Horizon Space Acquisition I (HSPO) - 2024 Q4 - Annual Report

IPO and Financing - The company completed its IPO on December 27, 2022, issuing 6,900,000 Public Units at an offering price of $10.00 per unit, generating gross proceeds of$69.0 million[17]. - The company also completed a Private Placement on the same day, selling 385,750 Private Units to the Sponsor for gross proceeds of $3,857,500[18]. - Total proceeds from the IPO and Private Placement amounted to$70,207,500, which were placed in a Trust Account for the benefit of public shareholders[19]. - The company has issued three unsecured promissory notes totaling $1 million to the Sponsor for general working capital purposes[49]. - An aggregate of$1,320,000 in extension fees has been deposited into the Trust Account, with $1,250,000 contributed by Shenzhen Squirrel[47]. - The company intends to use substantially all net proceeds from the IPO to acquire a target business and cover related expenses, including deferred underwriting commissions of$2,415,000[132]. Business Combination and Shareholder Meetings - As of September 25, 2023, the company held a shareholder meeting to extend the deadline for completing its initial business combination to March 27, 2024, with a total of 562,779 Ordinary Shares redeemed, releasing approximately $5.93 million from the Trust Account[39]. - A second shareholder meeting on March 22, 2024, approved further extensions, allowing up to nine additional months to complete a business combination, with 815,581 Ordinary Shares redeemed, releasing approximately$8.86 million from the Trust Account[40]. - The company entered into a Business Combination Agreement with Squirrel Enlivened Technology Co., Ltd on September 16, 2024, involving a merger that will result in the cancellation of existing securities in exchange for newly issued shares of PubCo[24]. - The Sponsor Support Agreement was executed on September 16, 2024, where the Sponsor agreed to vote in favor of the Transactions and waive redemption rights[27]. - The company has until April 27, 2025, to consummate the Transactions, with a potential extension to December 27, 2025[53]. - The company must commence liquidation of the Trust Account by December 27, 2024, unless extended by up to twelve monthly extensions, each costing $120,000[46]. Financial Performance and Position - The company has not generated any revenue since its inception and has incurred losses due to formation and operating costs[21]. - As of December 31, 2024, the company reported a net income of$2,112,351, consisting of interest and dividend income of $3,171,545, offset by operating costs of$1,059,194[129]. - The company had cash of $7,815 and a working capital deficiency of$1,974,004 as of December 31, 2024[135]. - The company has incurred and expects to continue incurring significant professional costs to remain a publicly traded company, raising substantial doubt about its ability to continue as a going concern[135]. - The company has not generated any operating revenues to date and relies on interest income from the Trust Account[128]. - The company may need additional financing to consummate its initial business combination or to redeem a significant number of public shares[134]. Regulatory and Compliance Issues - The company received a Nasdaq noncompliance letter on October 3, 2024, regarding the minimum shareholder requirement, but subsequently applied for and was approved to transfer its listing to the Nasdaq Capital Market[35][36]. - The company is subject to PRC laws regarding foreign investments and data security, which may impact its ability to raise capital overseas[57]. - The company has submitted its application to the CSRC for the Transactions, which is currently under review[57]. - The company may need to procure additional permits and approvals for its operations post-Transactions, which could materially affect its business[58]. - The company has not received any denials or expirations of required licenses and approvals for its current business operations in China[58]. - The process of obtaining government approvals, such as from CFIUS, could be lengthy, risking liquidation if not completed in time[81]. Corporate Governance - The board of directors consists of four members, with terms expiring in 2025, 2026, and 2027 for different classes[180]. - Mingyu (Michael) Li serves as the Chief Executive Officer and has extensive experience in private equity and consulting, including leading multiple fundraising efforts[175]. - The audit committee is composed of independent directors Colon, Singh, and Gonzalez Caceres, ensuring compliance with Nasdaq standards[183]. - The compensation committee, chaired by Mark Singh, is responsible for reviewing and approving executive compensation policies and plans[186]. - A clawback policy was adopted on November 28, 2023, requiring executive officers to reimburse erroneously awarded compensation based on restated financial results[195][196]. - The company has established a code of ethics applicable to all directors, officers, and employees, which is available for public review[194]. Shareholder Information - The company has 4,168,739 Ordinary Shares issued and outstanding as of the date hereof[212]. - Mingyu (Michael) Li owns 2,092,750 Ordinary Shares, representing 50.20% of the total[213]. - The group of all officers and directors collectively owns 2,110,750 Ordinary Shares, accounting for 24.41% of the total[213]. - Horizon Space Acquisition I Sponsor Corp. is a 5% holder with 2,092,750 Ordinary Shares, also 50.20%[213]. - Westchester Capital Management, LLC holds 297,000 Ordinary Shares, which is 7.12% of the total[213]. - First Trust Merger Arbitrage Fund owns 280,410 Ordinary Shares, representing 6.73%[213]. - Mizuho Financial Group, Inc. has 399,500 Ordinary Shares, accounting for 9.58%[213]. - WOLVERINE ASSET MANAGEMENT LLC holds 398,712 Ordinary Shares, which is 9.56%[213].