美國

證券和交易委員會

華盛頓特區 20549

表格 10-Q 

截至季度結束日期的財務報告2024年9月30日

第過渡期

委託文件號碼：001-41578

1412 Broadway, 21樓, Suite 21V

紐約, 紐約 10018

(主要行政辦公室地址)

(646) 257-5537

(註冊人電話號碼，包括區號)

在法案第12(b)條的規定下注冊的證券：

Indicate by check mark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (clso§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒   No ☐

As of the date hereof, there were 7,832,390 ordinary shares of the Company, par value $0.0001 per share, issued and outstanding.

HORIZON SPACE ACQUISITION I CORP.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

HORIZON SPACE ACQUISITION I CORP

BALANCE SHEETS

The accompanying notes are an integral part of these unaudited condensed financial statements.

HORIZON SPACE ACQUISITION I CORP

STATEMENTS OF OPERATIONS

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed financial statements.

HORIZON SPACE ACQUISITION I CORP

 STATEMENTS OF CHANGES IN SHAREHOLDERS'  DEFICIT

The accompanying notes are an integral part of these unaudited condensed financial statements.

HORIZON SPACE ACQUISITION I CORP

 STATEMENTS OF CASH FLOWS

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed financial statements.

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Horizon Space Acquisition I Corp.

Notes To Financial Statements

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings. References to the “Company,” “HSPO,” “us,” “our,” or “we” refer to Horizon Space Acquisition I Corp. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes herein.

Overview

We are a blank check company formed under the laws of Cayman Island on June 14, 2022, for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more businesses. We intend to effectuate our business combination using cash derived from the proceeds of the initial public offering (the “IPO”), our securities, debt or a combination of cash, securities and debt, in effecting a business combination. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic location.

We presently have no revenue, have had losses since inception from incurring formation and operating costs and have had no operations other than identifying and evaluating suitable acquisition transaction candidates. We have relied upon the working capital available to us following the consummation of the IPO and the Private Placement (as defined below) to fund our operations, as well as the funds loaned by the Sponsor (as defined below), our officers, directors or their affiliates. We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.

On December 27, 2022, we consummated the IPO of 6,900,000 units (including 900,000 units issued upon the full exercise of the over-allotment option, the “Public Units”). Each Public Unit consists of one ordinary share, $0.0001 par value per share (the “Ordinary Shares”), one redeemable warrant (the “Warrant”), each Warrant entitling the holder thereof to purchase one Ordinary Share at an exercise price of $11.50 per share, and one right (the “Right”), each one Right entitling the holder thereof to exchange for one-tenth of one Ordinary Share upon the completion of our initial business combination. The Public Units were sold at an offering price of $10.00 per Public Unit, generating gross proceeds of $69,000,000.

On December 27, 2022, substantially concurrently with the closing of the IPO, we completed the private sale (the “Private Placement”) of 385,750 units (the “Private Units”) to the Company’s sponsor, Horizon Space Acquisition I Sponsor Corp. (the “Sponsor”), at a purchase price of $10.00 per Private Placement Unit, generating gross proceeds to the Company of $3,857,500.

The proceeds of $70,207,500 ($10.175 per Public Unit) in the aggregate from the IPO and the Private Placement, were placed in a trust account (the “Trust Account”) established for the benefit of the Company’s public shareholders and the underwriters of the IPO with Continental Stock Transfer & Trust Company acting as trustee.

Commencing on or about January 26, 2023, the holders of the Public Units may select to separately trade the Ordinary Shares, Warrants, and Rights included in the Public Units. The Ordinary Shares, Warrants, and Rights were traded on the Nasdaq Global Market under the symbols “HSPO,” “HSPOW,” and “HSPOR”, respectively. Public Units not separated will continue to trade on Nasdaq under the symbol “HSPOU.”

Recent Developments

Proposed Business Combination

Business Combination Agreement

On September 16, 2024, HSPO entered into an Agreement and Plan of Merger (the “Business Combination Agreement”) with Squirrel Enlivened Technology Co., Ltd, a Cayman Islands exempted company (“Squirrel HoldCo”), Squirrel Enlivened International Co., Ltd, a Cayman Islands exempted company and a wholly-owned subsidiary of Squirrel HoldCo (“Squirrel Cayman” or, upon and following the Reorganization, “Parent”), Squirrel Enlivened Overseas Co., Ltd, a Cayman Islands exempted company and a wholly-owned subsidiary of Squirrel Cayman (“Merger Sub”).

