RDACU to Merge with HZJL in $350M Deal, Creating 'Controlled Company'

TL;DR

**This SPAC deal is a raw deal for public shareholders, with insiders making out like bandits while retail investors get crumbs and no real say.**

AI Summary

Rising Dragon Acquisition Corp. (RDACU) is proposing a two-step business combination with HZJL Cayman Limited, valued at $350,000,000, to be paid in 35,000,000 newly issued PubCo Ordinary Shares at $10.00 per share. The transaction involves a Reincorporation Merger where RDACU merges into Xpand Boom Technology Inc. (PubCo), followed by an Acquisition Merger where Xpand Boom Solutions Inc. merges into HZJL, making HZJL a wholly-owned subsidiary of PubCo. HZJL shareholders will receive 22,708,000 PubCo Class A Ordinary Shares and 12,292,000 PubCo Class B Ordinary Shares. Additionally, Bin Xiong, HZJL's CEO, is eligible for up to 20,000,000 PubCo Class A Ordinary Shares as earn-outs if revenue targets of RMB300,000,000 and RMB600,000,000 are met in the first and second fiscal years post-closing, respectively. Upon closing, PubCo will adopt a dual-class share structure, with Class B shares carrying ten votes each, making PubCo a 'controlled company' with Bin Xiong holding approximately 80.0% to 83.1% of the voting power. RDACU's Initial Shareholders, including the Sponsor, Aurora Beacon LLC, purchased 1,437,500 founder shares for $25,000 and 254,375 Private Units for $2,543,750, and are projected to realize a profit of $8.86 per PubCo Ordinary Share, totaling $14,992,913, based on a $10.38 share price, while public shareholders would only see a $0.38 profit per share.

Why It Matters

This SPAC merger creates a new publicly traded entity, Xpand Boom Technology Inc. (PubCo), with a significant valuation of $350 million, impacting investors by offering exposure to HZJL's business. The dual-class share structure, granting Bin Xiong substantial voting control (80.0%-83.1%), means public shareholders will have limited influence on corporate governance, a critical consideration for investor rights. The substantial profit disparity between the Sponsor ($8.86 per share) and public shareholders ($0.38 per share) highlights potential conflicts of interest inherent in SPAC structures, raising questions about fairness and alignment of interests. This transaction also introduces a new player into the market, potentially increasing competition in HZJL's sector.

Risk Assessment

Risk Level: high — The risk level is high due to the significant voting control (80.0%-83.1%) held by Bin Xiong, making PubCo a 'controlled company' and exempting it from certain Nasdaq corporate governance requirements, which reduces protections for public shareholders. Furthermore, the substantial profit disparity, where the Sponsor stands to gain $8.86 per share compared to $0.38 for public shareholders, indicates a potential conflict of interest and misaligned incentives.

Analyst Insight

Investors should carefully evaluate the implications of PubCo's 'controlled company' status and the dual-class share structure on their governance rights. Consider the significant profit disparity favoring the Sponsor and assess if the long-term growth potential of HZJL justifies the reduced shareholder influence and potential dilution.

Key Numbers

• $350,000,000 — Aggregate consideration for Acquisition Merger (Paid in 35,000,000 newly issued PubCo Ordinary Shares at $10.00 per share)
• 35,000,000 — PubCo Ordinary Shares issued to HZJL shareholders (Comprising 22,708,000 Class A and 12,292,000 Class B shares)
• 20,000,000 — Potential earn-out PubCo Class A Ordinary Shares for Bin Xiong (Contingent on HZJL revenue reaching RMB300,000,000 and RMB600,000,000)
• 80.0% — Bin Xiong's voting power (no redemption scenario) (Makes PubCo a 'controlled company')
• 83.1% — Bin Xiong's voting power (maximum redemption scenario) (Reinforces 'controlled company' status)
• $25,000 — Purchase price for 1,437,500 founder shares by Sponsor (Represents approximately $0.017 per share)
• $2,543,750 — Purchase price for 254,375 Private Units by Sponsor (Purchased simultaneously with IPO closing)
• $14,992,913 — Potential aggregate profit for Initial Shareholders (Based on $10.38 per PubCo Ordinary Share closing price on September 5, 2025)
• $8.86 — Profit per PubCo Ordinary Share for Sponsor (Compared to $0.38 profit per share for public shareholders)
• RMB300,000,000 — First fiscal year revenue target for Bin Xiong's earn-out (Equivalent to approximately $41.1 million USD at current exchange rates)

