Business Context and Reporting Period
Company: Spark I Acquisition Corp (SPKL), a Cayman Islands exempted company and Special Purpose Acquisition Company (SPAC).
Reporting Period: Quarter ended March 31, 2026.
Status: The Company is in the pre-business combination phase, actively searching for a target. It has not commenced operations and generates no operating revenue. The Company is classified as a shell company, smaller reporting company, and emerging growth company.
Key Event: The Company is actively negotiating a binding business combination agreement with Kneron Holding Corporation following the expiration of non-binding LOIs in October 2024.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Income (Loss) | $(94,195) | $542,329 |
| Total Assets | $25,729,256 | $25,357,804 |
| Cash (Operating) | $132,866 | $487,194 |
| Investments in Trust Account | $25,486,851 | $25,164,437 |
| Total Liabilities | $7,813,199 | $7,347,552 |
| Working Capital Deficit | $(4,070,794) | N/A |
| Shares Outstanding (Class A Public) | 2,236,713 | 10,000,000 |
Debt & Liquidity: The Company holds $132,866 in operating cash and $25.5 million in the Trust Account. Total debt includes $2.2 million in a non-convertible note payable to the Sponsor and $1.54 million in a convertible note payable to the Sponsor. A deferred underwriting fee of $3.5 million is also outstanding.
Material Changes vs. Prior Period
- Net Loss vs. Net Income: The Company reported a net loss of $94,195 for Q1 2026, compared to net income of $542,329 in Q1 2025. This shift is primarily due to a significant decrease in interest income earned on the Trust Account ($221,762 in Q1 2026 vs. $1,119,693 in Q1 2025), reflecting lower interest rates or reduced principal balances.
- Share Count Reduction: Following a shareholder meeting in July 2025, approximately 7.76 million Class A shares were redeemed. Consequently, public shares outstanding dropped from 10 million in Q1 2025 to 2.24 million in Q1 2026.
- Trust Account Balance: The Trust Account balance increased slightly to $25.49 million from $25.16 million, driven by interest income and a $100,652 deposit by the Sponsor to extend the combination deadline, offset by the prior year's redemptions.
- Expense Reduction: Total operating expenses decreased to $315,959 in Q1 2026 from $577,365 in Q1 2025, largely due to lower administration fees ($159,940 vs. $269,650).
Outlook, Risks, and Management Commentary
- Going Concern: Management has determined that the liquidity condition and the timing of the liquidation deadline raise substantial doubt about the Company's ability to continue as a going concern for the next twelve months. The Company lacks capital resources to fund operations beyond the current period without additional financing.
- Deadline: The Company must consummate a business combination by September 29, 2026. If not completed, the Company will cease operations, redeem public shares, and liquidate.
- Financing: The Company relies on loans from the Sponsor (SLG SPAC Fund LLC) to meet working capital needs. As of March 31, 2026, the Sponsor has provided $3.74 million in total notes ($2.2M non-convertible, $1.54M convertible).
- Target Negotiations: The Company is in the active negotiation phase for a binding agreement with Kneron Holding Corporation. Previous non-binding LOIs with Kneron and a hospitality software company have expired.
- Risks: Risks include the inability to complete a business combination by the deadline, potential dilution from warrant exercises, and the Sponsor's limited ability to satisfy indemnification obligations if third-party claims reduce Trust Account funds.
Investor Verification Checklist
- Combination Deadline: Verify the status of negotiations with Kneron and the likelihood of closing before September 29, 2026.
- Liquidity Runway: Assess the $132,866 operating cash balance against monthly burn rates to determine if additional Sponsor loans are imminent.
- Redemption History: Note that ~78% of public shares were redeemed in July 2025; verify if further redemptions are anticipated upon a definitive agreement.
- Debt Obligations: Confirm the terms of the $3.74 million in Sponsor notes and the conditions for their conversion into warrants or forgiveness upon liquidation.
- Trust Account Value: Monitor the per-share redemption value, which was $11.39 as of March 31, 2026.