425: Wintergreen SPAC to Merge with KIKA Technology in $80M Deal

Wintergreen Acquisition Corp. announced a definitive merger agreement with KIKA Technology INC., valuing KIKA at $80 million, with the combined entity to be named KIKA Inc. and expected to close in H1 2026.

Summary

• Wintergreen Acquisition Corp. (SPAC) has entered into a Merger Agreement with KIKA Technology INC. (KIKA) and its wholly-owned subsidiary, Wintergreen Acquisition Merger Subsidiary Corp.
• The Merger Sub will merge into KIKA, with KIKA surviving as a wholly-owned subsidiary of the SPAC.
• Upon closing, the SPAC will change its name to KIKA Inc. or another name determined by KIKA.
• The transaction is intended to qualify as a reorganization under Section 368(a) of the Internal Revenue Code.
• KIKA shareholders will receive 7,980,050 ordinary shares of the SPAC (Consideration Shares) based on KIKA's $80,000,000 valuation divided by the SPAC Per Share Redemption Price (lower of redemption price or $10.025).
• The closing is expected to occur in the first half of 2026, subject to shareholder approvals, SEC effectiveness of the S-4, governmental approvals, and the SPAC having at least $5,000,001 in net tangible assets post-closing.
• KIKA's two shareholders, UHAP Technology Ltd (87%) and WU YUE INVESTMENT LTD (13%), have signed a Company Transaction Support Agreement to vote in favor of the merger.
• KIKA shareholders will also enter into six-month lock-up agreements and two-year non-compete and non-solicitation agreements post-closing.
• The SPAC's Trust Account holds at least $55,950,000 as of the agreement date, which will be used for redemptions, deferred underwriting commissions, transaction expenses, and the balance for KIKA's working capital.
• KIKA will provide PCAOB-reviewed financial statements for fiscal years ended June 30, 2024, and June 30, 2025, by February 28, 2026.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. A definitive merger agreement has been reached, providing clarity on the SPAC's path forward. The valuation is set, and key shareholder support is secured. However, the lack of current financial details for KIKA and the reliance on future conditions (SEC effectiveness, shareholder approvals, net tangible assets) introduce some uncertainty. The absence of material IP ownership for KIKA is a notable concern for a technology company.

Positives

• The definitive merger agreement provides a clear path for KIKA Technology to become a publicly traded entity through Wintergreen Acquisition Corp.
• KIKA's valuation is set at $80,000,000, providing a specific benchmark for the transaction.
• The transaction is structured to qualify as a tax-free reorganization under Section 368(a) of the Code, which can be beneficial for shareholders.
• Key KIKA shareholders have already committed to voting in favor of the merger via a Transaction Support Agreement, indicating strong internal support.
• Post-closing, the SPAC's board will include four KIKA-designated directors, ensuring KIKA's strategic direction is maintained.
• The SPAC has a substantial Trust Account balance of at least $55,950,000 to support the transaction and provide working capital for the combined entity.

Negatives

• The filing does not provide KIKA's current financial performance (revenue, profit, etc.), making it difficult to assess the $80 million valuation in context.
• The SPAC's net tangible assets must be at least $5,000,001 immediately after closing, which could be impacted by shareholder redemptions.
• KIKA does not own any material Intellectual Property, which could be a long-term vulnerability for a technology company.
• The closing is not guaranteed and is subject to multiple conditions, including regulatory approvals and shareholder votes, which could lead to delays or termination.

Risks

• Failure to obtain requisite approvals from shareholders of both Wintergreen Acquisition Corp. and KIKA Technology INC.
• Inability to obtain the declaration of effectiveness by the SEC of the proxy/registration statement on Form S-4.
• Failure to receive required governmental approvals or the issuance of any order, law, or regulation enjoining or prohibiting the merger.
• Wintergreen Acquisition Corp. not having at least $5,000,001 in net tangible assets immediately after the closing, potentially due to high shareholder redemptions.
• Material adverse effects on either Wintergreen Acquisition Corp. or KIKA Technology INC. prior to closing.
• KIKA Technology INC. does not own any material Intellectual Property, which could pose competitive or operational risks.
• The transaction is subject to general economic or political conditions, industry-wide impacts, changes in financial markets, acts of war or terrorism, and changes in laws or accounting rules, which are excluded from the definition of a 'Company Material Adverse Effect' but still pose risks.

Future Outlook

The merger is expected to close in the first half of 2026, subject to various conditions including shareholder and regulatory approvals. Post-closing, Wintergreen Acquisition Corp. will change its name to KIKA Inc., and KIKA Technology INC. will operate as its wholly-owned subsidiary. The combined entity will benefit from the SPAC's remaining trust funds for working capital and general corporate purposes. KIKA is committed to providing PCAOB-reviewed financials by February 28, 2026, which will offer more insight into its historical performance.

Management Comments

• Yongfang Fayer Yao, CEO and Director of Wintergreen Acquisition Corp., signed the report on behalf of the registrant.
• Dong Han, Director of KIKA Technology INC., signed the Merger Agreement on behalf of KIKA.

