10-K: Horizon Space Acquisition I Corp. Files 2025 Annual Report

Horizon Space Acquisition I Corp. (HSPO) has filed its 2025 Form 10-K, detailing its ongoing search for a business combination and its financial status, including extensions and related party loans.

Summary

• Horizon Space Acquisition I Corp. (HSPO) is a blank check company incorporated in the Cayman Islands, focused on identifying and completing a business combination.
• The company has not yet identified a target business for its initial business combination.
• HSPO has extended its deadline to complete a business combination multiple times through shareholder meetings and deposits into its trust account.
• The company's initial public offering (IPO) occurred on December 27, 2022, raising $69.0 million in public units and $3.86 million in a private placement.
• Proceeds from the IPO and private placement, totaling $70.2 million, were placed in a trust account.
• A proposed business combination with Squirrel Enlivened Technology Co., Ltd. was terminated on October 3, 2025, by mutual agreement.
• The company has experienced significant redemptions of public shares during extension periods, totaling $5.93 million in September 2023, $8.86 million in March 2024, $41.73 million in December 2024, and $22.0 million in October 2025.
• HSPO voluntarily delisted its securities from the Nasdaq Capital Market on December 12, 2025, and began trading on over-the-counter markets.
• The company has relied on loans from its Sponsor and affiliates for working capital and extension fees.
• As of December 31, 2025, HSPO had $35,894 in cash outside the trust account and a working capital deficiency of $3,630,378, raising substantial doubt about its ability to continue as a going concern.
• The company's auditor is TAAD LLP, appointed in January 2026, succeeding UHY LLP.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing negatively due to the ongoing lack of a business combination, significant depletion of trust funds through redemptions, a working capital deficiency, and the company's status as a going concern, all of which point to a high probability of liquidation.

Positives

• The company has successfully extended its deadline to complete a business combination multiple times, indicating flexibility and continued efforts to find a suitable target.
• The trust account holds $1,179,991 as of December 31, 2025, providing a financial cushion.
• Management has concluded that disclosure controls and procedures were effective as of December 31, 2025.
• The company has a clear plan to address going concern uncertainties through working capital loans from its Sponsor and affiliates.

Negatives

• The company has not yet identified or completed a business combination, nearing its extended deadline of April 27, 2026.
• Significant redemptions by public shareholders have depleted the trust account.
• HSPO has a working capital deficiency of $3,630,378 as of December 31, 2025.
• Substantial doubt exists regarding the company's ability to continue as a going concern.
• The company voluntarily delisted from Nasdaq and now trades on OTC markets, which may reduce liquidity and investor interest.
• The termination of the business combination agreement with Squirrel Enlivened Technology Co., Ltd. represents a setback in the search for a target.

Risks

• Failure to consummate a business combination by the extended deadline of April 27, 2026, will result in the liquidation of the company and the warrants expiring worthless.
• Creditors' claims may take priority over public shareholders' claims in the event of liquidation.
• The company may not be able to secure additional financing if needed to complete a business combination or meet obligations.
• The voluntary delisting from Nasdaq and trading on OTC markets could negatively impact share price and liquidity.
• The company's management has identified material weaknesses in internal controls over financial reporting, including insufficient segregation of duties, lack of effective management review controls over third-party consultants, and deficiencies in period-end close procedures.

Future Outlook

The company's primary focus remains on consummating a business combination before its extended deadline of April 27, 2026. Failure to do so will result in liquidation. The company has taken steps to extend its operational runway through various shareholder approvals and sponsor contributions, but the ongoing uncertainty about completing a business combination poses a significant risk.

Management Comments

• Management has concluded that disclosure controls and procedures were effective as of December 31, 2025.
• Management has determined that conditions raise substantial doubt about the company's ability to continue as a going concern.
• Management intends to implement remediation steps to improve internal controls over financial reporting.

Industry Context

StockSavvy.ai notes that Horizon Space Acquisition I Corp. operates within the Special Purpose Acquisition Company (SPAC) sector, which has seen increased regulatory scrutiny and market volatility. The company's struggle to find and complete a business combination by its deadline, coupled with significant shareholder redemptions and a delisting from Nasdaq, reflects broader challenges faced by some SPACs in the current market environment.

Comparison to Industry Standards

• Many SPACs aim to complete a business combination within 18-24 months of their IPO. HSPO has extended its deadline multiple times, now reaching April 27, 2026, which is significantly beyond the typical timeframe.
• Industry standard for SPACs is to maintain a certain level of funds in trust to cover potential redemptions and operational costs. HSPO's trust account balance has been significantly reduced due to redemptions.
• The delisting from Nasdaq and move to OTC markets is less common for SPACs that have successfully completed a business combination, but can occur for SPACs that are nearing liquidation or have not yet found a target.

Corporate Governance

Legal Proceedings

• The company is not currently a party to any material litigation or other legal proceedings and is not aware of any legal proceeding, investigation or claim that has a more than remote possibility of having a material adverse effect on its business, financial condition or results of operations.

Related Party Transactions

• Working Capital Loans: The Sponsor and/or its affiliates have provided working capital loans totaling $1,800,000 as of December 31, 2025, evidenced by promissory notes. These loans are interest-free and payable upon the consummation of a business combination or the Maturity Date. Up to $3,000,000 of these loans may be convertible into private units.
• Extension Loans: The Sponsor and/or affiliates (Shenzhen Squirrel or Squirrel HK) have provided funds for monthly extension fees, totaling $2,160,000 as of December 31, 2025, evidenced by promissory notes. These are also interest-free and payable upon business combination or Maturity Date. Some of these notes have conversion features into 'Extension Units'.
• Founder Shares: The Sponsor initially acquired Founder Shares, with a portion transferred to independent directors. These shares are subject to lock-up and forfeiture conditions tied to the completion of a business combination.
• Deferred Underwriting Commission: The underwriter, Network 1 Financial Securities, Inc., has agreed to convert its deferred underwriting commission of $2,415,000 into 805,000 Ordinary Shares at $3.00 per share prior to the consummation of a business combination.

Stakeholder Impact

• Shareholders: Public shareholders face the risk of losing their investment if a business combination is not completed by the deadline, leading to liquidation. Their investment value is directly tied to the company's ability to find and close a deal.
• Sponsor and Affiliates: The Sponsor and its affiliates have provided significant loans and extension fees, which are subject to repayment or conversion into equity. Their investment is also at risk if no business combination occurs.
• Creditors: In the event of liquidation, creditors have priority over public shareholders for repayment of any outstanding debts.
• Underwriters: The underwriter's deferred commission is contingent on the completion of a business combination and will be converted into shares at a specified price.

Next Steps

• Continue efforts to identify and consummate a business combination before the April 27, 2026 deadline.
• If a business combination is not consummated by the deadline, the company will liquidate and dissolve.
• Implement remediation steps to address material weaknesses in internal controls over financial reporting.

Key Dates

Recommendation

The company is in a precarious position, nearing its deadline without a completed business combination and facing potential liquidation. While the trust account provides some capital, significant redemptions and a working capital deficiency create substantial going concern doubt. The delisting from Nasdaq further reduces liquidity. A 'hold' recommendation reflects the high uncertainty and risk, with the potential for a complete loss of investment if no business combination is achieved, but also the possibility of a recovery if a suitable target is found and the transaction closes before the deadline.

Keywords

SPAC, Horizon Space Acquisition I Corp, Form 10-K, Annual Report, Business Combination, Trust Account, Shareholder Redemptions, Going Concern, Delisting, OTC Market, Cayman Islands, SEC Filing