Key Players & Entities

• Rising Dragon Acquisition Corp. (company) — Registrant and SPAC
• HZJL Cayman Limited (company) — Target business for acquisition
• Xpand Boom Technology Inc. (company) — Surviving publicly traded entity (PubCo)
• Bin Xiong (person) — CEO of HZJL, Chairman Designate of PubCo, and controlling shareholder
• Aurora Beacon LLC (company) — Sponsor of Rising Dragon Acquisition Corp.
• Lulu Xing (person) — CEO and Chairman of Rising Dragon Acquisition Corp., controls the Sponsor
• Loeb & Loeb LLP (company) — Location of Extraordinary General Meeting
• Nasdaq (regulator) — Stock exchange with corporate governance rules
• SEC (regulator) — Securities and Exchange Commission
• Xpand Boom Solutions Inc. (company) — Wholly owned subsidiary of PubCo, merging with HZJL

FAQ

Risk Factors

• Dual-Class Share Structure and Controlled Company Status [high — regulatory]: PubCo will adopt a dual-class share structure with Class B shares carrying ten votes each. This structure will result in Bin Xiong holding approximately 80.0% to 83.1% of the voting power, making PubCo a 'controlled company'. This concentration of voting power can limit the influence of other shareholders and may deter potential future acquisitions or strategic transactions.
• Earn-out Contingencies and Revenue Targets [medium — financial]: Bin Xiong is eligible for up to 20,000,000 PubCo Class A Ordinary Shares as earn-outs, contingent on HZJL achieving revenue targets of RMB300,000,000 (approx. $41.1M USD) and RMB600,000,000 (approx. $82.2M USD) in the first and second fiscal years post-closing, respectively. Failure to meet these targets means these shares will not be issued, impacting potential dilution and executive compensation.
• Disproportionate Profit for Initial Shareholders [medium — financial]: RDACU's Initial Shareholders, including the Sponsor, purchased founder shares for $25,000 and private units for $2,543,750. They are projected to realize a profit of $8.86 per PubCo Ordinary Share, totaling $14,992,913, based on a $10.38 share price. This contrasts sharply with the projected $0.38 profit per share for public shareholders, indicating a significant benefit for insiders.
• Reliance on HZJL's Future Performance [high — market]: The success of the business combination is heavily dependent on the future revenue and performance of HZJL. The earn-out structure highlights this reliance, with significant share issuances tied to HZJL meeting specific revenue milestones. Any underperformance by HZJL could negatively impact PubCo's valuation and shareholder returns.
• Integration Risks Post-Combination [medium — operational]: The transaction involves merging RDACU with Xpand Boom Technology Inc. (PubCo) and then acquiring HZJL. The success of this two-step business combination relies on effective integration of operations, management, and financial systems between the SPAC and HZJL. Any integration challenges could lead to operational disruptions and hinder value creation.

Industry Context

Rising Dragon Acquisition Corp. operates in the Special Purpose Acquisition Company (SPAC) sector, which facilitates the public listing of private companies. The current market for SPACs is characterized by increased regulatory scrutiny and a more challenging environment for closing de-SPAC transactions compared to previous years. Companies seeking to go public via SPACs often do so to bypass the traditional IPO process, but must still demonstrate strong underlying business fundamentals and growth prospects to attract and retain investor confidence.

Regulatory Implications

The proposed dual-class share structure will result in PubCo being classified as a 'controlled company,' potentially exempting it from certain Nasdaq listing rules regarding independent board directors and compensation committees. This structure, along with the significant voting power held by Bin Xiong, could attract scrutiny from investors and regulators concerned about corporate governance and minority shareholder rights.

What Investors Should Do

1. Review the earn-out provisions carefully.
2. Analyze the disproportionate profit for initial shareholders.
3. Understand the implications of the controlled company status.
4. Assess HZJL's business plan and revenue projections.

Key Dates

• 2025-01-27: Merger Agreement Signed — Marks the formal agreement between Rising Dragon Acquisition Corp. and HZJL Cayman Limited for the business combination.
• 2025-09-26: Proxy Statement/Prospectus Dated — Official filing date of the document detailing the proposed business combination and seeking shareholder approval.
• 2025-09-29: First Mailed to Shareholders — Shareholders begin receiving the proxy materials, initiating the period for review and decision-making before the meeting.
• 2025-10-20: Extraordinary General Meeting — Shareholders of Rising Dragon Acquisition Corp. will vote on the proposed business combination and related proposals.

