Horizon Space Acquisition I (HSPO) - 2022 Q4 - Annual Report

IPO and Financial Proceeds - 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[19]. - The 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[21]. - Following the IPO on December 27, 2022, a total of $70,207,500 was placed in a U.S.-based Trust Account[65]. - The company incurred $5,422,124 in transaction costs related to the IPO, including $1,380,000 in underwriting discounts and commissions[75]. - The company completed a private placement of 385,750 units, generating gross proceeds of $3,857,500[199]. - The proceeds from the IPO and private placement are held in a trust account, totaling $70,207,500, and will be invested in U.S. government treasury bills[202]. - The Trust Account held assets of $70,220,851, primarily in U.S. Treasury securities, classified as trading securities[85]. - The ordinary shares subject to possible redemption totaled 6,900,000 shares at a redemption value of $10.177 per share, amounting to $70,220,851[190]. Business Combination Plans - The company has until September 27, 2023, to consummate its initial business combination, with the possibility of extending this period by up to six months[40]. - If the company fails to complete the business combination, it will liquidate the Trust Account and redeem 100% of the public shares[41]. - The company intends to acquire emerging growth companies that are either cash-generative or have the potential to generate cash[31]. - The target businesses should be close to an anticipated inflection point, requiring additional management expertise or innovation[32]. - The initial business combination must involve a target business with a fair market value of at least 80% of the Trust Account balance[42]. - The company anticipates structuring its initial business combination to acquire 100% of the equity interests or assets of the target business, but may also consider acquiring less than 100% depending on various objectives[44]. - The company plans to effectuate its business combination using cash derived from the proceeds of the IPO, securities, debt, or a combination thereof[71]. - The company may need additional financing to complete its initial business combination or to meet obligations if cash on hand is insufficient[78]. - The company may extend the time to complete its initial business combination by up to six months, requiring a deposit of $690,000 for each three-month extension, totaling up to $1,380,000[149]. Financial Performance and Condition - The company has not generated any revenue since its inception and has incurred losses due to formation and operating costs[23]. - As of December 31, 2022, the company had a net loss of $123,960, consisting of formation and operating costs of $43,531 and share-based compensation expense of $93,780[74]. - The company has not generated any revenues to date and will only generate non-operating income in the form of interest income on cash and cash equivalents after the IPO[73]. - The company has significant ties to China through its CEO, who is located in China, but does not currently own or control any equity interest in any PRC company[46]. - Management has raised substantial doubt about the company's ability to continue as a going concern due to financial uncertainties[79]. - The company has no long-term debt or off-balance sheet financing arrangements as of December 31, 2022[80]. - The accumulated deficit as of December 31, 2022, was $(1,744,886), contributing to a total shareholders' deficit of $(1,744,655)[190]. - The financial statements were prepared under the assumption that the company will continue as a going concern, despite the lack of revenue[182]. Corporate Governance - The board of directors consists of four members, with a staggered election system for three-year terms[122]. - The audit committee is composed of independent directors and is responsible for overseeing financial reporting and compliance[126]. - The compensation committee, also made up of independent directors, reviews and approves the CEO's compensation and evaluates performance[129]. - The company does not have a standing nominating committee, but independent directors can recommend nominees for board selection[132]. - The Chief Executive Officer, Chief Financial Officer, and Chairman of the board is Mingyu (Michael) Li, who has extensive experience in private equity and consulting[116]. - The company has established disclosure controls and procedures to ensure timely and accurate reporting in compliance with SEC rules[105]. - The company has determined that its board of directors consists of independent directors as defined by Nasdaq listing standards[161]. Internal Controls and Compliance - The company maintained effective internal control over financial reporting as of December 31, 2022, based on management's assessment using COSO criteria[110]. - There have been no changes in internal control over financial reporting that materially affected the company from June 14, 2022, to December 31, 2022[112]. - The company has not reported any disagreements with accountants on financial disclosure[104]. - The company has not established a formal policy for the review or approval of related party transactions, which may present conflicts of interest[152][156]. - The audit committee will review all payments made to founders or their affiliates on a quarterly basis[158]. Shareholder Information - As of December 31, 2022, the company had 9,210,750 Ordinary Shares issued and outstanding, with Mingyu (Michael) Li holding 2,092,750 shares, representing 22.72% of the total[141][142]. - The company issued 1,725,000 Ordinary Shares to the Sponsor at a purchase price of $25,000, approximately $0.0145 per share[144][145]. - The company has 2 holders of record for its units and 5 holders for its separately traded Ordinary Shares as of the date of the report[58]. Audit and Professional Fees - The total audit fees billed by UHY for professional services rendered for the audit of the annual financial statements from June 14, 2022, to December 31, 2022, amounted to $96,600[163]. - The company has not incurred any audit-related fees for the period from June 14, 2022, to December 31, 2022[164]. - The company has not paid for tax planning and tax advice or other services for the period from June 14, 2022, to December 31, 2022[165][166]. - The company incurred significant professional costs to remain publicly traded and expects to continue incurring transaction costs related to business combinations[79].