dMY Squared Technology Group Reports $819,000 Net Loss and Financial Restatement for Fiscal Year 2024

dMY Squared Technology Group, Inc. has reported a significant decline in its financial performance for the fiscal year ending December 31, 2024, as detailed in its recent 10-K filing. The company recorded a net loss of approximately $819,000, a stark contrast to a net income of $2.3 million in the previous year. This downturn is attributed to increased general and administrative expenses, which totaled about $1.1 million, and a loss from changes in the fair value of derivative warrant liabilities. The company generated approximately $1.3 million in interest income from its investments held in a trust account, but this was insufficient to offset the losses incurred.

The company also announced a restatement of its financial statements for the first three quarters of 2024 due to errors in calculating the redemption value of its Class A common stock. This restatement has raised concerns regarding the effectiveness of the company's internal controls over financial reporting, which were deemed ineffective as of December 31, 2024. The company plans to implement measures to enhance its internal controls, but the material weakness identified could impact investor confidence and the company's ability to complete its initial business combination.

In terms of operational developments, dMY Squared has extended its deadline to complete a business combination to April 29, 2025, following shareholder approval for an extension. The company has also entered into a non-binding letter of intent for a business combination with Horizon Quantum Computing Pte. Ltd., which values Horizon at approximately $500 million. However, there are no guarantees that a definitive agreement will be reached or that the transaction will be completed.

As of December 31, 2024, dMY Squared had approximately $25.6 million in its trust account, down from $67.5 million the previous year. The company has faced challenges in maintaining liquidity, with a working capital deficit of approximately $2.3 million. The management has indicated that it may need to rely on loans from its sponsor or other related parties to fund its operations and complete a business combination. The company’s ability to continue as a going concern is in question, as it must complete a business combination by the end of the extended period or face mandatory liquidation.

Looking ahead, dMY Squared's management remains focused on identifying a suitable target for its initial business combination, particularly within the professional services sector. However, the competitive landscape for special purpose acquisition companies (SPACs) remains challenging, and the company must navigate various macroeconomic and regulatory uncertainties that could impact its operations and the success of any potential business combination.