YHN Acquisition I Ltd 10-K for FY2025
YHN Acquisition I Ltd (YHNA)
About this 10-K
YHN Acquisition I Ltd filed this 10-K on March 31, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net income
- $1.33M
- up 163.6% from net income of $502.64K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the fiscal year ended
or
For the transition period from ______________ to ______________
Commission file
number
(Exact Name of Registrant as Specified in Its Charter)
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| State or Other Jurisdiction of Incorporation or Organization |
I.R.S. Employer Identification No. |
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| Address of Principal Executive Offices | Zip Code |
Registrant’s telephone
number, including area code: +
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The Stock Market LLC | ||||
| The Stock Market LLC | ||||
| The |
Securities registered pursuant to Section 12g of the Act: None
Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐;
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐;
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
The
aggregate market value of the registrant’s ordinary shares outstanding at June 30, 2025, other than ordinary shares held by persons
who may be deemed affiliates of the registrant, was $
As of March 9, 2026, there were ordinary shares of the Registrant, no par value, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
DEFINED TERMS
Unless otherwise stated in this annual report on Form 10-K for the year ended December 31, 2025 (this “Form 10-K”), references to:
| ● | “BVI” refers to the British Virgin Islands; |
| ● | “Companies Act” and the “Insolvency Act” refer to the BVI Business Companies Act, 2004 and the Insolvency Act, 2003 of the British Virgin Islands, respectively and in each case as the same may be amended and supplemented from time to time; |
| ● | “fourth amended and restated memorandum and articles of association” refers to our Fourth Amended and Restated Memorandum and Articles of Association, adopted by the Company; |
| ● | “initial shareholders” refers to all of our shareholders immediately prior to our IPO, including all of our officers and directors to the extent they hold such shares; |
| ● | “insider shares” refers to the 1,500,000 ordinary shares held by our initial shareholders; |
| ● | “IPO” refers to our initial public offering of 6,000,000 units that was consummated on September 19, 2024; |
| ● | “letter agreements” refer to the agreements executed among us, the underwriters, our officers, directors and other initial shareholders on September 17, 2024; |
| ● | “PRC” or “China” refers to the People’s Republic of China. |
| ● | “private rights” refers to the rights included in the private units; |
| ● | “private units” refers to the units issued in a private placement simultaneously with the closing of the IPO; |
| ● | “public shareholders” means the holders of the public shares, whether they are purchased in the public offering or in the aftermarket, including any of our initial shareholders to the extent that they purchase such public shares (except that our initial shareholders will not have conversion or tender rights with respect to any public shares they own); |
| ● | “public shares” refers to ordinary shares which are being sold as part of the units in the IPO (whether they are purchased in the IPO or thereafter in the open market); |
| ● | “rights” or “public rights” refer to the rights which are being sold as part of the units in the IPO; |
| ● | “sponsor” refers to YHN Partners I Limited; |
| ● | “US Dollars” and “$” refer to the legal currency of the United States; and | |
| ● | “YHN,” “we,” “us” or “our company” refers to YHN Acquisition I Limited. |
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TABLE OF CONTENTS
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CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
The statements contained in this Form 10-K that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our Management’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Form 10-K may include, for example, statements about:
| ● | our ability to complete our Business Combination; |
| ● | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our Business Combination; |
| ● | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our Business Combination, as a result of which they would then receive expense reimbursements and other benefits; |
| ● | our potential ability to obtain additional financing to complete a Business Combination; |
| ● | our pool of prospective target businesses; |
| ● | the ability of our officers and directors to generate a number of potential investment opportunities; |
| ● | potential changes in control of us if we acquire one or more target businesses for stock; |
| ● | our public securities’ potential liquidity and trading; |
| ● | our expectations regarding the time during which we will be an “emerging growth company” under the JOBS Act; |
| ● | our use of proceeds not held in the trust account; or |
| ● | our financial performance, including following our Business Combination. |
The forward-looking statements contained in this Form 10-K are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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PART I
ITEM 1. BUSINESS
General
We are a newly incorporated blank check company formed in the British Virgin Islands as a business company with limited liability (meaning that our public shareholders have no liability, as shareholders of our company, for the liabilities of our company over and above the amount paid for their shares). We were formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities, which we refer to as a “target business.”
