Horizon Space Acquisition I Corp. Releases 2025 Annual Report: Critical Updates for Investors

Key Highlights:

• Company Structure: Horizon Space Acquisition I Corp. (“HSPO”) is a blank check company (SPAC) incorporated in the Cayman Islands, focused on effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, or reorganization with one or more businesses.
• Business Objective: As of the report date, HSPO has not identified or entered into any definitive agreement with a target business, nor generated operating revenues. The company’s activities remain centered on identifying a suitable target for a business combination.
• Multiple Shareholder Meetings and Extension Votes: Since its IPO, HSPO has held four shareholder meetings to extend the deadline for completing a business combination, each time redeeming public shares and releasing significant funds from its trust account to redeeming shareholders.
• Significant Redemptions:
  • March 2024 Meeting: \$8.86 million released from Trust Account to redeem 815,581 shares.
  • December 2024 Meeting: Extended deadline to December 27, 2024, with up to 12 possible monthly extensions.
  • October 2025 Meeting: Extended deadline to October 27, 2025, with up to 6 monthly extensions to April 27, 2026. Importantly, 1,764,505 shares were redeemed and ~\$22 million released from the Trust Account.
• Change in Articles of Association: The company now allows redemptions that could reduce net tangible assets below \$5,000,001, increasing flexibility but also risk for remaining shareholders.
• Financial Results:
  • 2025 Net Income: \$203,618 (Interest/Dividend Income: \$779,992; Operating Costs: \$576,374)
  • 2024 Net Income: \$2,112,351 (Interest/Dividend Income: \$3,171,545; Operating Costs: \$1,059,194)
  • Company has not generated operating revenues and relies on interest from trust assets and loans from the sponsor or related parties for working capital.
• Liquidity and Capital Resources: The company may need to obtain additional financing (potentially through loans, equity, or debt) to complete a business combination or redeem shares. Additional securities may be issued or debt incurred.
• Market Information: HSPO’s securities are quoted on the OTC Markets under the symbols HSPOF (Ordinary Shares), HSPRF (Rights), HSPWF (Warrants), and HSPUF (Public Units).
• Major Shareholders: As of the report date, the sponsor—controlled by Mr. Mingyu (Michael) Li—holds approximately 87.04% of issued and outstanding shares. All officers and directors as a group own 87.79% of outstanding shares.
• Material Weaknesses in Internal Control: The company identified material weaknesses in internal controls, including lack of segregation of duties, insufficient oversight of third-party consultants, and deficiencies in period-end close procedures. Management is implementing remediation steps (e.g., hiring a dedicated CFO, improving review procedures, and enhancing the close process).
• Change of Auditor: On January 22, 2026, HSPO dismissed UHY LLP and appointed TAAD LLP as the new independent registered public accounting firm.
• Regulatory and Geopolitical Risks:
  • HSPO may be restricted by evolving US foreign investment regulations (e.g., CFIUS review) or the Holding Foreign Companies Accountable Act (HFCAA), especially if a merger target is based in China or subject to Public Company Accounting Oversight Board (PCAOB) restrictions.
  • HSPO’s sponsor is not a US person, which may trigger CFIUS review if the company seeks to acquire certain US businesses in critical technology sectors.
• Cybersecurity: As a SPAC with no operating business, HSPO has not had any material cybersecurity incidents since inception.
• Potential Price-Sensitive Issues:
  • Large redemptions have reduced the trust assets and public float, potentially increasing volatility in the share price.
  • The ability to redeem below the \$5 million net tangible asset threshold increases risk for remaining shareholders, especially if a business combination is not completed or the trust is depleted.
  • Further extensions or failure to consummate a business combination could result in further redemptions or liquidation, which would affect share value.

Detailed Summary and Investor Considerations

HSPO continues to operate as a blank check company, with its future entirely dependent on the successful identification and completion of a merger or acquisition. The numerous extensions to the deadline—each accompanied by material redemption of public shares and the corresponding depletion of the trust account—have left the sponsor in near-total control of the outstanding shares. This concentration of ownership may reduce liquidity and increase volatility for remaining public shareholders.

The company’s willingness to allow redemptions even if net tangible assets fall below \$5 million is a significant departure from standard SPAC practice and increases risks for remaining investors. Should the trust account be largely depleted, remaining shareholders may have limited downside protection if no business combination occurs.

The company’s financials show no operating revenue, reliance on interest income, and ongoing dependence on loans from the sponsor and related parties. While the company remains in compliance with its reporting obligations and has not experienced cybersecurity issues, the lack of operating business and ongoing extensions highlight the speculative nature of HSPO as an investment vehicle.

Investors should also be aware of the heightened regulatory risks associated with potential mergers involving foreign targets, especially in China or critical US technology sectors. Regulatory intervention (such as under CFIUS or HFCAA) could prevent the completion of a business combination or result in delisting, directly impacting share value.

The company has also disclosed material weaknesses in its internal controls over financial reporting. Although management has outlined remediation efforts, the ongoing risk of control failures or financial misstatements remains until these are fully addressed.

What Investors Should Watch For

• Progress toward a business combination: Any announcement of a definitive agreement would be price-sensitive.
• Further extensions or trust redemptions: Additional depletion of the trust account may materially impact the value of remaining shares.
• Changes in regulatory environment: CFIUS or HFCAA enforcement could block transactions or result in delisting.
• Resolution of internal control weaknesses: Failure to remediate could result in restatements or other compliance issues.

Disclaimer

This summary is for informational purposes only and does not constitute investment advice. Investors should review the full annual report and consult with their own financial advisors prior to making any investment decisions. This article is based on information available as of the date of the report and may not reflect subsequent developments.

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