Squirrel HoldCo, through Shenzhen Squirrel Enlivened Media Group Co., Ltd, a limited liability company established under the laws of China (“Shenzhen Squirrel”), and Squirrel HoldCo’s other subsidiaries, is in the business of brand marketing and strategy consulting.

Pursuant to the Business Combination Agreement, among other things, (a) Squirrel HoldCo will merge with and into Squirrel Cayman in accordance with the Companies Act (As Revised) of the Cayman Islands (the “Cayman Companies Act”), whereupon the separate existence of Squirrel HoldCo will cease, and Squirrel Cayman will be the surviving company (the “Reorganization”), and (b) at least one (1) business day after the closing of the Reorganization (the “Reorganization Closing”), Merger Sub will merge with and into HSPO in accordance with the Cayman Companies Act, whereupon the separate existence of Merger Sub will cease, and HSPO will be the surviving company (the “Merger”). As a result of the Reorganization and the Merger, among other things, (a) all of the issued and outstanding securities of Squirrel HoldCo immediately prior to the filing of the plan of merger with respect to the Reorganization (the “Plan of Reorganization”) to the Registrar of Companies of the Cayman Islands, or such later time as may be specified in the Plan of Reorganization (the “Reorganization Effective Time”) shall no longer be outstanding and shall automatically be cancelled, in exchange for the right of the holders thereof to receive a certain number of securities of Squirrel Cayman as described below, and (b) all of the issued and outstanding securities of HSPO immediately prior to the filing of the plan of merger with respect to the Merger (the “Plan of Merger”) to the Registrar of Companies of the Cayman Islands, or such later time as may be specified in the Plan of Merger (the “Merger Effective Time”) shall no longer be outstanding and shall automatically be cancelled, in exchange for the right of the holders thereof to receive substantially equivalent securities of Parent, in each case, upon the terms and subject to the conditions set forth in the Business Combination Agreement and in accordance with the provisions of the Cayman Companies Act and other applicable laws. The Reorganization, the Merger and each of the other transactions contemplated by the Business Combination Agreement or any of the other relevant transactional documents are collectively referred to as the “Business Combination.”

Pursuant to the Business Combination Agreement, each ordinary share of Squirrel HoldCo, par value $0.0001 per share (the “Squirrel HoldCo Ordinary Shares”) issued and outstanding immediately prior to the Reorganization Effective Time, subject to certain exceptions, shall be cancelled and automatically converted into the right to receive, without interest, such number of the newly issued shares of the ordinary shares of Parent, par value $0.0001 per share (the “Parent Ordinary Shares”) that is equal to a ratio, being equal to a fraction: (A) the numerator of which is $200,000,000 divided by $10.00 per share , and (B) the denominator of which is the total number of Squirrel HoldCo Ordinary Shares issued and outstanding immediately prior to the Reorganization Effective Time.

Related Agreements

Sponsor Support Agreement

In connection with the execution of the Business Combination Agreement, on September 16, 2024, Horizon Space Acquisition I Sponsor Corp., the sponsor of HSPO (the “Sponsor”) entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”) with HSPO, Squirrel HoldCo and Squirrel Cayman, pursuant to which the Sponsor agreed to, among other things, (i) to vote all the ordinary shares (including those underlying the private units) of HSPO (the “HSPO Ordinary Shares”) it holds in favor of each of the shareholder proposals in connection with the Business Combination, (ii) waive its redemption rights with respects to the HSPO Ordinary Shares it held as of the date of the Sponsor Support Agreement (the “Sponsor Subject Shares”), and (iii) not to transfer any Sponsor Subject Shares it holds prior to the earlier of the termination of the Business Combination Agreement or the consummation of the Business Combination subject to certain exceptions. The Sponsor has further agreed to enter into the Lock-Up Agreement with Parent immediately prior to the Merger Effective Time.