We are based in Hong Kong. Our principal office is located in Hong Kong and our sponsor and a majority of our executive officers and directors are based in or have significant ties to the mainland China and/or Hong Kong. In addition, we may pursue or consummate an initial business combination with a company located or doing business in the PRC (including Hong Kong and Macau). Given the risks relating to doing business in Hong Kong and/or the PRC, we may be a less attractive partner to non-PRC or non-Hong Kong based target companies as compared to other SPACs that do not have ties to Hong Kong or the PRC, which may therefore limit the pool of acquisition candidates.
Our efforts to identify a prospective target business will not be limited to a particular industry or geographic location.
Business Combination Agreement with Mingde Technology Limited
On April 3, 2025, YHN has entered into a business combination agreement with Mingde Technology Limited, a Cayman Islands company (“Mingde”), (as amended and restated on June 3, 2025 and as further amended by Amendment No. 1 and Amendment No. 2 thereto and may be further amended from time to time, the “Business Combination Agreement”), which provides for a business combination between YHN and Mingde (the “Business Combination”). Pursuant to the Business Combination Agreement, the Business Combination will be effected in two steps: (i) subject to the approval of the Reincorporation Merger and the relevant plan and articles of merger by the shareholders of YHN, YHN will merge with and into YHNA MS I LIMITED, a Cayman Islands exempted company incorporated as a wholly owned subsidiary of YHN (such company before the Business Combination is referred to as “NewCo” or “Purchaser” and upon and following the Acquisition Merger is hereinafter sometimes referred to as “PubCo”), with NewCo remaining as the surviving publicly traded entity (the “Reincorporation Merger”); (ii) as soon as practicable promptly after the Reincorporation Merger, YHNA MS II Limited (“Merger Sub”), a Cayman Islands exempted company incorporated as a wholly owned subsidiary of NewCo, will be merged with and into Mingde, with Mingde remaining as the surviving entity, resulting in Mingde being a wholly owned subsidiary of PubCo (the “Acquisition Merger”).
The aggregate consideration for the Acquisition Merger (the “Merger Consideration”) is $200,000,000 plus up to $80,000,000 worth of Earnout Consideration Shares (as defined below). The Merger Consideration will be paid in the form of (1) 20,000,000 newly issued ordinary shares, par value of $0.001 each, of PubCo (“PubCo Ordinary Shares”) valued at $10.00 per share, which is comprised of (A) 19,000,000 PubCo Ordinary Shares (the “Closing Payment Shares”) which shall be issued at the Closing and (B) 1,000,000 PubCo Ordinary Shares (the “Holdback Shares”) which shall be issued at the Closing and are subject to surrender and forfeiture for indemnification obligations under the Business Combination Agreement; and (2) an addition of up to 8,000,000 PubCo Ordinary Shares, for a total of $80,000,000 as additional contingent consideration (“Earnout Consideration Shares”, together with the Closing Payment Shares and the Holdback Shares, the “Merger Consideration Shares”).
The Earnout Consideration Shares can be earned for meeting three earnout milestones and, if such milestones are achieved, will be released to the Mingde shareholders over a three-year period following the closing date of the Business Combination as follows:
| · | First Earnout Milestone – 3,000,000 Earnout Consideration Shares shall become payable upon the closing price of PubCo’s ordinary shares, as reported on The Nasdaq Stock Market LLC (or any other national securities exchange on which such shares are then listed), reaching or exceeding $15.00 per share for 60 consecutive trading days occurring at any time during the three-year period commencing on the closing date. |
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| · | Second Earnout Milestone – 3,000,000 Earnout Consideration Shares shall become payable upon the closing price of PubCo’s ordinary shares, as reported on The Nasdaq Stock Market LLC (or any other national securities exchange on which such shares are then listed), reaching or exceeding $20.00 per share for 60 consecutive trading days occurring at any time during the three-year period commencing on the closing date. |
| · | Third Earnout Milestone – 2,000,000 Earnout Consideration Shares shall become payable upon the closing price of PubCo’s ordinary shares, as reported on The Nasdaq Stock Market LLC (or any other national securities exchange on which such shares are then listed), reaching or exceeding $25.00 per share for 60 consecutive trading days occurring at any time during the three-year period commencing on the closing date. |
For the avoidance of doubt, any of the above earnout milestones can be achieved over periods of 60 consecutive trading days that overlap in whole or in part.
