Horizon Space Acquisition II Corp. - 10-K

Item 1A. Risk Factors.

As a smaller reporting company, we are not required to include risk factors in this Annual Report on Form 10-K. Factors that could cause our actual results to differ materially from those in this Annual Report on Form 10-K are any of the risks described in the final prospectus of the Company filed with the SEC on November 14, 2024 (File No. 333-282758) (the “Prospectus”), the Annual Report on Form 10-K filed with the SEC on March 27, 2025, the Form F-4 and the Proxy Statement. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Annual Report on Form 10-K, there have been no material changes to the risk factors disclosed in the Prospectus, except we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References to the “Company,” “us,” “our,” or “we” refer to Horizon Space Acquisition II Corp. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and related notes herein.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K.

Overview

We are a blank check exempted company incorporated in the Cayman Islands on March 21, 2023, for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region. Because of our significant ties to China, we may pursue opportunities in China (including Hong Kong and Macau). We intend to utilize cash derived from the proceeds of our initial public offering (the “IPO”), our securities, debt or a combination of cash, securities and debt, in effecting a business combination.

Initial Public Offering and Private Placement

On November 18, 2024, we consummated the IPO of 6,000,000 units (the “Units”). Each Unit consists of one ordinary share, $0.0001 par value per share (each, an “Ordinary Share”), and one right (each, a “Right”), each one Right entitling the holder thereof to exchange for one-tenth of one Ordinary Share upon the completion of the Company’s initial business combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $60,000,000.

Substantially concurrently with the closing of the IPO, the Company completed the private sale of 200,000 units (the “Private Units”) to the Company’s sponsor, Horizon Space Acquisition II Sponsor Corp. (the “Sponsor”). Each Private Unit consists of one Ordinary Share and one Right. The Private Units were sold at a purchase price of $10.00 per Private Unit, generating gross proceeds to the Company of $2,000,000. The Private Units are identical to the Units sold in the IPO, subject to limited exceptions as further described in the Prospectus.

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In connection with the IPO, the underwriters were granted an option to purchase up to 900,000 additional Units (the “Over-Allotment Option”). On November 19, 2024, the representative of the underwriters in the IPO, Maxim Group LLC, exercised the Over-Allotment Option in full, and on November 21, 2024, the Representative consummated purchase of 900,000 Units (the “Option Units”), generating gross proceeds of $9,000,000. Simultaneously with the issuance and sale of the Option Units, the Company completed a private placement sale of 13,500 Private Units (the “Additional Private Units”) to the Sponsor at a purchase price of $10.00 per Private Unit, generating gross proceeds of $135,000.

In connection with the IPO and the sale of the Option Units, the Company issued a total of 241,500 Ordinary Shares (the “Representative Shares”) to the Representative.

The proceeds of $69,000,000 from the IPO, the sale of the Option Units and the sales of Private Units, were placed in a trust account (the “Trust Account”) established for the benefit of our public shareholders and the underwriters of the IPO with Wilmington Trust, N.A. acting as trustee.

Our management has broad discretion with respect to the specific application of the proceeds of the IPO and the Private Placement that are held out of the Trust Account, although substantially all the net proceeds are intended to be applied generally towards consummating a business combination and working capital.

Recent Developments

Separate Trading of the Ordinary Shares and Rights

On February 4, 2025, the Company announced that holders of the Company’s units may elect to separately trade the ordinary shares and rights included in its units, commencing on February 5, 2025. The Ordinary Shares and Rights trade on the Nasdaq Global Market (“Nasdaq”) under the symbols “HSPT” and “HSPTR”, respectively. Units not separated will continue to trade on Nasdaq under the symbol “HSPTU.”

Business Combination with SL Bio Ltd.

On May 9, 2025, we entered into a business combination agreement (the “Business Combination Agreement”) with SL Science Holding Limited, a Cayman Islands exempted company (“PubCo”), CW Mega Limited, a Cayman Islands exempted company and a wholly-owned subsidiary of PubCo (“Merger Sub I”), WW Century Limited, a Cayman Islands exempted company and a wholly-owned subsidiary of PubCo (“Merger Sub II”), and SL Bio Ltd., a Cayman Islands exempted company limited by shares (“SL Bio”), pursuant to which, among other things, (i) Merger Sub I will merge with and into the Company, with the Company as the surviving entity and a wholly-owned subsidiary of PubCo (the “First Merger”), and (ii) following the First Merger, Merger Sub II will merge with and into SL Bio, with SL Bio as the surviving entity and a wholly-owned subsidiary of PubCo (the “Second Merger,” and together with the First Merger and the other transactions contemplated by the Business Combination Agreement, the “SL Bio Business Combination”). Upon the consummation of the SL Bio Business Combination, each of the Company and SL Bio will become a subsidiary of PubCo, and the Company’s shareholders and SL Bio’s shareholders will receive ordinary shares, par value US$1.00 per share, of PubCo (“PubCo Ordinary Shares”) as consideration and become the shareholders of PubCo. The PubCo Ordinary Shares is expected to be listed and traded on the Nasdaq Stock Market LLC following the consummation of the SL Bio Business Combination. In connection with the SL Bio Business Combination, PubCo filed with the SEC a registration statement on Form F-4 (File No. 333-292214), which was declared effective on January 13, 2026 (as amended and supplemented, the “Form F-4”), and the Company filed a definitive proxy statement (as amended and supplemented, the “Proxy Statement”) for the solicitation of proxies in connection with an extraordinary general meeting of the Company’s shareholders on January 13, 2026.

