which can provide stability and long-term vision.

Negatives

• No explicit negatives were stated in the filing, as it focuses on the proposed transaction and its benefits.

Risks

• The business combination agreement could be terminated due to various events, changes, or circumstances.
• Legal proceedings may be instituted against the parties following the announcement of the business combination.
• The inability to complete the business combination could occur due to failure to obtain shareholder approvals or other closing conditions.
• Horizon's ability to scale and grow its business, and the realization of anticipated advantages, may be affected by competition and the ability to retain key employees.
• The cash position of Horizon following the closing of the business combination is a factor.
• There is a risk of inability to obtain or maintain the listing of Holdco's securities on a stock exchange following the business combination.
• The announcement and pendency of the business combination could disrupt Horizon Quantum's current plans and operations.
• Costs related to the business combination could be higher than anticipated.
• Changes in applicable laws and regulations or political and economic developments could adversely affect the combined entity.
• Horizon Quantum may be adversely affected by other economic, business, and/or competitive factors.
• Horizon Quantum's estimates of expenses and profitability may not be accurate.
• The amount of redemptions by dMY Squared's public shareholders could impact the available cash for the combined company.

Future Outlook

The transaction is expected to close in the first quarter of 2026, subject to shareholder approvals and customary closing conditions. The combined company, Horizon Quantum Holdings Ltd., anticipates listing its Class A ordinary shares on Nasdaq under the ticker HQ. Management believes the merger will significantly accelerate Horizon Quantum's technological development timeline and enhance its ability to capitalize on advancements in quantum computing by building the software infrastructure for quantum advantage.

Management Comments

• Dr. Joe Fitzsimons, Founder and CEO of Horizon Quantum, stated, 'By bringing together languages, compilers, and a cross-hardware runtime environment, we are building the software infrastructure needed to achieve quantum advantage across a broad range of applications and laying practical groundwork for a true quantum operating system.'
• Dr. Fitzsimons also noted, 'By taking Horizon Quantum public now, we expect to significantly increase our access to capital and accelerate our technological development timeline to fully capitalize on the rapid advancements in quantum computing.'
• Harry You, Chairman and CEO of dMY Squared, commented, 'We believe application development is a key component in driving broader adoption of quantum computers to address critical real-world challenges. We are excited to be partnering with the Horizon Quantum team, under Joes visionary leadership, to help make their mission of a common quantum software platform a reality.'
• Mr. You further added, 'The goal of creating a quantum operating system and software stack is elemental and compelling from a technological and investment perspective.'

Industry Context

This business combination positions Horizon Quantum at the forefront of the quantum computing industry's software development, aiming to bridge the gap between complex quantum hardware and practical applications. While much of the industry has focused on hardware, Horizon's emphasis on a hardware-agnostic software platform, integrated development environment (Triple Alpha), and automated quantum acceleration addresses a critical need for broader adoption and realization of quantum advantage. This strategic move aligns with the anticipated shift where software will become increasingly vital as quantum hardware capabilities mature.

Comparison to Industry Standards

• The filing highlights dMY Technology Group's track record with other SPACs, including IonQ (NYSE: IONQ), Rush Street Interactive (NYSE: RSI), Genius Sports (NYSE: GENI), and Planet Labs (NYSE: PL). IonQ is a direct comparable in the quantum computing space, suggesting dMY's experience in bringing quantum technology companies to public markets.
• Horizon Quantum's focus on a 'hardware-agnostic software platform' and 'automating quantum acceleration' differentiates it from hardware-centric quantum companies, aiming to solve the 'software problem' in quantum computing, which is a recognized industry challenge.

Management Changes

Corporate Governance

Legal Proceedings

• No material Actions are pending or, to the knowledge of the Company or SPAC, threatened against either entity or their respective officers/directors that would prevent the transactions or be material to the combined entity.

Related Party Transactions

• Sponsor Support Agreement: dMY Squared Sponsor, LLC (Sponsor) and other insiders agree to vote in favor of the business combination, not transfer subject securities (with exceptions), and waive certain anti-dilution rights.
• Company Support Agreements: Horizon shareholders agree to vote in favor of the business combination, convert preference shares, and waive pre-emption and other similar rights.
• Lock-Up Agreement: dMY Insiders and Horizon Shareholders (Lock-Up Securityholders) agree to restrictions on transferring Holdco Ordinary Shares for two years and Holdco Warrants for 30 days post-closing (with exceptions).
• Registration Rights Agreement: Holdco grants certain registration rights to Sponsor Parties and Company Holders for resale of Holdco securities.
• Sponsor Indemnification Agreement: Holdco and Horizon will indemnify the Sponsor and its affiliates for liabilities arising from SPAC's operations or the business combination, with exceptions for willful misconduct, gross negligence, or bad faith.
• Working Capital Loans: Up to $1,500,000 of loans from dMY Squared Sponsor, LLC or certain officers/directors may be convertible into Private Placement Warrants.

Stakeholder Impact

• Shareholders of dMY Squared and Horizon will become shareholders of Holdco, with varying voting rights based on share class (Class A: 1 vote, Class B: 3 votes for founder).
• Existing dMY Squared warrant holders will have their warrants assumed by Holdco, exercisable for Holdco Class A Ordinary Shares.
• Certain shareholders will be subject to lock-up periods on their Holdco shares and warrants.
• Employees of Horizon will benefit from new equity incentive and employee share purchase plans at Holdco.
• Directors and officers of both dMY Squared and Horizon will have their indemnification rights preserved and D&O insurance coverage maintained.
• Creditors of Horizon may need to provide consent to the amalgamation, and the Company will address any amalgamation objections.

Next Steps

• Holdco will convert from a Singapore private company to a Singapore public company and be renamed Horizon Quantum Holdings Ltd.
• Horizon and Merger Sub 1 will amalgamate, with Horizon surviving as a wholly-owned subsidiary of Holdco.
• Merger Sub 2 will merge with dMY Squared, with dMY Squared surviving as a wholly-owned subsidiary of Holdco.
• Holdco will adopt an Amended & Restated Constitution, including a dual-class share structure.
• Holdco will adopt a new equity incentive plan and an employee share purchase plan.
• dMY Squared, Horizon, and Holdco will jointly prepare and Holdco and Horizon will file a registration statement on Form F-4 with the SEC.
• dMY Squared will mail a definitive proxy statement/prospectus to its shareholders for a special meeting to approve the business combination.
• Horizon will call and hold a general meeting of its shareholders to seek approval for the business combination.
• The parties will use reasonable best efforts to have Holdco's securities approved for listing on Nasdaq.
• Holdco, the dMY Insiders, and Horizon Shareholders will enter into a lock-up agreement and a registration rights agreement at closing.
• Holdco and the Company will enter into a Sponsor Indemnification Agreement with the Sponsor at closing.

Key Dates

Keywords

Quantum Computing, SPAC, Business Combination, Software Infrastructure, Nasdaq Listing, Horizon Quantum, dMY Squared, Holdco, Warrants, Technology, Merger, Financial Reporting