On June 3, 2025, the parties to the Business Combination Agreement entered into an amended and restated Business Combination Agreement to refine the Merger Consideration components and to incorporate mechanisms for the Earnout Consideration Shares.
On November 7, 2025, the parties to the amended and restated Business Combination Agreement entered into Amendment No. 1 to the amended and restated Business Combination Agreement to further adjust the aggregate consideration for the Acquisition Merger and to adjust mechanisms for the Earnout Consideration Shares.
On December 8, 2025, the Company had entered into an amendment (the “Trust Amendment”) to the investment management trust agreement, dated as of September 17, 2024, by and between the Company and Continental Stock Transfer & Trust Company, to provide the Company with the discretion to extend the date on which to commence liquidating the trust account (the “Trust Account”) established in connection with the Company’s initial public offering (the “IPO”) by three (3) times for an additional three (3) months each time from December 19, 2025 to September 19, 2026 by depositing into the trust account an aggregate amount of $150,000 for each three-month extension. The Company filed the fourth amended and restated memorandum and articles of association on December 8, 2025, giving the Company the right to extend the date by which the Company has to consummate a business combination from December 19, 2025 (the date that is 15 months from the closing date of the IPO) to September 19, 2026 (the date that is 24 months from the closing date of the IPO).
On December 15, 2025, the parties to the Business Combination Agreement further entered into an Amendment No. 2 to the Business Combination Agreement, which serves to amend the Business Combination Agreement to extend the Outside Closing Date (as defined in the Business Combination Agreement) to June 19, 2026.
On April 29, 2025, each of NewCo and Merger Sub was incorporated under the laws of the Cayman Islands as an exempted company. On May 8, 2025, each of NewCo, Merger Sub, YHN and Mingde executed that certain Joinder Agreement to the Business Combination Agreement (the “Joinder Agreement”), whereby each of NewCo and Merger Sub have agreed, effective upon execution, that it shall become a party to the Business Combination Agreement and shall be fully bound by, and subject to, all of the covenants, terms, representations, warranties, rights, obligations and conditions of the Business Combination Agreement as though an original party thereto.
For further details about the Business Combination Agreement, please refer to the registration statement on Form F-4 (Registration No. 333-287849) filed by YHNA MS I LIMITED with the SEC.
PIPE Investment
In connection with the transactions contemplated by the Business Combination Agreement, it is expected that YHN will use commercially reasonable efforts to enter into subscription agreements, in the form and substance as reasonably agreed upon by YHN and Mingde (the “Subscription Agreements”), with certain investors providing for aggregate investments in of YHNA Shares through private placement, and/or backstop or redemption waiver arrangements with potential investors, in an aggregate amount to exceed Ten Million Dollars ($10,000,000) at a price per share not less than $9.00, in each case on terms mutually agreeable to the YHN and Mingde (the “PIPE Investment”). Mingde shall, and shall cause its affiliates to, use commercially reasonable efforts to cause their respective representatives to, cooperate with YHN and their respective representatives in connection with such PIPE Investment.
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Competitive Strengths
We intend to capitalize on our competitive advantages, as described below, to find a suitable target company:
Experienced Management Team
We have a strong team with years of operational, financial and leadership experience successfully managing and running a variety of corporations in Asia.
Our Chief Executive Officer Ms. Christy Poon brings extensive expertise in mergers & acquisitions, intellectual property, public relations, and media marketing. She is a Partner at Norwich Capital Limited, where she oversees corporate reorganization, fundraising, IP asset management, and advisory on U.S. public listings across Asia. Her prior leadership roles include Vice President of Corporate Affairs & Operations at XIC Innovation Limited and General Manager positions at JM Production and JM Network, complemented by early experience in public relations and advanced academic credentials in business, communications, and mediation.
Ms. Yangyujia An, our Chief Financial Officer, is the vice-chairperson of Norwich Capital Limited, a boutique firm that focuses on SPACs and provides services including sponsoring and listing support of SPACs. Prior to that, she also worked as an investment manager at Norwich Investment Limited. We believe that Ms. An’s experiences, in particular those in relation to SPACs, will be valuable for our initial business combination activities.
