Overview

dMY Squared Technology Group, Inc. is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. As of June 30, 2024, the company had not commenced any operations and was focused on its formation and the Initial Public Offering (IPO) process.

Financial Performance

• The company completed its IPO in October 2022, raising $60 million in gross proceeds. It also raised an additional $3.2 million through a partial exercise of the underwriter’s over-allotment option.
• Since the IPO, the company’s activity has been focused on searching for a prospective initial business combination. It has not generated any operating revenue to date.
• For the three months ended June 30, 2024, the company reported a net loss of $321,000, consisting of $230,000 in general and administrative expenses and $415,000 in tax expenses, partially offset by $324,000 in interest income.
• For the six months ended June 30, 2024, the company reported a net loss of $490,000, consisting of $608,000 in general and administrative expenses and $937,000 in tax expenses, partially offset by $670,000 in interest income.
• In comparison, for the three and six months ended June 30, 2023, the company reported net income of $1.2 million and $1.7 million, respectively, driven by changes in the fair value of derivative warrant liabilities and higher interest income.

Liquidity and Capital Resources

• As of June 30, 2024, the company had $406,000 in cash and a working capital deficit of $1.6 million.
• The company’s liquidity needs have been satisfied through the net proceeds from the IPO, private placement warrants, and advances from related parties.
• In January 2024, the company issued a $1.75 million convertible promissory note to an affiliate of the sponsor to finance transaction costs and provide the required contribution to extend the combination period. As of June 2024, the company had drawn down $391,667 on this note.
• The company’s management has determined that the liquidity condition and potential need for liquidation raise substantial doubt about the company’s ability to continue as a going concern.

Risks and Uncertainties

• The ongoing Russia-Ukraine conflict and escalation of the Israel-Hamas conflict have created global security concerns that could adversely affect the company’s search for an initial business combination and any target business.
• Geopolitical tensions and resulting sanctions could lead to market disruptions, volatility, and supply chain interruptions that could negatively impact the company.

Outlook

• The company has until August 29, 2024 to complete an initial business combination, having received shareholder approval to extend the combination period multiple times.
• If the company is unable to complete a business combination within the combination period, it will be required to redeem 100% of the public shares and liquidate.
• The company’s ability to continue as a going concern is dependent on its successful completion of an initial business combination within the combination period.