Shareholder Support Agreement

In connection with the execution of the Business Combination Agreement, on September 16, 2024, HSPO, Squirrel Cayman, Squirrel HoldCo, and Squirrel Enlivened Holdings Co., Ltd, a company limited by shares incorporated under the laws of the British Virgin Islands and the controlling shareholder of Squirrel HoldCo (“Squirrel Holdings BVI”), entered into a Shareholder Support Agreement (the “Shareholder Support Agreement”), pursuant to which Squirrel Holdings BVI agreed to, among other things, (i) not to transfer any Squirrel HoldCo Ordinary Shares before the Reorganization Closing, or the newly issued Parent Ordinary Shares upon the conversion of such Squirrel HoldCo Ordinary Shares that Squirrel Holdings BVI will receive in connection with the Reorganization after the Reorganization Closing (collectively, the “Shareholder Subject Shares”) until the Merger Closing without the written consent of other parties thereto subject to certain exceptions, (ii) to vote all the Shareholder Subject Shares in favor of proposals in connection with the Business Combination, and (iii) to vote all the Shareholder Subject Shares against the proposals in connection with other alternative business combinations other than the Business Combination with HSPO.

Form of Shareholder Lock-up Agreement

Prior to the Merger Effective Time, Parent, the Sponsor and Squirrel Holdings BVI will enter into a lock-up agreement (the “Shareholder Lock-Up Agreement”), pursuant to which each of the Sponsor and Squirrel Holdings BVI will agree not to, among other things, transfer any Lock-up Shares (as defined below) during the Lock-up Period (as defined below).

The “Lock-up Shares” means, with respect to Squirrel Holdings BVI, Parent Ordinary Share Squirrel Holdings BVI holds immediately after the Merger Closing, and with respect to the Sponsor, Parent Ordinary Share issuable to the Sponsor and/or its assignees in exchange of the Insider Shares (as defined in the Shareholder Lock-up Agreement) upon the Merger Closing.

The “Lock-up Period” means with respect to 50% of the Lock-up Shares, the period commencing on the date of Merger Closing (the “Closing Date”) and ending on the date that is the earlier to occur of (A) six months after the Closing Date, or (B) the date on which the closing price of each Parent Ordinary Share equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after the Closing Date, and with respect to the remaining 50% of the Lock-up Shares the period commencing on the Closing Date and ending on the date that is six months after the Closing Date.

Form of Registration Rights Agreement

The Business Combination Agreement contemplates that, prior to the Merger Effective Time, Parent, the Sponsor, and certain other parties thereto will enter into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which Parent will grant certain registration rights with respect to Parent securities held by such holders following the Merger Closing.

Form of Warrant Assumption Agreement

The Business Combination Agreement contemplates that, immediately prior to or upon the Merger Effective Time, Parent, HSPO and Continental Stock Transfer & Trust Company, LLC (the “Warrant Agent”) will enter into an assignment, assumption and amended & restated warrant agreement (the “Warrant Assumption Agreement”), which amends that certain Warrant Agreement, dated as of December 21, 2022, by and between HSPO and the Warrant Agent (as the same may be amended, restated or supplemented, the “Existing Warrant Agreement”), pursuant to which (a) HSPO will assign to Parent, and Parent will assume, all of HSPO’s right, title and interest in and to the Existing Warrant Agreement, and (b) each whole HSPO warrant shall be modified to no longer entitle the holder to purchase HSPO Ordinary Shares and instead acquire an equal number of Parent Ordinary Shares per HSPO warrant, subject to adjustment as described therein.

Nasdaq Noncompliance Letter

On October 3, 2024, the Company received a letter (the “Letter”) from the Listing Qualifications Department of Nasdaq notifying that the Company was not in compliance with Listing Rules 5450(a)(2), which requires the Company to have at least 400 shareholders for continued listing on the Nasdaq Global Market (the “Minimum Total Holders Rule”). The Letter is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s securities on the Nasdaq Global Market.

The Letter states that the Company has 45 calendar days (until November 19, 2024) to submit a plan to regain compliance with the Minimum Total Holders Rule. If Nasdaq accepts the Company’s plan, Nasdaq may grant the Company an extension of up to 180 calendar days from the date of the Letter to evidence compliance with the Minimum Total Holders Rule. If Nasdaq does not accept the Company’s plan, the Company will have the opportunity to appeal the decision in front of a Nasdaq Hearings Panel.

The Letter notes that the Company may be eligible to transfer the listing of its securities to the Nasdaq Capital Market, provided that it then satisfies the requirements for continued listing on the Nasdaq Capital Market. On October 3, 2024, the Company submitted an application for a transfer from the Nasdaq Global Market to the Nasdaq Capital Market. On November 12, 2024, Nasdaq approved the Company’s application to list its ordinary shares, units, warrants and rights on the Nasdaq Capital Market. The Company’s ordinary shares, units, warrants and rights commenced trading on the Nasdaq Capital Market at the opening of business on November 14, 2024.

