dMY Squared Technology Group, Inc.

Item1A. Risk Factors

Factors that could cause our actual results to differ materially from those in this Report are any of the risks described in our Annual Report on Form 10-K filed with the SEC on April 3, 2025. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Report, except as described below, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on April 3, 2025. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Changes in international trade policies, tariffs and treaties affecting imports and exports may have a material adverse effect on our search for an initial Business Combination target, our ability to complete an initial Business Combination, and/or our business, financial condition and results of operations following completion of an initial Business Combination.

There have recently been significant changes to international trade policies and tariffs affecting imports and exports. The U.S. has implemented a range of new tariffs and increases to existing tariffs, and, in response to the tariffs announced by the U.S., other countries have imposed new or increased tariffs on certain exports from the United States. There is currently significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, government regulations and tariffs. We cannot predict whether, and to what extent, current tariffs will continue or trade policies will change in the future. Any significant increases in tariffs on goods or materials or other changes in trade policy, or the perception that such changes could occur, could negatively affect our search for a Business Combination target and/or our ability to complete our initial Business Combination. For example, if we pursue a target company which sources or manufactures material components outside of the U.S., these changes could materially impact such target companys business and financial performance. Similarly, if we pursue a target company which exports products outside of the U.S., retaliatory tariff and trade measures imposed by other countries could affect such targets ability to export products and therefore adversely affect its sales. We may not be able to adequately address the risks presented by these tariffs or other potential trade policy changes. As a result, we may deem it costly, impractical or risky to complete an initial Business Combination with a particular target or with a target in a particular industry or from a particular country. Consequently, the pool of potential target companies may be reduced, which could impair our ability to identify a suitable target and to complete an initial Business Combination. The business prospects of a particular target for a Business Combination could change even after we enter into a business combination agreement, as a result of tariffs or the threat of tariffs that may have a material impact on that targets business. Accordingly, changes in trade and tariff policies could prevent or make it difficult or more expensive for us to complete an initial Business Combination. Tariffs and threats of tariffs and other potential trade policy changes could also lead to material adverse effects on a post-Business Combination company.

We have identified material weaknesses in our internal control over financial reporting. These material weaknesses could continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses identified through such evaluation in those internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

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As previously disclosed, we identified an error in the formula for the redemption value for Class A shares subject to possible redemption as of March 31, 2024, June 30, 2024 and September 30, 2024, which resulted in a material misstatement of our Class A common stock subject to possible redemption and the accumulated deficit and related financial disclosures in each of the Quarterly Reports on Form 10-Q as of and for the three months ended March 31, 2024, as of and for the three and six months ended June 30, 2024, and as of and for the three and nine months ended September 30, 2024 (the 2024 Affected Periods). As a result, our management has concluded that a material weakness existed in the Companys internal control over financial reporting as of December 31, 2024, and that the Companys disclosure controls and procedures were ineffective as of December 31, 2024. The Company intends to take steps to remediate this material weakness, including plans to increase scrutiny over Trust Account balances, to enhance documentation of processes, and to increase communication among the Companys management and board of directors. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

Additionally, as previously disclosed, we identified an error in our Quarterly Report on Form 10-Q as of and for the three months ended March 31, 2025 (the 2025 Affected Period). We concluded that we had not properly recognized excise tax payable under the Inflation Reduction Act of 2022 (IRA) related to the redemption of 3,980,414 shares of Class A common stock in January 2024. While the impact was previously considered immaterial at December 31, 2024 due to offsetting over-accrued income taxes, that offset was eliminated in the first quarter of 2025, making the full liability material. As a result, the audit committee of the board of directors, in consultation with management, determined that the financial statements for the quarter ended March 31, 2025 should no longer be relied upon and must be restated.

The error in the 2025 Affected Period reflects a deficiency in our internal controls related to the evaluation and recognition of excise tax obligations. As a result, our management has concluded that a material weakness existed in the Companys internal control over financial reporting as of March 31, 2025, and that the Companys disclosure controls and procedures were not effective as of March 31, 2025. Although we maintain processes to identify and apply accounting requirements, this error highlights the need for enhanced procedures to monitor complex and emerging tax-related guidance and to ensure timely recognition of such obligations. Our remediation plans include implementing enhanced monitoring of new tax guidance, expanding internal review procedures for non-routine and tax-sensitive transactions, and reinforcing communication protocols between management and advisors.

Efforts to remediate the foregoing material weaknesses may not be effective or prevent any future material weakness or significant deficiency in our internal control over financial reporting. If our efforts are not successful or other material weaknesses or control deficiencies occur in the future, we may be unable to report our financial results accurately on a timely basis, which could cause our reported financial results to be materially misstated and result in the loss of investor confidence and cause the market price of our Class A common stock to decline.

We can give no assurance that the measures we have taken or plan to take in the future will remediate the material weaknesses identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls.

We may face litigation and other risks as a result of the material weaknesses in our internal control over financial reporting.

As discussed elsewhere in this Quarterly Report, we have identified material weaknesses in our internal controls over financial reporting. As a result of such material weaknesses, the restatement of our financial statements for the 2025 Affected Period and the 2024 Affected Periods and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatements and material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date of this Quarterly Report, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future.

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