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On February 12, 2026, the Company held an extraordinary general meeting (the “Business Combination EGM”) in connection with the SL Bio Business Combination. The shareholders approved following proposals:

1. The Business Combination Proposals: (a) (i) the Business Combination Agreement and (ii) other Transaction Documents (as defined in the Business Combination Agreement) be approved, ratified and confirmed in all respects; (b) the Business Combination which includes the First Merger followed by the Second Merger, and other transactions contemplated in the Business Combination Agreement be approved, ratified and confirmed in all respects; and (c) the plan of First Merger in relation to the First Merger and the filing of the plan of First Merger with the Registrar of Companies of the Cayman Islands be approved, ratified, and confirmed in all respects.

2. Amended M&A Proposal: the shareholders approved, ratified and confirmed in all respects the amendment and restatement of memorandum and articles of association of PubCo.

3. Sole Director Appointment Proposal: the shareholders approved, ratified and confirmed in all respects the appointment of William Wang Ching-Dong as the sole director of HSPT, with effect from the First Merger Effective Time (as defined in the Business Combination Agreement).

In connection with the Business Combination EGM, 3,502,404 ordinary shares of HSPT were rendered for redemption, which will be redeemed upon and following the consummation of the Business Combination.

Extension, Amendments to Articles of Incorporation or Bylaws and Trust Agreement Amendment

On February 13, 2026, the Company held an extraordinary general meeting (the “Extension EGM”), where the shareholders approved following proposals:

1. The MAA Amendment Proposal: the shareholders approved the proposal to amend the Company’s Amended and Restated Memorandum and Articles of Association to provide that the Company must (i) consummate a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving the Company with one or more businesses, 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 units sold in the Company’s initial public offering that was consummated on November 18, 2024, by February 18, 2026 (the “Termination Date”), and if the Company does not consummate a business combination by the Termination Date, the Termination Date may be extended up to twelve times, each by an additional one-month extension, for a total of up to twelve months to February 18, 2027, without the need for any further approval of the Company’s shareholders.

2. The Trust Amendment Proposal: the shareholders approved, ratified and confirmed in all respects an amendment to amend the Investment Management Trust Agreement dated November 14, 2024 (the “Trust Agreement”), by and between the Company and Wilmington Trust, National Association (the “Trustee”) to provide that the Trustee must commence liquidation of the Company’s Trust Account only and promptly after its receipt of the applicable instruction letter delivered by the Company in connection with either a closing of an initial business combination or the Company’s inability to effect an initial business combination by February 18, 2026, or up to February 18, 2027, if extended by depositing per month the lesser of (i) $50,000 for all remaining public shares and (ii) $0.033 for each remaining public share in the Trust Account.

In connection with the Extension EGM, 3,219,311 ordinary shares of HSPT were redeemed.

Extension Deposit and Notes

On or about November17, 2025, an aggregate of $690,000 was deposited into the Trust Account for the Company’s public shareholders by Hsiao-Lan Wu, a designee of the Sponsor, which enables the Company to extend the period of time it has to consummate its initial business combination by three months from November 18, 2025 to February 18, 2026. In connection with the deposit, on November 18, 2025, the Company issued an unsecured promissory note of $690,000 to Hsiao-Lan Wu.

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On or about February 18, 2026, an aggregate of $50,000 was deposited into the Trust Account for the Company’s public shareholders by William Wang, the Chief Executive Officer of SL BIO, which enables the Company to extend the period of time it has to consummate its initial business combination by one month from February 18, 2026 to March 18, 2026. In connection with the deposit, on February 18, 2026, the Company issued an unsecured promissory note of $50,000 to William Wang.

On or about March 13, 2026, an aggregate of $50,000 was deposited into the Trust Account for the Company’s public shareholders by William Wang, which enables the Company to extend the period of time it has to consummate its initial business combination by one month from March 18, 2026 to April 18, 2026. In connection with the deposit, on March 17, 2026, the Company issued an unsecured promissory note of $50,000 to William Wang.

Results of Operations and Known Trends or Future Events

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the IPO. Following the IPO, we have not generated any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after the IPO. 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 year ended December 31, 2025, we had a net income of $1,809,006, which consisted of interest income from the Trust Account of $2,889,530 offset by formation and operating costs of $1,080,524.

For the year ended December 31, 2024, we had a net income of $142,877, which consisted of interest income from the Trust Account of $344,530 offset by formation and operating costs of $201,653.

Liquidity and Capital Resources

As of December 31, 2025, the Company had cash of $7,917 and working capital deficit of $1,319,649.

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. 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.

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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.

The Company has incurred and expects 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 the Company’s assessment of going concern considerations in accordance with ASC Subtopic 205-40, Presentation of Financial Statements - Going Concern, management has determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan in addressing this uncertainty is through the working capital loans from our Sponsor or its affiliates. In addition, if the Company is unable to complete a Business Combination within the Combination Period by April 18, 2026, unless further extended, the Company’s board of directors would proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company. There is no assurance that the Company’s plans to consummate a Business Combination will be successful within the Combination Period. As a result, management has determined that such additional condition also raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do 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 December 31, 2025. 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 December 31, 2025, we do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.

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 Extension Loans (and any underlying securities) will be entitled to registration rights pursuant to a registration and shareholder rights agreement entered into in connection with the IPO. The holders of these securities are entitled to make up to three 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.

Critical Accounting Estimates

We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by our management. We did not identify any critical accounting estimates.

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Recently adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosure (“ASU 2023-09”), which enhances the transparency and usefulness of income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company early adopted the ASU 2023-09 on January 1, 2025 on a prospective basis, and the adoption does not have a material impact on its financial statements.

Recently issued accounting standards which have not yet been adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures” (“ASU 2024-03”), which requires disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization and depletion, in each relevant expense caption. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption and retrospective application is permitted. The Company is currently assessing the impact of this guidance; however, the Company does not expect a material impact on its financial statements.

Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the on the Company’s financial statements.