Horizon Space Acquisition I Corp. (NASDAQ:HSPO), a special purpose acquisition company, has announced an extension for completing its initial business combination. The company now has until September 27, 2024, to finalize a merger, as disclosed in its recent SEC filing.
The extension was made possible by a $60,000 deposit into the company's trust account on August 22, 2024. This deposit, referred to as the Monthly Extension Fee, was paid by Shenzhen Squirrel Enlivened Media Group Co. Ltd. ("the Target (NYSE:TGT)"), with whom Horizon Space Acquisition I Corp. signed a non-binding letter of intent on October 17, 2023, for a potential business combination.
In return for the deposit, the Target received an unsecured promissory note from Horizon Space Acquisition I Corp., dated August 26, 2024. The note does not accrue interest and is due at the earlier of the completion of the business combination or the end of the company's term. Under certain conditions, such as bankruptcy or default, the note may be accelerated.
The Target also has the option, though not the obligation, to convert the note into private units of Horizon Space Acquisition I Corp. Each unit consists of one ordinary share, one warrant, and one right to receive one-tenth of an ordinary share upon the completion of a business combination. The conversion rate for the note into units is set at a ratio based on a $10.00 per unit valuation.
In other recent news, Horizon Space Acquisition I Corp. disclosed an extension to its deadline for completing an initial business combination. The company deposited an additional $60,000 into its trust account, moving the merger deadline from June 27, 2024, to July 27, 2024.
This strategic move follows a non-binding letter of intent with Shenzhen Squirrel Enlivened Media Group Co. Ltd., which is considering a business combination with Horizon.
As part of the extension, Horizon issued an unsecured promissory note to the target company for the extension fee. The note carries no interest and is due on the earlier of the business combination's completion or the company's expiration date.
Despite these developments, Horizon Space Acquisition has not yet entered into any definitive agreements regarding a merger or business combination. These actions are part of the company's process to secure more time to finalize a potential deal.
InvestingPro Insights
As Horizon Space Acquisition I Corp. (NASDAQ:HSPO) navigates the process of completing its initial business combination, investors are closely monitoring its financial metrics and market performance. According to InvestingPro data, HSPO currently boasts a market capitalization of $87.8 million, reflecting its standing in the market. The company's P/E ratio stands at a high 73.47, suggesting that investors may have high expectations for its future earnings growth.
The InvestingPro Tips highlight that the management's aggressive share buyback strategy and the high shareholder yield are indicators of the company's commitment to returning value to its shareholders. Additionally, with the stock trading near its 52-week high and being profitable over the last twelve months, these factors may be seen as positive signs by investors. However, it's worth noting that the stock's RSI suggests it is in overbought territory, which could signal a potential price correction in the near term.
For those seeking more in-depth analysis, the InvestingPro platform offers additional tips on Horizon Space Acquisition I Corp., which can be accessed at https://www.investing.com/pro/HSPO. These insights could provide valuable context as the company works towards its goal of a successful business combination.
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