8-K: Rising Dragon Shareholders Approve HZJL Merger

Rising Dragon Acquisition Corp. shareholders approved all proposals for its business combination with HZJL Cayman Limited, despite a high volume of share redemptions.

Summary

• Rising Dragon Acquisition Corp. (RDAC) held an Extraordinary General Meeting (EGM) on November 20, 2025, where shareholders voted on proposals related to its business combination with HZJL Cayman Limited (HZJL).
• All six proposals, including the Reincorporation Merger, Acquisition Merger, Nasdaq listing, PubCo Charter, Director Approval, and Adjournment proposals, were approved by shareholders.
• The business combination will proceed in two steps: Rising Dragon merging into Xpand Boom Technology Inc. (PubCo), followed by PubCo's subsidiary merging into HZJL, making HZJL a wholly-owned subsidiary of PubCo.
• A quorum was met at the EGM with 5,049,309 ordinary shares voted, representing 67.33% of the 7,499,375 ordinary shares entitled to vote as of the September 11, 2025 record date.
• In connection with the EGM vote, 5,715,609 ordinary shares were tendered for redemption.
• The Company plans to close the Business Combination as soon as possible and will continue to accept reversals of redemption requests until the closing.

Sentiment

Score: 4

Explanation: While all merger-related proposals passed, the extremely high redemption rate of 5,715,609 shares (approximately 76.2% of shares entitled to vote) significantly diminishes the capital available to the combined company, which is a substantial negative factor. The ability to proceed with the merger is positive, but the financial implications of the redemptions are concerning.

Positives

• All six proposals related to the business combination with HZJL Cayman Limited were approved by shareholders at the Extraordinary General Meeting.
• The Reincorporation Merger Proposal passed with 4,775,965 votes for, 273,331 against, and 13 abstentions.
• The Acquisition Merger Proposal passed with 4,775,965 votes for, 273,331 against, and 13 abstentions.
• The Nasdaq Proposal passed with 4,775,966 votes for, 273,330 against, and 13 abstentions.
• The PubCo Charter Proposal passed with 4,775,965 votes for, 273,331 against, and 13 abstentions.
• All five proposed directors for the PubCo's board of directors (Bin Xiong, Wei Lin Yu, Jun Gang Wang, Jun Chen Sun, and Ye Liu) were approved.
• The Adjournment Proposal passed with 4,775,966 votes for, 273,330 against, and 13 abstentions.

Negatives

• A substantial number of ordinary shares, 5,715,609, were tendered for redemption, significantly reducing the cash proceeds available to the combined entity.

Risks

• The high volume of shareholder redemptions (5,715,609 shares) will significantly reduce the capital available to the combined entity, potentially impacting its financial flexibility and ability to execute strategic plans.
• Uncertainty remains regarding the final capital structure until the closing of the Business Combination, as the Company continues to accept reversals of redemption requests.

Future Outlook

The Company plans to close the Business Combination as soon as possible and will continue to accept reversals of redemption requests until the closing of the Business Combination.

Management Comments

• The Company plans to close the Business Combination as described in the proxy statement as soon as possible.
• The Company will continue to accept reversals of redemption requests until the closing of the Business Combination.

Industry Context

This filing reflects a common stage in the SPAC lifecycle where shareholder approval is sought for a de-SPAC transaction. High redemption rates are a recurring challenge for SPACs, often indicating shareholder dissatisfaction with the target company, market conditions, or a preference for cash redemption over holding shares in the combined entity. The approval of all proposals, despite significant redemptions, allows the merger to proceed, but the capital available to the combined entity will be substantially reduced.

Comparison to Industry Standards

• The 67.33% shareholder participation rate for the EGM is generally considered adequate for a SPAC vote, ensuring a quorum was met.
• The redemption rate of 5,715,609 shares out of 7,499,375 (approximately 76.2%) is significantly higher than the average SPAC redemption rates observed in recent years, which have typically ranged from 50-70% but can vary widely. This high redemption rate suggests a substantial portion of shareholders opted for cash rather than participating in the combined entity.
• For example, other SPACs like Digital World Acquisition Corp. (DWAC) and Gores Holdings VIII (GIIX) have also faced high redemption rates, impacting their post-merger capital. RDAC's redemption rate is on the higher end of this spectrum, potentially limiting the capital available to HZJL post-merger compared to initial projections.

Management Changes

Corporate Governance

Stakeholder Impact

• **Shareholders:** Those who redeemed their shares will receive cash, while those who did not will become shareholders of the combined PubCo, subject to the reduced capital base. The high redemption rate indicates a significant portion of original shareholders chose not to participate in the combined entity.
• **HZJL Cayman Limited:** The target company will become a publicly traded entity, but with potentially less capital than initially anticipated due to redemptions, which could impact its growth plans and operational flexibility.
• **Management:** The current management of Rising Dragon and the incoming management of PubCo will need to navigate the combined entity with a significantly reduced cash balance.

Next Steps

• Close the Business Combination as soon as possible.
• Continue to accept reversals of redemption requests until the closing of the Business Combination.

Key Dates

Recommendation

While the merger proposals passed, allowing the transaction to proceed, the extremely high redemption rate of over 76% is a significant concern. This drastically reduces the cash available to the combined entity, potentially impacting its future growth and operational capabilities. Investors should hold to observe the post-merger capital structure and the combined company's initial performance before making further investment decisions. The reduced capital base introduces substantial uncertainty, offsetting the positive of merger approval.

Keywords

Rising Dragon Acquisition Corp, RDAC, HZJL Cayman Limited, Business Combination, Merger, SPAC, Shareholder Vote, Redemptions, Nasdaq, Corporate Governance