Extensions and Extension Notes

Pursuant to the Company’s Amended and Restated Memorandum and Articles of Association, the Company must (i) consummate a business combination, or (ii) cease its operations except for the purpose of winding up if it fails to complete such business combination and redeem or repurchase 100% of the Company’s public shares included as part of the public units issued in the Company’s initial public offering, by March 27, 2024, and if the Company does not consummate a business combination by March 27, 2024, it may be extended up to nine times, each by a one-month extension (the “Monthly Extension”), for a total of up to nine months to December 27, 2024, without the need for any further approval of the Company’s shareholders. For each Monthly Extension, the Sponsor”) and/or its designee will deposit $60,000 for all remaining public shares into the Trust Account (the “Monthly Extension Fee”). Currently, the Company has until November 27, 2024 to complete its initial business combination.

From January 2024 to the date hereof, ten Monthly Extension Fees in a total of $620,000 were deposited into the Trust Account for the public shareholders, which enables the Company to extend the period of time it has to consummate its initial business combination by November 27, 2024. The payment of the Monthly Extension Fees was made by Shenzhen Squirrel pursuant to the Business Combination Agreement. As a result, the Company issued a total of twelve unsecured promissory notes to Shenzhen Squirrel in connection with the payment for the Monthly Extension Fee (the “Extension Notes”). Currently, the Company has until November 27, 2024 to consummate its initial business combination.

Working Capital Loans

On April 12, 2024 and October 8, 2024, the Company issued two unsecured promissory notes in the principal amount of $300,000 and $400,000 to the Sponsor, respectively (such two unsecured promissory notes, the “Sponsor Notes,” together with the Extension Notes, collectively, the “Notes”). The proceeds of the Sponsor Notes, which may be drawn down from time to time until the Company consummates its initial business combination, will be used for general working capital purposes.

The Notes bear no interest and are payable in full upon the earlier to occur of (i) the consummation of the Company’s business combination or (ii) the date of expiry of the term of the Company (the “Maturity Date”). The following shall constitute an event of default: (i) a failure to pay the principal within five business days of the Maturity Date; (ii) the commencement of a voluntary or involuntary bankruptcy action, (iii) the breach of the Company’s obligations thereunder; (iv) any cross defaults; (v) an enforcement proceedings against the Company; and (vi) any unlawfulness and invalidity in connection with the performance of the obligations thereunder, in which case the Notes may be accelerated.

The payees of the Sponsor Notes have the right, but not the obligation, to convert the Notes, in whole or in part, respectively, into private units (the “Conversion Units”) of the Company, each consisting of one Ordinary Share, one warrant, and one right to receive one-tenth (1/10) of one Ordinary Share upon the consummation of a business combination, as described in the prospectus of the Company (File No: 333-268578), by providing the Company with written notice of the intention to convert at least two business days prior to the closing of the business combination. The number of Conversion Units to be received by the payees in connection with such conversion shall be an amount determined by dividing (x) the sum of the outstanding principal amount payable to the payees by (y) $10.00. Shenzhen Squirrel has agreed that it will not convert the Extension Notes into the units upon the consummation of the Business Combination.

Results of Operations and Known Trends or Future Events

We have neither engaged in any operations nor generated any revenues to date. Our activities from inception through September 30, 2024 involved mainly searching for a suitable target for our initial business combination and to facilitate the consummation of the business combination with Shenzhen Squirrel. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After the IPO, we incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for expenses associated with the search for target opportunities.

For the three months ended September 30, 2024, we had a net income of $296,392 which consisted of interest and dividend income of $795,738 on investments held in Trust Account which was offset by operating cost of $499,346.

For the three months ended September 30, 2023, we had a net income of $794,031 which consisted of interest and dividend income of $936,211on investments held in Trust Account which was offset by operating cost of $142,180.

For the nine months ended September 30, 2024, we had a net income of $1,659,067 which consisted of interest and dividend income of $2,461,081 on investments held in Trust Account which was offset by operating cost of $802,014.

For the nine months ended September 30, 2023, we had a net income of $2,250,037 which consisted of interest and dividend income of $2,577,275 on investments held in Trust Account which was offset by operating cost of $327,238.

Liquidity and Capital Resources

For the nine months ended September 30, 2024, cash used in operating activities was $655,112. As of September 30, 2024, we had cash of $128,169 available for working capital needs. All remaining cash is held in the Trust Account and is generally unavailable for our use, prior to an initial business combination, and is restricted for use either in a business combination or to redeem the ordinary shares. As of September 30, 2024, none of the amount on deposit in the Trust Account was available to be withdrawn as described above.

