DMYY: $26.7M Trust vs $10.1M Warrant Loss; Going-Concern as LOI with Horizon Quantum

dMY Squared Technology Group, Inc. (NYSE: DMYY) - Quick take

The company is a blank‑check (SPAC) that has not commenced operating activities and is actively pursuing a business combination. The June 30, 2025 10‑Q shows a large Trust Account balance but mounting non‑cash losses from remeasurement of warrant liabilities, a widening accumulated deficit, material weaknesses in controls and a going‑concern disclosure. Management announced a non‑binding LOI to combine with Horizon Quantum (pre‑money value ~ $500M).

Key points & statistics

* Total assets: $26,892,798 (June 30, 2025)

* Cash on hand (operating): $348 (end of period); Cash beginning: $309,399

* Cash and investments held in Trust Account: $26,680,869

* Total liabilities: $19,604,780

* Derivative warrant liabilities (total): $11,544,350 (Public + Private)

* Class A common stock subject to possible redemption: $26,580,869

* Shareholders' deficit (accumulated deficit): $(19,292,851)

* Advances from related parties: $1,398,004

* Convertible note - related parties outstanding: $941,667 (as of 6/30/25); subsequently increased to $991,667

* Overfunding loans: $947,850

* Deferred underwriting commissions: $2,211,650

* Excise tax payable recorded: $421,924 (related to January 2024 redemptions)

* Investment income from Trust Account (six months): $532,812

* General & administrative expense (six months): $1,270,961

* Change in fair value of derivative warrant liabilities: $(10,093,750) (six months)

* Net loss: $(6,374,935) (three months ended 6/30/25); $(10,931,166) (six months ended 6/30/25)

* Basic and diluted net loss per share, Class A: $(1.63) (three months); $(2.79) (six months)

* Weighted average Class A shares outstanding: 2,338,586

* Net cash used in operating activities (six months): $(773,801)

* Net change in cash (six months): $(309,051)

* LOI announced (non‑binding) for proposed Business Combination with Horizon Quantum - proposed pre‑money equity value ~ $500 million

Positive aspects

* Trust account strength: $26.68M in the Trust Account provides the primary economic backing for a future business combination.

* Investment income: Trust Account generated $532,812 in the first half of 2025, helping offset operating cash needs.

* Sponsor support: Related‑party advances and the convertible note continue to fund operations/extensions (advances $1.398M; convertible note ~$942K increasing to $991.7K subsequent).

* Active deal effort: LOI with Horizon Quantum signals management is pursuing a high‑profile target (quantum software) with a stated pre‑money valuation.

Negative aspects (income statement and related)

* Large non‑cash losses: The dominant driver of the period loss is a $10.09M fair‑value loss on derivative warrant liabilities (six months), swinging net loss to $(10.93M).

* Operating cash depleted: Operating cash fell to $348; the company reports a working capital deficit (~$4.7M) and minimal operating liquidity outside the Trust Account.

* Shareholders' deficit widened: Accumulated deficit increased from $(6.85M) to $(19.29M) at 6/30/25.

* Excise tax and tax filing risk: $421,924 excise tax liability recorded; 2024 excise tax return not filed as of report date - potential penalties/interest risk.

* Ongoing public company costs: G&A of $1.27M for six months with limited cash cushion; Sponsor payments are necessary to sustain operations.

* Material weaknesses and restatement risk: Management disclosed material weaknesses in internal control over financial reporting and restated the March 31, 2025 10‑Q; controls remain a remediation work in progress.

* Going‑concern: Management states substantial doubt about ability to continue as a going concern through the earlier of liquidation date or completion of a business combination.

What to watch next (investor checklist)

* Progress on definitive merger agreement with Horizon (if executed) and financing structure-dilution and cash available post‑transaction.

* Timing and outcome of excise tax filings/payments and any related penalties.

* Remediation of internal control weaknesses and any further restatements or SEC inquiries.

* Movement in warrant market prices (affects derivative liability remeasurement) and any cashless/structural changes to warrants.

* Additional sponsor funding or third‑party financing to cover operating costs and potential transaction expenses.

Bottom line: DMYY holds substantial funds in its Trust Account and is pursuing a significant quantum‑era target, but near‑term financials are dominated by non‑cash warrant remeasurements, minimal operating cash, a growing accumulated deficit, excise tax exposure and material control weaknesses. The deal outcome, sponsor funding and remediation of controls will determine whether the company can convert its Trust Account strength into a successful business combination.