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[36]. - An additional $7.5 million was generated from the full exercise of the over-allotment option, bringing total proceeds to $57.5 million[36]. - The private placement with Aurora Beacon LLC generated total proceeds of $2,543,750 from the sale of 254,375 private units[37]. - A total of $57,787,500 from the IPO and private placement proceeds was deposited in a trust account for public shareholders, with specific conditions for fund release[38]. - The trust account initially holds $58,287,500, which includes approximately $1,868,750 for deferred underwriting discounts[152]. - The company intends to use the funds held outside the Trust Account primarily for identifying and evaluating target businesses and related expenses[193]. Business Combination and Acquisition Strategy - The merger agreement involves the acquisition of HZJL, with HZJL's shareholders receiving 35 million ordinary shares of Xpand Boom Technology, plus potential earn-out consideration of up to 20 million shares based on revenue targets[62]. - The transaction is subject to regulatory approvals and shareholder approvals, with a requirement for a registration statement to be declared effective by the SEC[63]. - The initial business combination must involve target businesses with a fair market value of at least 80% of the trust account balance[112]. - The company intends to acquire 100% of the equity interest or assets of the target business, ensuring majority control[113]. - The target size for acquisitions is intended to be between $500 million and $2 billion, focusing on companies with significant revenue growth[98]. - The strategy includes targeting businesses in high-growth sectors such as green and sustainable businesses, new energy, and artificial intelligence applications[99]. - The management team aims to create shareholder value by guiding emerging high-growth companies towards commercialization[106]. - The company intends to pursue targets in green and sustainable business, new energy, and cutting-edge technologies, focusing on small cap companies in North America, Europe, and the Asia Pacific regions[86]. Regulatory Risks and Compliance - The company will not pursue business combinations with entities operating through variable interest entities (VIEs), which may restrict acquisition opportunities in China[42]. - The company may face significant regulatory risks from the PRC government that could impact its ability to conduct business combinations or operations in China[45]. - The company is subject to the Trial Administrative Measures by the CSRC, which could impose additional compliance requirements for overseas listings[50]. - The PRC government has implemented new regulatory measures that could significantly impact business operations for companies with a majority of operations in China, including potential material changes in operations and depreciation of share value[77]. - Recent regulatory actions by the PRC government include increased scrutiny on foreign investments and cybersecurity reviews, which may adversely affect the ability to conduct business combinations with PRC entities[78]. - The PRC government controls the conversion of Renminbi (RMB) into foreign currencies, which may restrict the ability of PRC subsidiaries to remit sufficient foreign currency for dividend payments[91]. - If classified as a PRC tax resident enterprise, dividends paid to overseas shareholders may be subject to a withholding tax of up to 10.0%[92]. Financial Performance and Projections - The company reported a net income of $1,573,962 for the year ended December 31, 2025, primarily from interest income of $2,389,246[188]. - The company has not generated any operating revenue to date and will not do so until after completing its initial business combination[187]. - As of December 31, 2025, the company had cash of $37,174 and a working capital deficit of $382,105[155]. - Management has determined substantial doubt about the company's ability to continue as a going concern through January 15, 2026, if an initial business combination is not completed[196]. - The company has no long-term debt, capital lease obligations, or operating lease obligations as of December 31, 2025[198]. Shareholder Rights and Redemption - Public shareholders will have the opportunity to redeem shares at a per-share price initially anticipated to be $10.05[132]. - Redemption rights will be limited to 20% of the shares sold in the IPO for any public shareholder acting in concert with others[134]. - Initial shareholders and officers will not have redemption rights for any ordinary shares owned by them[135]. - Shareholders may withdraw redemption requests at any time up to the vote on the proposed business combination[139]. - If the initial business combination is not approved, public shareholders who elected to redeem their shares will not be entitled to the pro rata share of the trust account[140]. - A total of 5,668,070 ordinary shares were tendered for redemption in connection with the EGM held on November 20, 2025[142]. - As of December 31, 2025, 1,548,345 shares were redeemed at approximately $10.55 per share, totaling $16,331,209[186]. Management and Governance - The management team has extensive experience in public companies and financial management, which is expected to aid in identifying suitable acquisition targets[69][70]. - The management team is well positioned to capitalize on acquisition opportunities in emerging markets driven by innovative technologies or novel business models[228]. - The audit committee is composed of three independent members, ensuring compliance with NASDAQ listing standards and SEC rules[230]. - Chengming Dou qualifies as an "audit committee financial expert" as defined by SEC rules, enhancing the committee's oversight capabilities[231]. - The audit committee is responsible for pre-approving all audit and non-audit services provided by independent registered public accounting firms[232]. - The nominating committee oversees the selection of board nominees, ensuring candidates have notable achievements and high ethical standards[233]. - The company has established clear hiring policies for employees of independent registered public accounting firms to maintain auditor independence[232].
Rising Dragon Acquisition Corp.(RDAC) - 2025 Q4 - Annual Report