Glossary

DEF 14A

A filing with the U.S. Securities and Exchange Commission (SEC) that provides detailed information to shareholders about matters to be voted on at a special meeting of shareholders. (This document is the primary source of information regarding the proposed business combination between Rising Dragon Acquisition Corp. and HZJL.)

Blank Check Company

A shell corporation that is set up to acquire or merge with an existing company, allowing the target company to become publicly traded without a traditional IPO. (Rising Dragon Acquisition Corp. is a blank check company formed for the purpose of effecting a business combination.)

Business Combination

The merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization, or similar business combination with one or more businesses or entities. (This is the overarching transaction that Rising Dragon Acquisition Corp. is undertaking with HZJL.)

PubCo

The publicly traded entity that will survive the Reincorporation Merger and will be the parent company of HZJL after the Acquisition Merger. (PubCo is the entity whose shares will be held by the combined company's shareholders post-transaction.)

Dual-Class Share Structure

A corporate structure where a company issues different classes of shares with different voting rights. Typically, one class has superior voting rights. (PubCo will adopt a dual-class structure (Class A and Class B shares) where Class B shares have ten votes each, creating a controlled company.)

Earn-out Shares

Additional shares issued to a seller of a business contingent upon the business achieving certain performance targets after the acquisition. (Bin Xiong is eligible to receive up to 20,000,000 earn-out shares based on HZJL's future revenue performance.)

Controlled Company

A company where more than 50% of the voting power is held by an individual, a group, or another company. Listed companies may be exempt from certain corporate governance rules. (The dual-class share structure will make PubCo a controlled company, with Bin Xiong holding a significant majority of the voting power.)

Redemption Rights

The right of shareholders of a special purpose acquisition company (SPAC) to redeem their shares for cash prior to or in connection with a business combination. (Shareholders of Rising Dragon Acquisition Corp. have the option to redeem their shares, which impacts the pro forma ownership percentages.)

Year-Over-Year Comparison

This is the initial DEF 14A filing for the proposed business combination between Rising Dragon Acquisition Corp. and HZJL Cayman Limited. Therefore, there are no prior year metrics or risk factors to compare against within this specific filing. The document outlines the terms of the transaction, including the share exchange ratios, earn-out provisions, and the adoption of a dual-class share structure, which are new developments for the combined entity.

Key Financial Figures

• $350,000,000 — ideration for the Acquisition Merger is $350,000,000, payable in the form of 35,000,000 newl
• $10.00 — e " Closing Payment Shares ") valued at $10.00 per share to HZJL and its shareholders.
• $0.0001 — ass A ordinary shares of a par value of $0.0001 each of PubCo (the " PubCo Class A Ordi
• $14.6 million — te redemption payments of approximately $14.6 million using a per-share redemption price of $
• $10.14 — n using a per-share redemption price of $10.14. (3) Under 50% Redemption Scenario,
• $29.2 million — te redemption payments of approximately $29.2 million using a per-share redemption price of $
• $43.7 million — te redemption payments of approximately $43.7 million using a per-share redemption price of $
• $55.6 million — te redemption payments of approximately $55.6 million using a per-share redemption price of $
• $25,000 — nsor for an aggregate purchase price of $25,000. RDAC has agreed to reimburse the Spo
• $2,543,750 — nits for an aggregate purchase price of $2,543,750. Upon the consummation of the Busines
• $10.38 — , based on an estimated market price of $10.38 per PubCo Ordinary Share (i.e. being RD
• $17,561,663 — ry Shares owned by the Sponsor would be $17,561,663 and the Sponsor would have a potential
• $14,992,913 — ld have a potential aggregate profit of $14,992,913, representing a profit of $8.86 per Pub
• $8.86 — f $14,992,913, representing a profit of $8.86 per PubCo Ordinary Share, whereas other
• $0.38 — sing Dragon would only have a profit of $0.38 per PubCo Ordinary Share. In order to

Filing Documents

• formdef14a.htm (DEF 14A) — 6278KB
• chart_004.jpg (GRAPHIC) — 163KB
• chart_001.jpg (GRAPHIC) — 44KB
• chart_002.jpg (GRAPHIC) — 32KB
• chart_003.jpg (GRAPHIC) — 32KB
• chart_005.jpg (GRAPHIC) — 126KB
• fin_003.jpg (GRAPHIC) — 4KB
• 0001493152-25-015752.txt ( ) — 6832KB

