8-K: Miluna Acquisition Corp. and CADV Ventures S.A. Announce Business Combination

Miluna Acquisition Corp. and AI software company CADV Ventures S.A. have entered into a definitive business combination agreement, expected to close in the second half of 2026, forming Kukugan Corp.

Summary

• Miluna Acquisition Corp. (Miluna), a SPAC, has signed a definitive Business Combination Agreement with CADV Ventures S.A. (CADV.AI), an AI software company.
• The transaction is expected to close in the second half of 2026, resulting in the combined company being named Kukugan Corp., a Cayman Islands exempted company.
• CADV.AI will be valued at a pre-money equity value of $300 million, with existing CADV.AI shareholders rolling 100% of their equity into the combined company.
• The combined company's ordinary shares and warrants are anticipated to be listed on a national securities exchange.
• CADV.AI's existing management team, led by CEO Shang Ju Lin, is expected to continue leading the combined company.
• An earn-out provision allows for up to 5,000,000 additional ordinary shares to be issued to CADV.AI shareholders upon achieving a $7,000,000 consolidated revenue milestone for the fiscal year ending December 31, 2027.
• The transaction is subject to shareholder approvals, regulatory approvals, and listing approval on a national securities exchange.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a neutral to slightly positive development, as it represents a standard SPAC business combination with a company in a growth sector, but success hinges on future performance and market conditions.

Positives

• CADV.AI's AI-assisted support model combines IT professionals' expertise with AI capabilities to improve digital customer engagement.
• The business combination is expected to provide growth capital for CADV.AI, validating its business model.
• The transaction is structured as an all-stock deal, with existing CADV.AI shareholders rolling 100% of their equity.
• The combined company is expected to be led by CADV.AI's experienced management team.
• Potential for accelerated growth, further product development, and strategic acquisitions through anticipated proceeds.
• Miluna identified CADV.AI as a high-quality company with strong fundamentals and an excellent management team.
• CADV.AI is strategically positioned to bridge AI development and practical industry applications.

Negatives

• The transaction is subject to numerous closing conditions, including shareholder and regulatory approvals, which may not be obtained.
• The earn-out shares are contingent on achieving a specific revenue milestone, which may not be met.
• Potential for dilution from the earnout, warrants, or any additional financing.
• The SPAC structure and potential for redemptions by public shareholders could impact the final enterprise value.
• The combined company's success depends on CADV.AI's ability to execute its growth and acquisition strategies.
• Risks associated with AI-enabled services, cybersecurity, data privacy, and evolving regulations.

Risks

• The inability of the parties to successfully or timely consummate the business combination, including the risk that regulatory approvals are not obtained, are delayed, or are subject to unanticipated conditions.
• The risk that the approval of the shareholders of Miluna or CADV.AI or any other condition to the closing of the business combination is not obtained.
• Failure to realize the anticipated benefits of the business combination.
• Risks relating to any legal proceedings that may be instituted against Miluna, the combined company or others following the announcement of the business combination.
• Risks relating to the uncertainty of the projected financial information with respect to CADV.AI and the combined company.
• The ability to meet stock exchange listing standards following the consummation of the business combination.
• The amount of redemption requests made by Miluna's public shareholders.
• The inability to secure PIPE, ELOC or other financing on acceptable terms or at all.

Future Outlook

The combined company, Kukugan Corp., anticipates accelerating growth, further product development, and pursuing strategic acquisitions with the capital raised. CADV.AI expects to continue its programmatic acquisition strategy to add specialized capabilities. The success of these initiatives is contingent on achieving a $7,000,000 revenue milestone in fiscal year 2027 for the earn-out shares.

Management Comments

• "Today marks a pivotal milestone for CADV.AI. This proposed business combination with Miluna and our transition to a public company is expected to provide growth capital and is a strong validation of the business we have built."
• "Over the past few years, we have assembled a world-class platform to address the most demanding needs of our customers. Our teams relentless focus on innovation, quality, and execution has strategically positioned CADV.AI to help companies maintain the stability of their IT systems by providing access to a team of technology specialists and utilizing AI-based tools."
• "We expect that the anticipated proceeds from and in connection with this transaction, if consummated, will allow us to accelerate growth, further product development, and pursue strategic acquisitions. Most importantly, it ensures we can continue to deliver exceptional value and performance to our customers and stakeholders. I am confident that as a public company, CADV.AI will be even better positioned to drive innovation and growth in our sector."
• "Our goal at Miluna was to identify a high-quality, visionary company with strong fundamentals and an excellent management team, and we have found that in CADV.AI."
• "Shang Ju and his team have built an impressive platform that meets the demands of their customers and the industry. CADV.AIs strategic positioning, functioning as a bridge between the foundational development of artificial intelligence and its practical, industry-specific applications, truly sets it apart."
• "We believe CADV.AI is poised for sustained expansion and value creation, and we are excited to partner with the company to bring this business to the public markets. We look forward to working closely with the CADV.AI team to support their strategic vision."

Industry Context

StockSavvy.ai notes that the combination of a SPAC with an AI software company focused on customer engagement and IT support aligns with current market trends favoring technology-driven solutions and the ongoing consolidation within the AI sector. The SPAC route offers a faster path to public markets for companies like CADV.AI, while providing capital for growth and potential acquisitions.

Comparison to Industry Standards

• The $300 million pre-money valuation for CADV.AI, an AI software company founded in 2017, appears within a reasonable range for companies in the AI and IT services sector, though specific comparisons depend heavily on revenue, profitability, and growth rates not fully detailed here.
• The earn-out structure, tied to a $7 million revenue milestone in 2027, is a common mechanism in SPAC deals to bridge valuation gaps and incentivize future performance, aligning with industry practices.
• The $10.00 per share reference value for the transaction is a standard benchmark used in many SPAC IPOs and subsequent business combinations.
• The potential for additional financing of up to $50 million via PIPE or ELOC is a typical strategy for SPACs to ensure sufficient capital for the combined entity's operations and growth, mirroring common industry approaches.

Management Changes

Related Party Transactions

• Miluna will issue Class B ordinary shares for nominal consideration to a designated individual, which are non-transferable and carry 15 votes per share, with no economic participation rights.

Stakeholder Impact

• Shareholders of Miluna will vote on the proposed business combination and may have their shares redeemed.
• Existing shareholders of CADV.AI will roll their equity into the combined company and may receive additional earn-out shares.
• Employees of CADV.AI are expected to continue with the combined company, led by the existing management team.
• Customers of CADV.AI will continue to receive AI-assisted technical support services.

Next Steps

• Miluna shareholders will vote on the approval of the Business Combination Agreement and the Transactions.
• A registration statement on Form S-4 will be prepared and filed with the SEC.
• The definitive proxy statement and prospectus will be mailed to Miluna shareholders.
• The transaction is expected to close in the second half of 2026, subject to customary closing conditions.
• Upon closing, the combined company will be renamed Kukugan Corp. and its shares and warrants will be listed on a national securities exchange.
• CADV.AI shareholders will receive earn-out shares upon achievement of the specified revenue milestone by December 31, 2027.

Key Dates

Recommendation

The filing outlines a standard SPAC business combination with a company in a growth sector. While the AI focus is positive, the success is contingent on future performance, achieving revenue milestones for earn-outs, and navigating regulatory hurdles. Investors should await further details on financial performance and integration post-closing before considering a stronger stance.

Keywords

Business Combination, SPAC, AI Software, Kukugan Corp., Miluna Acquisition Corp., CADV Ventures S.A., Merger, Public Listing