We intend to use substantially all of the net proceeds of the IPO, including the funds held in the Trust Account, to acquire a target business or businesses and to pay our expenses relating thereto, including deferred underwriting commissions of $2,415,000 payable to Network 1 Financial Securities, Inc. (“Network 1”), the representative of the underwriters of the IPO. To the extent that our share capital is used in whole or in part as consideration to effect our initial business combination, the remaining proceeds held in the Trust Account as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our initial business combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses.

Over the next 12 months (assuming a business combination is not consummated prior thereto), we will be using the funds held outside of the Trust Account for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.

If our estimates of the costs of undertaking in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, or the amount of interest available to us from The Trust Account is less than we expect as a result of the current interest rate environment, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

As of September 30, 2024, we had cash of $128,169 and working capital deficiency of $1,476,824. We have incurred and expect to continue to incur significant professional costs to remain as a publicly traded company and to incur significant transaction costs in pursuit of the consummation of a business combination. In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial doubt about our ability to continue as a going concern. Our management’s plan in addressing this uncertainty is through the funds loaned from our Sponsor, officers, directors or their affiliates. In addition, if we are unable to complete a business combination by December 27, 2024 (if extended) (the “Combination Period”), our board of directors would proceed to commence a voluntary liquidation and thereby a formal dissolution of us. There is no assurance that our plans to consummate a business combination will be successful within the Combination Period. As a result, management has determined that such additional conditions also raise substantial doubt about our ability to continue as a going concern. Our financial statement does not include any adjustments that might result from the outcome of this uncertainty.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities that would be considered off-balance sheet arrangements as of September 30, 2024. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

As of September 30, 2024, we do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.

We are obligated to pay the underwriters a deferred underwriting fees equal to 3.5% of the gross proceeds of the IPO. Upon completion of the business combination, $2,415,000 will be paid to the underwriters from the funds held in the Trust Account.

The founder shares, the Ordinary Shares included in the Private Units, and any Ordinary Shares that may be issued upon conversion of working capital loans (and any underlying securities) will be entitled to registration rights pursuant to a registration rights agreement entered into in connection with the IPO. The holders of these securities are entitled to make up to two demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

On October 8, 2024, the Company issued an unsecured promissory note in the principal amount of $400,000 to the Sponsor (the “Sponsor Note”). The proceeds of the Sponsor Note, which may be drawn down from time to time until the Company consummates its initial business combination, will be used for general working capital purposes. The Sponsor Note bears no interest and are payable in full upon the earlier to occur of (i) the consummation of the Company’s business combination or (ii) the date of expiry of the term of the Company (the “Maturity Date”). The following shall constitute an event of default: (i) a failure to pay the principal within five business days of the Maturity Date; (ii) the commencement of a voluntary or involuntary bankruptcy action, (iii) the breach of the Company’s obligations thereunder; (iv) any cross defaults; (v) an enforcement proceedings against the Company; and (vi) any unlawfulness and invalidity in connection with the performance of the obligations thereunder, in which case the Sponsor Notes may be accelerated. The payees of the Sponsor Note have the right, but not the obligation, to convert the Sponsor Note, in whole or in part, respectively, into private units (the “Conversion Units”) of the Company, each consisting of one Ordinary Share, one warrant, and one right to receive one-tenth (1/10) of one Ordinary Share upon the consummation of a business combination. The number of Conversion Units to be received by the payees in connection with such conversion shall be an amount determined by dividing (x) the sum of the outstanding principal amount payable to the payees by (y) $10.00.

Critical Accounting Estimates

Use of Estimates

The preparation of unaudited condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The Company does not have any critical accounting estimates.

Investments Held in Trust Account

At September 30, 2024, assets held in the Trust Account was $62,103,769. Substantially all of the assets held in the Trust Account were held in mutual funds. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest and dividend income on investments held in Trust Account in the accompanying condensed statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information.

Warrants

We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own Ordinary Shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. We determined that upon further review of the warrant agreements, we concluded that our warrants qualify for equity accounting treatment.

Offering Costs

Offering costs consisting principally of underwriting, legal, accounting and other expenses that are directly related to the IPO and charged to shareholders’ deficit upon the completion of the IPO. We comply with the requirements of FASB ASC Topic 340-10-S99-1, “Other Assets and Deferred Costs – SEC Materials” (“ASC 340-10-S99”) and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering”. 