From the Filing

DEF 14A 1 formdef14a.htm DEF 14A UNITED SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy of the Securities Exchange Act of 1934 Filed by the Registrant Filed by a Party other than the Registrant Check the appropriate box: Preliminary Proxy Statement Confidential, for the use of the Commission only (as permitted by Rule 14a-6(e)(2)) Definitive Proxy Statement Definitive Additional Materials Soliciting Material Pursuant to §240.14a-12 RISING DRAGON ACQUISITION CORP. (Name of Registrant as Specified in its Charter) (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): No fee required. Fee paid previously with preliminary materials. Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 PROXY RISING DRAGON ACQUISITION CORP. AND PROSPECTUS FOR ORDINARY SHARES OF XPAND BOOM TECHNOLOGY INC. Proxy and first mailed to the shareholders of Rising Dragon Acquisition Corp. on or about September 29, 2025 To the Shareholders of Rising Dragon Acquisition Corp.: You are cordially invited to attend the Extraordinary General Meeting of the Shareholders of Rising Dragon Acquisition Corp. (" Rising Dragon ", " RDAC " " we ", " our ", or " us " under any paragraphs regarding Rising Dragon Acquisition Corp.), which will be held at, 10 a.m. Eastern Time, on October 20, 2025 (the " Extraordinary General Meeting "), or at such other time and on such other date to which the meeting may be postponed or adjourned. RDAC will be holding the Extraordinary General Meeting at the offices of Loeb & Loeb LLP, 345 Park Avenue, New York, NY 10154, and virtually via teleconference using the following dial-in information: Within the U.S. and Canada Toll Free 1 800-450-7155 (toll-free) Outside of the U.S. and Canada +1 857-999-9155 (standard rates apply) Participant Passcode 8029046# Rising Dragon is a Cayman Islands exempted company incorporated as a blank check company for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities, which RDAC refers to as a " target business ." The business combination will be completed through a two-step process consisting of the Reincorporation Merger (as defined below) and the Acquisition Merger (as defined below). The Reincorporation Merger and the Acquisition Merger are collectively referred to herein as the " Business Combination ." Rising Dragon has entered into an agreement and plan of merger, dated as of January 27, 2025 (as it may be amended from time to time, the " Merger Agreement "), which provides for a Business Combination between Rising Dragon and HZJL Cayman Limited, a Cayman Islands exempted company (" HZJL "). Pursuant to the Merger Agreement, the Business Combination will be effected in two steps: (i) Rising Dragon will merge with and into Xpand Boom Technology Inc., a Cayman Islands exempted company and wholly owned subsidiary of Rising Dragon (" PubCo "), with PubCo remaining as the surviving publicly traded entity (the " Reincorporation Merger "), and PubCo as the surviving company after the Reincorporation Merger is hereinafter referred to, after the effective time of the Reincorporation Merger, as the "PubCo" or " Reincorporation Surviving Corporation "; (ii) immediately following the Reincorporation Merger, Xpand Boom Solutions Inc. (" Merger Sub "), a Cayman Islands exempted company and wholly owned subsidiary of PubCo, will be merged with and into HZJL, resulting in HZJL being a wholly owned subsidiary of PubCo (the " Acquisition Merger "). The Merger Agreement is by and among Rising Dragon, PubCo, Merger Sub, HZJL, certain shareholder of HZJL (" Principal Shareholder ") and Bin Xiong, an individual as the representative of Principal Shareholder of HZJL (" Principal Shareholder' Representative "). The aggregate consideration for the Acquisition Merger is $350,000,000, payable in the form of 35,000,000 newly issued PubCo Ordinary Shares (the " Closing Payment Shares ") valued at $10.00 per share to HZJL and its shareholders. At the closing of the Acquisition Merger, the issued and outstanding shares in HZJL held by the former HZJL shareholders will be cancelled and cease to exist, in exchange for the issuance of an aggregate of 22,708,000 class A ordinary shares of a par value of $0.0001 each of PubCo (the " PubCo Class A Ordinary Shares ") and 12,292,000 class B ordinary shares of a par value of $0.0001 each of PubCo (the " PubCo Class B Ordinary Shares, " together with PubCo Class A Ordinary Shares, collectively " PubCo Ordinary Shares "). At the closing of the Acquisition Merger, the one fully paid share in Merger Sub held by PubCo will become one fully

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