Rising Dragon Acquisition Corp. (RDAC) - 10-K Summary
Business Context and Reporting Period
Company: Rising Dragon Acquisition Corp. (RDAC)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Business Model: Cayman Islands exempted company (SPAC) formed to effect a merger, share exchange, or asset acquisition with one or more target businesses.
Current Status: The Company has entered into a definitive Merger Agreement with HZJL Cayman Limited ("HZJL"). Shareholders approved the business combination and an extension of the combination period at an Extraordinary General Meeting (EGM) on November 20, 2025. The Company has extended its deadline to consummate the transaction to April 15, 2026.
Key Financial Metrics
| Metric | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 |
|---|---|---|
| Net Income | $1,573,962 | $257,513 |
| Interest Income (Trust Account) | $2,389,246 | $543,046 |
| Formation & Operating Costs | $(815,284) | $(285,533) |
| Cash (Outside Trust) | $37,174 | $392,679 |
| Working Capital | $(382,105) Deficit | $433,179 Surplus |
| Trust Account Balance | $44,388,583 | $58,330,546 |
| Public Shares Outstanding | 4,201,655 (Subject to Redemption) | 5,750,000 (Subject to Redemption) |
| Redemption Value Per Share | $10.56 | $10.14 |
Material Changes vs. Prior Period
- Redemptions: Significant shareholder redemptions occurred in late 2025. An aggregate of 5,668,070 shares were tendered for redemption in connection with the EGM and Extension Meeting. Specifically, 1,548,345 shares were redeemed at the Extension Meeting on December 12, 2025, totaling approximately $16.3 million withdrawn from the Trust Account.
- Trust Account Balance: The Trust Account balance decreased from $58.3 million to $44.4 million, primarily due to the aforementioned redemptions.
- Liquidity Position: Cash held outside the Trust Account dropped significantly from $392,679 to $37,174, resulting in a working capital deficit of $382,105 as of year-end 2025.
- Extension Financing: To extend the business combination deadline, the Company issued unsecured promissory notes totaling $300,000 ($100,000 per month for three months) to the Sponsor and the target company's designee. These funds were deposited into the Trust Account.
Outlook, Risks, and Management Commentary
- Business Combination: The Company is proceeding with the merger with HZJL Cayman Limited. The aggregate consideration is $350 million in newly issued shares. The transaction is subject to regulatory approvals and customary closing conditions.
- Going Concern: The independent auditor has expressed substantial doubt about the Company's ability to continue as a going concern due to the working capital deficit and the requirement to liquidate if the business combination is not consummated by April 15, 2026.
- Extension Terms: The Company has the right to extend the combination period up to six times (total of 21 months from IPO). The monthly extension fee was amended to the lesser of $100,000 or $0.033 per remaining public share.
- Risks:
- China Regulatory Risk: Management and the Sponsor have significant ties to China. The Company faces risks related to PRC laws, including the Trial Administrative Measures of Overseas Securities Offering and Listing, and potential restrictions on foreign investment.
- Delisting Risk: Failure to complete the business combination by the deadline will result in liquidation and delisting.
- HFCA Act: While the current auditor is US-based, future targets in China may face inspection limitations under the Holding Foreign Companies Accountable Act.
Investor Verification Checklist
- Redemption Impact: Verify the final number of shares remaining post-redemption to confirm the pro-rata trust value per share.
- Extension Funding: Confirm that the $100,000 monthly extension payments have been deposited into the Trust Account for the periods leading up to April 15, 2026.
- Merger Conditions: Monitor the status of regulatory approvals, specifically regarding the CSRC filing and Nasdaq listing approval for the combined entity.
- Working Capital: Assess the Company's ability to fund operations outside the Trust Account given the current cash balance of $37,174 and working capital deficit.
- Target Financials: Review the financial statements and due diligence reports for HZJL Cayman Limited to validate the $350 million valuation.