Share-Based Compensation Expense

We account for share-based compensation expense in accordance with ASC 718, “Compensation - Stock Compensation” (“ASC 718”). Under ASC 718, share-based compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a share-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. Forfeitures are recognized as incurred.

Ordinary Shares Subject to Possible Redemption

We account for our Ordinary Shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable Ordinary Shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, Ordinary Shares are classified as shareholders’ equity. Our public shares of Ordinary Shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Ordinary Shares included in the Public Units subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of our balance sheet. We recognize changes in redemption value immediately as they occur and adjusts the carrying value of redeemable Ordinary Shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable Ordinary Shares are affected by charges against additional paid in capital or accumulated deficit.

Net Income (Loss) Per Ordinary Share

The Company complies with accounting and disclosure requirements of FASB ASC 260, Earnings Per Share. In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable shares and non-redeemable shares and the undistributed income (loss) is calculated using the total net loss less interest income and unrealized gain or loss on investments in trust account less any dividends paid. We then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable shares. Any remeasurement of the accretion to redemption value of the ordinary shares subject to possible redemption was considered to be dividends paid to the public shareholders. 

Fair Value of Financial Instruments

ASC Topic 820 “Fair Value Measurements and Disclosures” defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. ASC Topic 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances.

The fair value hierarchy is categorized into three levels based on the inputs as follows: 

At September 30, 2024 and December 31, 2023, the assets held in the Trust Account were substantially held in mutual funds and U.S. Treasury securities, respectively. All of the Company’s investments held in the Trust Account are classified as trading securities.

Income Taxes

We account for income taxes under ASC740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. We have identified Cayman Islands as its only “major” tax jurisdiction, as defined. Based on our evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in our financial statements. Since we were incorporated on June 14, 2022, the evaluation was performed for both 2022 and 2023 tax year which will be the only period subject to examination. We believe that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position. Our policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense.

We may be subject to potential examination by foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with foreign tax laws.

Our tax provision was deemed to be de minimis for the period presented. We are considered to be an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.

Recent Accounting Pronouncements

In August 2020, the FASB issued a new standard (ASU 2020-06) to reduce the complexity of accounting for convertible debt and other equity-linked instruments. For certain convertible debt instruments with a cash conversion feature, the changes are a trade-off between simplifications in the accounting model (no separation of an “equity” component to impute a market interest rate, and simpler analysis of embedded equity features) and a potentially adverse impact to diluted earnings per share by requiring the use of the if-converted method. The new standard will also impact other financial instruments commonly issued by both public and private companies. For example, the separation model for beneficial conversion features is eliminated simplifying the analysis for issuers of convertible debt and convertible preferred stock. Also, certain specific requirements to achieve equity classification and/or qualify for the derivative scope exception for contracts indexed to an entity’s own equity are removed, enabling more freestanding instruments and embedded features to avoid mark-to-market accounting. The new standard is effective for companies that are SEC filers (except for smaller reporting companies) for fiscal years beginning after December 15, 2021 and interim periods within that year, and two years later for other companies. Companies can early adopt the standard at the start of a fiscal year beginning after December 15, 2020. The standard can either be adopted on a modified retrospective or a full retrospective basis. The adoption of ASU 2020-06 on January 1, 2024 did not have a material effect on our financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Item 4. Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the quarter ended September 30, 2024, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer who also serves as our principal financial and accounting officer has concluded that during the period covered by this report, our disclosure controls and procedures were effective.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding, investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business, financial condition or results of operations.

Item 1A. Risk Factors

Not applicable to a smaller reporting company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities

From January 1, 2024 to the date hereof, the Company issued a total of ten (10) Extension Notes to Shenzhen Squirrel in the total principal amount of $620,000. The proceeds of the Extension Notes were deposited into the Company’s Trust Account for the public shareholders, which enables the Company to extend the period of time it has to consummate its initial business combination up to November 27, 2024. As of the date hereof, the Company has issued the Extension Notes in the aggregate principal amount of $900,000.

On October 8, 2024, the Company issued the Sponsor Note to the Sponsor in the principal amount of $400,000, which may be drawn down from time to time until the Company consummates its initial business combination, for general working capital purposes.

The information of the Notes contained under Item 2 of Part I above is incorporated herein by reference in response to this item. The issuance of the Notes was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits.

* Filed herewith.

** Furnished.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.