Industry Context

This transaction represents a typical de-SPAC merger, where a Special Purpose Acquisition Company (SPAC) acquires a private company to take it public. The target, KIKA Technology INC., is a Cayman Islands exempted company with subsidiaries in the British Virgin Islands and Hong Kong, suggesting an international technology focus. The valuation of $80 million for KIKA, without immediate detailed financial disclosures, places it in the small-cap technology acquisition space. The requirement for PCAOB-reviewed financials indicates a move towards U.S. public company standards, common for foreign private issuers listing in the U.S. The non-compete and lock-up agreements for KIKA's shareholders are standard practice to ensure stability and alignment post-merger.

Comparison to Industry Standards

• The SPAC structure, including the trust account and redemption rights, aligns with standard industry practices for blank check companies seeking a business combination.
• The requirement for KIKA to provide PCAOB-reviewed financial statements is a standard for companies seeking to list on U.S. exchanges, ensuring compliance with U.S. accounting and auditing standards, comparable to other foreign private issuers entering the U.S. market.
• The six-month lock-up period for KIKA shareholders on Consideration Shares is a common industry practice to prevent immediate selling pressure post-merger and demonstrate commitment from existing owners.
• The two-year non-compete and non-solicitation agreements for KIKA shareholders are standard in M&A transactions to protect the acquired business's goodwill and customer/employee relationships, similar to agreements seen in acquisitions of private technology companies by larger entities like Microsoft acquiring Activision Blizzard or Salesforce acquiring Slack, though on a much smaller scale.
• The $5,000,001 net tangible asset requirement for the SPAC post-closing is a standard Nasdaq listing requirement for de-SPAC transactions, ensuring the combined entity meets minimum financial thresholds for continued listing.

Management Changes

Corporate Governance

Legal Proceedings

• No Action (or any basis therefore) pending against, or to the knowledge of the Company, threatened against or affecting, the Company, any of its officers or directors, its business, or any Company Shares, or any of the Company's assets or any Contract before any court, Authority or official, other than as would not reasonably be expected to have a Company Material Adverse Effect.
• No outstanding judgments against the Company that would reasonably be expected to have a Company Material Adverse Effect.
• The Company has not been subject to any proceeding with any Authority in the past two years, other than as would not reasonably be expected to have a Company Material Adverse Effect.

Related Party Transactions

• KIKA's shareholders (UHAP Technology Ltd and WU YUE INVESTMENT LTD) are parties to the Company Transaction Support Agreement, Lock Up Agreement, and Non-Compete and Non-Solicitation Agreement, which are related party transactions essential to the merger.

Stakeholder Impact

• **Shareholders (Wintergreen Acquisition Corp.)**: Will become shareholders of KIKA Inc., with their investment now tied to KIKA's business performance. They have redemption rights prior to closing.
• **Shareholders (KIKA Technology INC.)**: Will exchange their KIKA shares for ordinary shares of the publicly traded KIKA Inc., subject to a six-month lock-up period and two-year non-compete/non-solicitation agreements.
• **Employees (KIKA Technology INC.)**: The merger is expected to continue KIKA's business operations, potentially offering new opportunities as a public company. Non-solicitation clauses protect the employee base.
• **Customers/Suppliers (KIKA Technology INC.)**: The non-solicitation agreement aims to preserve existing business relationships, suggesting continuity in operations and partnerships.
• **Creditors (Wintergreen Acquisition Corp.)**: The Trust Account funds will first satisfy redemptions and deferred underwriting commissions, then transaction expenses, before the balance is used for KIKA's working capital, impacting the funds available to the combined entity.

Next Steps

• Wintergreen Acquisition Corp. will prepare and file a registration statement on Form S-4 with the SEC, including a preliminary proxy statement/prospectus.
• The SEC must declare the Form S-4 effective.
• Wintergreen Acquisition Corp. will mail a definitive proxy statement/prospectus to its shareholders.
• Wintergreen Acquisition Corp. will hold an extraordinary general meeting of shareholders to vote on the Transaction Proposals, including the Business Combination, name change, organizational document amendments, and director/officer appointments.
• KIKA Technology INC. will obtain its shareholder approval via written resolutions.
• KIKA Technology INC. will deliver PCAOB-reviewed financial statements for fiscal years ended June 30, 2024, and June 30, 2025, by February 28, 2026.
• The parties will work to obtain any required governmental approvals.
• The closing of the merger is expected to occur in the first half of 2026.
• Upon closing, Wintergreen Acquisition Corp. will change its name to KIKA Inc. and update its organizational documents and board/officer composition.

Key Dates

Recommendation

The announcement of a definitive merger agreement is a significant step for Wintergreen Acquisition Corp., providing a clear path for its business combination. The $80 million valuation for KIKA Technology INC. is established, and key shareholder support is secured. However, the absence of detailed current financial performance for KIKA in this filing makes a strong 'buy' recommendation premature. Investors should 'hold' and await the filing of the Form S-4 and KIKA's PCAOB-reviewed financials, which are due by February 28, 2026, to gain a comprehensive understanding of KIKA's financial health and growth prospects before making further investment decisions. The lack of material IP ownership for KIKA is also a factor warranting caution.

Keywords

SPAC, Merger Agreement, KIKA Technology, Wintergreen Acquisition Corp, Business Combination, De-SPAC, Technology, Public Listing, SEC Filing, Form 425