425: Horizon Quantum Details Quantum Computer Investment, SPAC Merger

Horizon Quantum Computing's CEO discusses a $2.6 million investment in its quantum computer, its strategic importance, and the timeline for commercial applications, alongside details of its ongoing business combination with dMY Squared.

Summary

• Horizon Quantum Computing has invested approximately $2.6 million in the construction of its quantum computer and associated test electronics.
• The primary purpose of this investment is to directly integrate Horizon's software development tools, including Triple Alpha, with the control systems of the hardware, allowing for complete control over the full software and hardware stack.
• The system also serves as a testbed for users of Horizon's tools, enabling them to deploy programs on both cloud-based systems and Horizon's own system in Singapore.
• Horizon is experiencing rapid growth and is expanding its science and engineering teams in Singapore and Ireland, with aggressive growth planned over the next year as the company goes public.
• Commercial applications for quantum computing with real-world impact are estimated to be 2-4 years away, based on expert surveys.
• Future applications are expected to be wide-ranging, impacting basic science, pharmaceuticals, finance, and artificial intelligence.
• Horizon Quantum is actively partnering with Singaporean companies, such as Entrepreneur Labs, focusing on areas like error correction within their compile chain.
• The company is engaged in a previously announced business combination with dMY Squared Technology Group, Inc., involving Horizon Quantum Holdings Ltd. (Holdco).
• A registration statement on Form F-4 has been filed, which includes a preliminary proxy statement for dMY Squared and a preliminary prospectus for Holdco.
• The business combination also involves a private placement (PIPE Transaction) of approximately $110 million of Holdco's Class A ordinary shares.

Sentiment

Score: 7

Explanation: The filing presents a generally positive outlook, highlighting strategic investments, rapid growth, and significant future potential in quantum computing. The ongoing SPAC merger and associated PIPE transaction provide a clear path for capital and expansion. However, the acknowledgment that real-world impact is still 2-4 years away and the inherent risks associated with a SPAC merger and early-stage technology temper the sentiment from being extremely positive.

Positives

• Investment of $2.6 million in a proprietary quantum computer and testbed enhances control over the full software and hardware stack.
• The testbed system is available to users, fostering integration and development within their ecosystem.
• The company is in a period of rapid growth, expanding its science and engineering teams in Singapore and Ireland.
• Strategic partnerships with Singaporean companies like Entrepreneur Labs are in place for technology development.
• The ongoing business combination with dMY Squared and a $110 million PIPE transaction are expected to provide capital for scaling and growth.
• Quantum computing is projected to have wide-ranging applications in 2-4 years across basic science, pharma, finance, and AI.

Negatives

• Quantum computing technology is still "a few years away" (estimated 2-4 years) from having real-world impact and solving meaningful problems.
• Significant technology development is still required to address real-world problems with quantum computers.
• The company is unable to disclose public numbers regarding potential job creation or specific growth figures at this time.

Risks

• Occurrence of any event, change, or circumstances that could terminate the business combination agreement or the PIPE Transaction.
• Outcome of any legal proceedings that may be instituted against the parties following the announcement of the Business Combination.
• Inability to complete the Business Combination due to failure to obtain shareholder approvals or other closing conditions.
• Changes to the structure of the Business Combination required by laws, regulations, or regulatory approval conditions.
• Horizon Quantum's ability to scale and grow its business, including through the use of PIPE proceeds.
• The cash position of Horizon Quantum following the closing of the Business Combination.
• Inability to obtain or maintain the listing of Holdco's securities on the New York Stock Exchange, NYSE American, or Nasdaq.
• Risk that the announcement and pendency of the Business Combination disrupts Horizon Quantum's current plans and operations.
• Ability to recognize the anticipated benefits of the Business Combination and PIPE Transaction, which may be affected by competition, Holdco's ability to grow and manage growth profitably, and retain key employees.
• Costs related to the Business Combination.
• Changes in applicable laws and regulations or political and economic developments.
• Possibility that Horizon Quantum may be adversely affected by other economic, business, and/or competitive factors.
• Horizon Quantum's estimates of expenses and profitability.
• The amount of redemptions by dMY Squared public shareholders.
• Difficulties operating Horizon Quantum's quantum processor and the possibility that it does not provide expected advantages.
• The ability to successfully or timely consummate the PIPE Transaction.

Future Outlook

Horizon Quantum expects to grow aggressively over the next year as it goes public. Commercial applications of quantum computing with real-world impact are anticipated within a 2-4 year window, with potential to revolutionize basic science, pharmaceuticals, finance, and artificial intelligence. The company is focused on technology development to address these future problems.

Management Comments

• "We have complete control over both the software and hardware stack."
• "It gives us a test bed system that we're able to make available to users of our tools."
• "We're fortunate to be in a period of rapid growth at the moment in the company."
• "We intend to grow quite aggressively over the next year as we go public."
• "We're still a few years away from seeing really meaningful problems solved on quantum computers. However, once we get there, we expect the applications to be quite wide ranging, coming across everything from basic science to pharma, finance and areas like AI."
• "The median crossover from experts between less likely than not to more likely than not [for commercial applications] is in the three to five year window, at least in last year's report, so maybe about two to four years."

Industry Context

The quantum computing industry is rapidly advancing, with systems scaling up, but it remains a nascent field where widespread real-world applications are still 2-4 years away. Horizon Quantum's strategy of integrating software and hardware, developing a testbed, and focusing on core technology development aligns with the industry's current phase of foundational build-out before broad commercialization. The ongoing SPAC merger reflects a trend of private quantum technology companies seeking public market access for capital to fund long-term development.

Legal Proceedings

• Outcome of any legal proceedings that may be instituted against the parties following the announcement of the Business Combination and the Business Combination Agreement.

Stakeholder Impact

• Shareholders (dMY Squared): Will vote on the Business Combination and face potential dilution from the PIPE transaction.
• Shareholders (Horizon Quantum/Holdco): Will become shareholders of the combined entity, benefiting from the capital raise and public listing.
• Employees: Benefit from rapid growth and team expansion in Singapore and Ireland.
• Customers/Users: Will gain access to Horizon's quantum computer testbed and benefit from future quantum applications.
• Investors: Provided with information regarding the strategic direction, financial investment, and risks associated with the business combination and future prospects.

Next Steps

• Completion of the business combination with dMY Squared Technology Group, Inc.
• Mailing of a definitive proxy statement/prospectus to dMY Squared shareholders for voting on the Business Combination.
• Aggressive growth and team expansion over the next year as the company goes public.
• Continued technology development to enable real-world quantum computing applications.

Key Dates

Keywords

Quantum computing, Software infrastructure, Hardware testbed, SPAC merger, dMY Squared Technology Group, Horizon Quantum Computing, Triple Alpha, Singapore technology, Financial technology, Pharmaceutical research, Artificial intelligence, PIPE transaction, SEC filing F-4