Spark I Acquisition Corporation(SPKLU) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION This section details the company's financial performance and position for the reporting period Financial Statements The company's financial statements for Q1 2025 show decreased net income, increased assets and liabilities, and a widening shareholders' deficit, raising going concern doubts Condensed Balance Sheets Total assets increased to $108.6 million by March 31, 2025, while total liabilities rose to $5.55 million, primarily due to a new convertible note, widening the shareholders' deficit to $4.95 million Condensed Balance Sheet Data (unaudited) | Account | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Total Assets | 108,649,720 | 107,405,986 | | Mutual funds held in trust | 108,045,865 | 106,926,172 | | Cash | 487,194 | 375,403 | | Total Liabilities | 5,550,123 | 4,848,718 | | Convertible note payable - Sponsor | 1,440,000 | 0 | | Deferred underwriting fee payable | 3,500,000 | 3,500,000 | | Total Shareholders' Deficit | (4,946,268) | (4,368,904) | Condensed Statements of Operations Net income for Q1 2025 decreased to $542,329 from $770,378 in Q1 2024, primarily due to lower interest income from Trust Account investments, despite being offset by operating expenses Quarterly Operating Results (unaudited) | Metric | Q1 2025 ($) | Q1 2024 ($) | | :--- | :--- | :--- | | Total Expenses | 577,365 | 555,932 | | Interest earned on investments held in Trust Account | 1,119,693 | 1,326,309 | | Net Income | 542,329 | 770,378 | | Basic and diluted net income per Class A/B share ($/share) | 0.03 | 0.05 | Condensed Statements of Cash Flows Net cash used in operating activities totaled $488,209 in Q1 2025, largely offset by $600,000 from financing activities, resulting in a net cash increase of $111,791 and an end-of-period balance of $487,194 Cash Flow Summary (unaudited) | Cash Flow Activity | For the Three Months Ended March 31, 2025 ($) | | :--- | :--- | | Net Cash Used In Operating Activities | (488,209) | | Net Cash Provided By Financing Activities | 600,000 | | Net change in cash | 111,791 | | Cash at end of period | 487,194 | Notes to Financial Statements These notes disclose the company's SPAC status, its July 2025 business combination deadline raising going concern doubts, and details on redeemable shares, related-party loans, and significant commitments like a $3.5 million deferred underwriting fee - The company operates as a blank check company, with all activities focused on its formation, IPO, and the search for a business combination target[16][17] - Management has identified substantial doubt about the company's ability to continue as a going concern due to its liquidity and the July 11, 2025, business combination deadline[30] - An unsecured promissory note for up to $1.9 million was issued to the Sponsor on January 28, 2025, with $1.44 million outstanding as of March 31, 2025, including a $600,000 loan and conversion of a prior $840,000 advance[68][7] - A $3.5 million deferred underwriting fee is committed to underwriters, payable from the Trust Account upon business combination completion[72] Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's ongoing search for a business combination, its Q1 2025 net income derived solely from Trust Account interest, its working capital deficit, and the substantial doubt regarding its ability to continue as a going concern - The company is actively negotiating a binding business combination agreement with Kneron Holding Corporation, an edge AI solutions provider[101] Quarterly Income Comparison | Period | Net Income ($) | Primary Source | | :--- | :--- | :--- | | Q1 2025 | 542,329 | Interest earned on Trust Account (1,119,693) | | Q1 2024 | 770,378 | Interest earned on Trust Account (1,326,309) | - As of March 31, 2025, the company held $487,194 in cash and reported a working capital deficit of $1,446,268[111][28] - Management concluded that the July 11, 2025, business combination deadline and current liquidity conditions raise substantial doubt about the company's ability to continue as a going concern[114] Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company under Rule 12b-2 of the Exchange Act, the company is not required to provide this information[123] Controls and Procedures Management assessed disclosure controls and procedures as effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Disclosure controls and procedures were concluded to be effective by principal officers as of March 31, 2025[125] - No material changes occurred in internal control over financial reporting during Q1 2025[126] PART II - OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal matters, risk factors, and other disclosures Legal Proceedings The company reports no legal proceedings - The company reports no legal proceedings[128] Risk Factors No material changes to risk factors previously disclosed in the Annual Report on Form 10-K for FY2024 have occurred - No material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024, have occurred as of this report's date[129] Unregistered Sales of Equity Securities and Use of Proceeds No material change has occurred in the planned use of Initial Public Offering proceeds as described in the final prospectus - No material change in the planned use of Initial Public Offering proceeds from the final prospectus has occurred[130] Other Information No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the last fiscal quarter - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the last fiscal quarter[133] Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including key agreements and officer certifications