Horizon Space Acquisition I Corp. (NASDAQ:HSPO), a special purpose acquisition company, has announced an extension to complete its initial business combination. This development comes as the company deposited an additional $60,000 into its trust account, enabling a one-month extension from October 27, 2024, to November 27, 2024. The payment was made by Shenzhen Squirrel Enlivened Media Group Co. Ltd in connection with their proposed business combination.
The extension, disclosed in a recent SEC filing, was facilitated by an unsecured promissory note issued to Shenzhen Squirrel dated October 24, 2024. This note, which carries no interest, is payable upon the earlier of the completion of the business combination or the expiry of the company's term. The default on this note could be triggered by a failure to pay within five business days of the maturity date, bankruptcy actions, breach of obligations, cross defaults, enforcement proceedings against the company, or any unlawfulness in connection with the obligations.
Horizon Space's decision to extend the merger deadline is part of the amended and restated memorandum and articles of association, which allows for an extension to consummate a business combination until December 27, 2024. Each extension requires a deposit of $60,000 by the company's sponsor or its designee into the trust account.
The proposed business combination with Shenzhen Squirrel was initially announced on September 16, 2024, and is part of Horizon Space's strategic growth plan. This move is set to provide Horizon Space with additional time to finalize the merger plans and fulfill the conditions necessary for the combination.
In other recent news, Horizon Space Acquisition I Corp. has been actively managing its financial and operational strategies. The company issued an unsecured promissory note of $400,000 to its sponsor, Horizon Space Acquisition I Sponsor Corp., to support its operations until the completion of its initial business combination. The note, which carries no interest, is set to mature upon the completion of the business combination or at the end of the company's term.
In the face of potential delisting from the Nasdaq Global Market due to non-compliance with the minimum shareholder requirement, Horizon Space Acquisition I Corp. has applied to transfer its listing to the Nasdaq Capital Market, which has less stringent requirements. This move is part of the company's efforts to regain compliance.
Moreover, Horizon Space Acquisition I Corp. has extended its merger deadline with Shenzhen Squirrel Enlivened Media Group Co. Ltd to October 27, 2024. This extension was facilitated by multiple deposits of $60,000 into the company's trust account by Shenzhen Squirrel. For each extension payment, Horizon issued unsecured promissory notes to Shenzhen Squirrel for the same amount, which carry no interest and are set to be paid in full either when the business combination is completed or by the end of the company's term.
These are recent developments, indicating that Horizon Space Acquisition I Corp. is taking steps to navigate its financial requirements and address compliance issues while pursuing its initial business combination.
InvestingPro Insights
As Horizon Space Acquisition I Corp. (NASDAQ:HSPO) navigates its extension period for completing its initial business combination, InvestingPro data provides additional context for investors. The company's market capitalization stands at $88.11 million, reflecting its current valuation as a special purpose acquisition company (SPAC).
InvestingPro Tips highlight that HSPO is trading near its 52-week high, with the stock price at 92.62% of its highest point over the past year. This could indicate investor optimism about the potential business combination with Shenzhen Squirrel Enlivened Media Group Co. Ltd. Additionally, the company has been profitable over the last twelve months, with a basic EPS from continuing operations of $0.33.
It's worth noting that HSPO's P/E ratio (adjusted) for the last twelve months as of Q2 2024 is 31.3, suggesting that investors are pricing in future growth expectations, possibly tied to the success of the proposed merger. The company's return on assets stands at 4.22%, indicating some efficiency in utilizing its assets to generate profits.
For investors seeking a more comprehensive analysis, InvestingPro offers 9 additional tips for HSPO, providing a deeper understanding of the company's financial health and market position as it approaches its business combination deadline.
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