8-K: Horizon Space Delists from Nasdaq, Moves to OTC

Horizon Space Acquisition I Corp. announced its voluntary delisting from Nasdaq, effective December 12, 2025, due to failure to secure a business combination and meet listing standards, with trading to commence on OTC Markets.

Summary

• Horizon Space Acquisition I Corp. (HSPO) is voluntarily delisting its ordinary shares, units, warrants, and rights from the Nasdaq Capital Market.
• Trading on Nasdaq will be suspended prior to market open on December 12, 2025, with securities commencing trading on the over-the-counter (OTC) markets operated by OTC Markets Group Inc. on the same day.
• Ordinary shares, rights, and warrants will be quoted on OTCQB, and units on OTCID, with new ticker symbols to be assigned upon transition.
• The decision stems from the company's inability to complete a business combination by Nasdaq's 36-month deadline of December 21, 2025, despite extending its charter deadline to April 27, 2026.
• The previous business combination agreement with Squirrel Enlivened Technology Co., Ltd was mutually terminated on October 3, 2025.
• The company failed to meet several Nasdaq continued listing standards, including minimum market value of listed securities ($35,000,000), minimum public holders (300), minimum publicly held shares (500,000), and minimum market value of publicly held securities ($1,000,000).
• The Board of Directors unanimously determined that delisting is in the company's best interest due to the likely inability to regain compliance and associated costs.
• Shareholders' ownership interests or rights will not be affected by the delisting, and no action is required from them.
• The company plans to continue filing periodic reports with the SEC while its securities are quoted on OTC.

Sentiment

Score: 2

Explanation: The voluntary delisting from Nasdaq, failure to complete a business combination, and inability to meet listing standards are significant negative events. While management expresses commitment to finding a new target, the move to OTC markets and the underlying issues indicate a very challenging outlook for shareholders.

Positives

• Management and sponsor remain committed to completing a business combination and are actively searching for a suitable alternative target.
• Voluntary delisting and transition to OTC will not affect shareholders' ownership interests or rights.
• The company plans to continue filing periodic reports with the SEC, maintaining some level of transparency.

Negatives

• Voluntary delisting from Nasdaq Capital Market, a major exchange, to the less liquid OTC markets.
• Failure to complete a business combination within Nasdaq's 36-month deadline (December 21, 2025).
• Mutual termination of the business combination agreement with Squirrel Enlivened Technology Co., Ltd on October 3, 2025.
• Failure to meet Nasdaq continued listing standards, including market value of listed securities below the minimum $35,000,000.
• Fewer than 300 public holders for its securities, falling below Nasdaq's minimum requirement.
• Fewer than 500,000 publicly held shares, falling below Nasdaq's minimum requirement.
• Market value of publicly held securities below $1,000,000, falling below Nasdaq's minimum requirement.
• Significant redemptions following the extraordinary general meeting on October 27, 2025, reducing public shares to 93,484.
• The company expects it will not be able to complete its initial business combination by December 21, 2025.

Risks

• Inability to complete an initial business combination by December 21, 2025, leading to potential liquidation.
• Failure to secure a suitable alternative business combination target.
• Reduced liquidity and investor interest due to trading on the OTC markets compared to Nasdaq.
• Uncertainty regarding the timing and process for delisting from Nasdaq and listing on the OTC Markets.
• General business, economic, and competitive uncertainties and contingencies that could cause actual results to differ from forward-looking statements.

Future Outlook

Management and the sponsor remain committed to completing a business combination and are actively searching for a suitable alternative target. However, it is reasonably expected that the company will not be able to complete its initial business combination by the Nasdaq 36-month deadline of December 21, 2025. The company plans to continue filing periodic reports with the SEC while its securities are quoted on the OTC Markets.

Management Comments

• "The management and sponsor remain committed in completing a business combination and are actively searching for a suitable alternative target."
• "It is reasonably expected that the Company could not be able to complete its initial business combination by December 21, 2025."

Industry Context

This delisting highlights the challenges faced by many Special Purpose Acquisition Companies (SPACs) in the current market environment. With increased scrutiny and a more competitive landscape, many SPACs struggle to identify and complete suitable business combinations within their mandated timelines. The failure to meet Nasdaq's listing standards, particularly regarding market value and public float, is a common outcome for SPACs that experience significant redemptions and fail to secure a de-SPAC transaction. The move to OTC Markets typically results in reduced liquidity and investor visibility, reflecting a common trajectory for SPACs that do not successfully merge.

Comparison to Industry Standards

• The company's failure to complete a business combination by the 36-month deadline (December 21, 2025) is a critical deviation from the standard SPAC lifecycle, which typically aims for a merger within 18-24 months, though 36 months is the maximum for Nasdaq.
• The inability to meet Nasdaq's continued listing standards, such as the $35 million market value of listed securities, 300 public holders, 500,000 publicly held shares, and $1 million market value of publicly held securities, indicates a significant decline in investor interest and market capitalization, far below what is expected for a healthy publicly traded entity on a major exchange.
• The low number of public shares (93,484) after redemptions is significantly below the 500,000 minimum for Nasdaq, indicating a substantial loss of public float, which is a common issue for SPACs facing high redemption rates when a deal is announced or terminated.
• Compared to successful SPACs like DraftKings (DEAC/DKNG) or Lucid Motors (CCIV/LCID) which completed large mergers, Horizon Space Acquisition I Corp. represents the segment of SPACs that fail to execute their primary objective, leading to delisting and often eventual liquidation or a significantly diminished market presence.

Stakeholder Impact

• Shareholders: Ownership interests and rights will not be affected by the delisting itself, but the move to OTC markets typically results in reduced liquidity and potentially lower valuations. They face uncertainty regarding the completion of a business combination.
• Management/Sponsor: Remain committed to finding a business combination, indicating continued effort and potential for future value creation, but also facing pressure to deliver.
• Regulatory Authorities (SEC): The company will continue to file periodic reports, maintaining some level of oversight.

Next Steps

• Securities will be suspended from trading on Nasdaq prior to market open on December 12, 2025.
• Securities will commence trading on the OTC Markets Group Inc. on December 12, 2025.
• The company will file a Form 25 with the SEC on December 12, 2025.
• New ticker symbols will be assigned upon OTC transition.
• The company plans to continue filing periodic reports with the SEC.
• Management and sponsor will continue actively searching for a suitable alternative business combination target.

Key Dates

Recommendation

The voluntary delisting from Nasdaq to the OTC markets, coupled with the failure to secure a business combination and meet fundamental listing requirements, signals severe operational and financial distress. The significant redemptions and low public float further diminish the company's viability as a publicly traded entity. While management expresses commitment to finding a new target, the move to a less liquid market and the inherent challenges of a SPAC past its prime make the investment highly speculative with substantial downside risk. A seasoned investor would likely recommend selling to avoid further capital erosion and seek opportunities in more stable or promising ventures.

Keywords

SPAC, Delisting, Nasdaq, OTC Markets, Business Combination, Horizon Space Acquisition I Corp., HSPO, Special Purpose Acquisition Company, Redemptions, Listing Standards