Horizon Space Acquisition I (HSPO) - 2024 Q3 - Quarterly Report

IPO and Financing - The company completed its IPO on December 27, 2022, raising gross proceeds of $69,000,000 from the sale of 6,900,000 units at an offering price of $10.00 per unit[94]. - A private placement of 385,750 units was completed concurrently with the IPO, generating an additional $3,857,500[95]. - The total proceeds from the IPO and private placement amounted to $70,207,500, which were placed in a trust account for public shareholders[96]. - The company intends to use substantially all net proceeds from the IPO, including $2,415,000 for deferred underwriting commissions, to acquire target businesses and cover related expenses[121]. - The company issued two unsecured promissory notes totaling $700,000 to the Sponsor for general working capital purposes, with no interest and payable upon the consummation of a business combination[114][129]. Business Operations and Financial Performance - The company has had no revenue and has incurred losses since inception, relying on working capital from the IPO and loans from sponsors to fund operations[93]. - For the three months ended September 30, 2024, the company reported a net income of $296,392, down from $794,031 in the same period of 2023, reflecting a decrease of approximately 62.7%[118]. - For the nine months ended September 30, 2024, the company had a net income of $1,659,067, compared to $2,250,037 for the same period in 2023, indicating a decline of about 26.2%[119]. - As of September 30, 2024, the company had cash of $128,169 available for working capital needs, with a working capital deficiency of $1,476,824[124]. - The company incurred cash used in operating activities of $655,112 for the nine months ended September 30, 2024[120]. - The company has significant professional costs expected to continue as a publicly traded entity, raising substantial doubt about its ability to continue as a going concern[124]. Business Combination and Compliance - The company entered into a Business Combination Agreement with Squirrel Enlivened Technology Co., Ltd on September 16, 2024, to merge and create a new entity[97]. - The Business Combination will involve the cancellation of all outstanding securities of Squirrel HoldCo in exchange for newly issued securities of the parent company[99]. - The company has until November 27, 2024, to complete its initial business combination, with the possibility of extending this deadline through monthly extensions[112]. - A total of $620,000 in Monthly Extension Fees has been deposited into the trust account to facilitate the extension of the business combination deadline[113]. - The company received a Nasdaq noncompliance letter on October 3, 2024, regarding the minimum shareholder requirement, with a deadline to submit a compliance plan by November 19, 2024[109][110]. Assets and Investments - The assets held in the Trust Account amounted to $62,103,769 as of September 30, 2024, primarily invested in mutual funds[131]. - As of September 30, 2024, the assets held in the Trust Account were primarily in mutual funds and U.S. Treasury securities, classified as trading securities[142]. Tax and Accounting - The company is considered an exempted Cayman Islands Company and is not subject to income taxes in the Cayman Islands or the United States, resulting in a de minimis tax provision for the period presented[146]. - Management does not anticipate any significant uncertain tax positions that would require recognition in the financial statements[144]. - The company has identified the Cayman Islands as its only major tax jurisdiction, with no significant uncertain tax positions expected[144][145]. - The adoption of ASU 2020-06 on January 1, 2024, did not have a material effect on the company's financial statements[147]. - The new accounting standard aims to simplify the accounting for convertible debt and equity-linked instruments, potentially impacting diluted earnings per share[147]. - The company does not believe that any recently issued accounting pronouncements will materially affect its financial statements if adopted[148]. Share Trading and Market Compliance - The company’s ordinary shares began trading on the Nasdaq Capital Market on November 14, 2024, following approval for the transfer from the Nasdaq Global Market[111]. - The fair value hierarchy is categorized into three levels: Level 1 based on unadjusted quoted prices in active markets, Level 2 based on quoted prices in active or inactive markets, and Level 3 based on unobservable inputs[140][141]. - The company has no long-term debt or off-balance sheet financing arrangements as of September 30, 2024[125][126]. - The company has the right to convert the Sponsor Notes into private units, with each unit consisting of one Ordinary Share, one warrant, and a right to receive one-tenth of an Ordinary Share upon business combination[116].