YHNA

Business Context and Reporting Period

Company: YHN Acquisition I Limited (YHN)

Reporting Period: Fiscal year ended December 31, 2024

Entity Type: Special Purpose Acquisition Company (SPAC) incorporated in the British Virgin Islands.

Business Overview: YHN is a blank check company formed to effect a merger, share exchange, or asset acquisition with one or more target businesses. The Company consummated its Initial Public Offering (IPO) on September 19, 2024, listing on the Nasdaq Global Market. As of the filing date, the Company has not commenced substantive commercial operations and is focused on identifying a target business.

Key Financial Metrics

Note: The Trust Account balance includes interest income earned on investments held in trust. The Company reported a net income primarily driven by dividend income of $789,076 from the Trust Account, offset by formation and operating costs of $286,649.

Material Changes vs. Prior Period

• Capitalization: The Company transitioned from a pre-IPO entity with no assets to a public company with $61.8 million in total assets following the September 19, 2024 IPO.
• Revenue/Income: The Company moved from a net loss of $3,680 for the period from inception (Dec 18, 2023) to Dec 31, 2023, to a net income of $502,638 for the year ended Dec 31, 2024.
• Share Structure: 6,000,000 Public Units were sold at $10.00 per unit. Additionally, 250,000 Private Units were sold to the Sponsor. The underwriters did not exercise their over-allotment option, resulting in the forfeiture of 225,000 founder shares in February 2025.
• Liquidity: Cash held outside the Trust Account for working capital purposes was $737,704 immediately post-IPO, with $669,250 remaining as of year-end.

Outlook, Risks, and Unusual Items

Target Business Identification

On January 15, 2025, the Company entered into a legally binding Letter of Intent (LOI) with Mingde Technology Limited ("Holdco") and Zhejiang Xiaojianren Internet Technology Co., Ltd ("XJR"). The proposed business combination values the target at $396 million. A definitive agreement is expected within 30 days of the target's internal reorganization (due by Jan 27, 2025). As of the filing date, no definitive agreement has been signed.

Liquidity and Going Concern

The Company has until December 18, 2025 (15 months from IPO) to complete a business combination. If unsuccessful, the Company will liquidate and redeem public shares. The auditors have expressed substantial doubt about the Company's ability to continue as a going concern if a business combination is not consummated, as the Company will need to raise additional funds to meet obligations.

Risks and Contingencies

• Redemption Risk: Public shareholders may redeem shares for a pro rata portion of the Trust Account (approx. $10.18 per share as of Dec 31, 2024) upon the consummation of a business combination.
• Related Party Transactions: The Company pays its Sponsor $10,000 per month for administrative services. The Sponsor has also provided temporary advances and promissory notes.
• Enforceability: Due to the Sponsor and management's ties to Hong Kong and China, there are risks regarding the enforceability of U.S. securities laws judgments against directors and officers.

Investor Verification Checklist

• Definitive Agreement Status: Verify if the LOI with Mingde Technology Limited/XJR has been converted into a definitive merger agreement and the timeline for closing.
• Trust Account Balance: Confirm the current per-share redemption value, which fluctuates based on interest earned in the Trust Account.
• Redemption Intent: Monitor shareholder redemption rates, as high redemption levels could jeopardize the transaction or require additional financing.
• Going Concern Status: Assess the Company's ability to fund operations until the business combination is completed or the liquidation deadline (Dec 18, 2025) is reached.
• Related Party Fees: Review the cumulative administrative fees paid to the Sponsor and any outstanding related-party loans.