IPO and Fundraising - The company completed its IPO on October 15, 2024, raising gross proceeds of $50 million from the sale of 5,000,000 units at an offering price of $10.00 per unit[37]. - An additional $7.5 million was generated from the full exercise of the over-allotment option, bringing total proceeds to $57.5 million[37]. - The private placement with Aurora Beacon LLC generated $2,543,750 from the sale of 254,375 private units, which are identical to the IPO units[38]. - A total of $57,787,500 of net proceeds from the IPO and private placement was deposited in a trust account for the benefit of public shareholders[39]. - The trust account initially holds $50,750,000, which can increase to $58,287,500 if the over-allotment option is fully exercised[143]. - The IPO generated gross proceeds of $50,000,000 from the sale of 5,000,000 units, with an additional $7,500,000 from the over-allotment option[168]. - A private placement of 254,375 units was completed simultaneously, generating proceeds of $2,543,750[169]. - Total net proceeds of $57,787,500 from the IPO and private placement were deposited in a trust account[170]. Regulatory and Compliance Risks - The company is subject to significant regulatory risks from the PRC government, which may impact its ability to search for and complete a business combination[49]. - The PRC government has recently implemented new regulations affecting various industries, which could complicate future business combinations and operations[50]. - The company believes it is not required to obtain approvals from PRC authorities for its IPO or to search for a target company, but future regulatory changes could impose new requirements[53]. - The company will not conduct an initial business combination with any target company that operates through variable interest entities (VIEs), limiting the pool of potential acquisition candidates in China[43]. - Recent PRC regulatory actions may create operational risks for any post-business combination company, affecting the ability to conduct business and accept foreign investments[73][76]. - The combined company may face restrictions on paying dividends due to PRC laws, which require profits to be distributable and subject to statutory reserve funds[54]. - The combined company's ability to remit foreign currencies for dividends or loan repayments may be hindered by PRC foreign exchange control regulations[57]. - The PRC government imposes controls on the conversion of RMB into foreign currencies, which may restrict the ability of PRC subsidiaries to remit sufficient foreign currency for dividends[86]. Business Strategy and Target Acquisition - The company intends to pursue target businesses with significant revenue growth, valued between $500 million and $2 billion[92]. - The focus is on high-growth industries such as green and sustainable businesses, new energy, cutting-edge technologies, artificial intelligence applications, business software, and healthcare products[93]. - The strategy includes targeting companies with proven financial performance and growth potential through new products and technological advances[93]. - The management team aims to create shareholder value by identifying target businesses with significant expansion opportunities[101]. - The evaluation of target companies will consider risk-adjusted peak sales potential and the ability to achieve system cost savings[102]. - The management intends to seek companies with low leverage and shareholder-friendly governance, valued at low prices relative to their earnings potential[103]. - The company is not targeting businesses in China but may consider entities with significant ties to China, which could subject the post-business combination business to Chinese laws and regulations[81]. - The company has evaluated approximately three business combination opportunities in Asia and Europe across various sectors before deciding to move ahead with HZJL[91]. Management and Governance - The management team has significant experience in public companies and financial management, which is expected to aid in identifying suitable acquisition targets[66][68]. - The management team is well positioned to capitalize on acquisition opportunities in emerging markets driven by innovative technologies[218]. - The audit committee is comprised solely of independent directors, ensuring compliance with NASDAQ rules[220]. - Chengming Dou qualifies as an "audit committee financial expert" as defined by SEC rules[221]. - The company has established four standing committees: executive, audit, compensation, and nominating[219]. - The nominating committee is responsible for overseeing the selection of board nominees, ensuring a diverse mix of skills and backgrounds[224]. - The company emphasizes the importance of ethical standards and professionalism in selecting director nominees[225]. - The management team has extensive experience in corporate governance and financial accounting, enhancing oversight capabilities[217]. - The board of directors includes members with significant experience in acquisitions, divestitures, and corporate strategy[217]. Financial Performance and Projections - For the year ended December 31, 2024, the company reported a net income of $257,513, primarily from interest earned on marketable securities[175]. - Cash used in operating activities for the year was $326,033, with changes in operating assets and liabilities providing $40,500 of cash[176]. - As of December 31, 2024, the company had cash of $392,679 and marketable securities in the Trust Account of $58,330,546[179]. - The company has not generated any operating revenue to date and will not do so until after completing an initial business combination[174]. - The company has incurred significant costs as a public entity, with cash of $392,679 and working capital equity of $433,179 as of December 31, 2024[146]. - The company has no long-term debt or capital lease obligations, with a deferred fee of $1,868,750 payable upon closing of an initial business combination[184]. - Management believes there will be sufficient working capital to meet anticipated cash needs prior to the initial business combination[181]. Shareholder Rights and Redemption - Public shareholders will have the opportunity to redeem their shares at an anticipated price of $10.05 per share, based on the amount in the trust account[125]. - The company has 15 months from the IPO closing to complete the initial business combination, with the possibility of extending this period up to 21 months[134]. - If the initial business combination is not completed, public shareholders who elected to redeem their shares will not receive their pro rata share of the trust account[133]. - Initial shareholders have agreed to waive their redemption rights for founder shares if the business combination is not consummated within the required timeframe[136]. - The per-share redemption amount upon dissolution is approximately $10.05, which may be subject to claims from creditors[137]. - The company may require public shareholders to tender their shares to exercise redemption rights, which could incur nominal costs[129]. - The company will cease operations and distribute the trust account amount to public shareholders if the business combination is not completed within the allotted time[135]. - There is no guarantee that third parties will waive claims to the trust account, which could affect the company's ability to pursue potential target businesses[138]. Insider Trading and Ethical Standards - The company has adopted a Code of Ethics applicable to all directors, officers, and employees, which is available upon request[229]. - An Insider Trading Policy has been implemented to promote compliance with insider trading laws and regulations[230]. - Potential conflicts of interest exist as officers and directors may not commit full time to the company's affairs, leading to possible allocation conflicts[232]. - Directors and officers owe fiduciary duties under Cayman Islands law, including acting in good faith and exercising independent judgment[236].
Rising Dragon Acquisition Corp.(RDAC) - 2024 Q4 - Annual Report