Our management team has been actively involved in operating, advising, and expanding many companies. Their executive leadership, operational oversight, strategic management will boost investor confidence in the team’s ability to complete a successful business combination. We believe our management team is well-positioned to take advantage of growing acquisition opportunities.
Strong Board of Directors
We have recruited an accomplished group of leaders to serve as members of our board of directors. Our board of directors comes from a plethora of industries where they serve as leaders, advisors, directors, and board members for public companies, private companies, and leading venture capital firms in Asia.
Mr. Zhengming Feng, our chairman and independent director, was a former Managing Director of SB China Venture Capital (SBCVC), a leading venture capital firm that manages both USD and RMB funds investing in high-tech, high growth companies in TMT, clean technology, healthcare, consumer/retail, and advanced manufacturing. His skills in managing businesses, investment, and strategic management will be a great asset for the target company.
Mr. Donghui Xu, one of our independent directors, has an extensive background in investment, private equity, and the venture capital industry. We hope to leverage his leadership experience in multiple prominent companies to support our management team as they guide the target company into public markets.
Ms. Min Zhang, one of our independent directors, has strong expertise in SPAC and IPO listings. Her prior experience with de-SPAC transactions will add great value as we identify and pursue potential targets to complete a business combination.
Our team has extensive experience in identifying, screening, acquiring, and managing companies. We believe these are the skill sets that are essential for a successful management team. With our board of directors’ deep understanding and experience of various industries, we could effectively position our investment strategy, evaluation of potential acquisition candidates and complete our initial business combination.
Strong and Extensive Network to Source a Suitable Target Company
We believe our team’s operating and transaction experience and relationships with companies will provide us with many potential business combination targets. Over the course of their careers, they have served in a variety of capacities, allowing them to expand their network in both Asia and the United States. These contacts and sources include those in government, private and public companies, private equity and venture capital funds, investment bankers, attorneys, and accountants.
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Strong M&A Expertise and de-SPAC Experience
In addition to supporting us in the areas of investment strategy and improving the company’s processes, our team also has experience in M&A and fundraising. Our team consists of seasoned professionals with significant M&A, capital markets, finance, and private equity experience across a wide variety of industries and market conditions and have proven track records of producing high returns for investors.
Acquisition Strategy and Investment Criteria
Our efforts to identify a prospective target business will not be limited to any particular industry or geographic region.
We intend to look for target company which possesses the following core values:
| ● | Strong management team: We are looking for a strong group of individuals who have a strong track record of creating value. We will assess their leadership capabilities and their ability to grow the company. |
| ● | Strong portfolio of investors: We seek a company that has well-known and trusted investors, hedge funds and private equity firms supporting them. This is an indication of investors’ confidence in the company’s potential to grow. |
| ● | Potential to have recurring revenue: We are looking for a company that is currently generating or will generate significant cash flow through existing products, new product development, increased efficiency, and reduced costs. |
| ● | Benefits from being publicly traded: We intend to acquire a company that will effectively utilize their public profile to get access to capital, expand their customer base, improve their investor portfolio to grow. |
| ● | Appropriate valuations and upside potential: We will conduct rigorous due diligence and apply valuation-metrics to create the most appropriate valuation for the company. We are seeking to acquire a company that will have a strong upside potential to increase their valuation. |
| ● | Strategic management and long-term planning: We intend to acquire a company which strategically plan ahead and are continually assessing and ensuring that their work is aligned with their strategic goals. Long-term planning allows companies to have sustainable operations in the long run and ensures that they can deliver on their promises to the investors. |
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| ● | Innovative-led approach and risk management: We believe that balancing risk and encouraging creative insights will drive a company’s growth and that differentiated ideas bring new categories into the market to address growing customer needs. Therefore, we are seeking for a company that prioritizes innovation and can recognize which ideas to support and scale. |
Our sponsor believes that conducting comprehensive due diligence on prospective investments is particularly important within the technology industry. In evaluating a prospective initial business combination, we expect to conduct a thorough diligence review that will encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, financial analyses, and technology reviews, as well as a review of other information that will be made available to us.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, our officers, or our directors, subject to certain approvals and consents. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers, or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm that our initial business combination is fair to us from a financial point of view.
Members of our management team may directly or indirectly own our securities, and accordingly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. Our fourth amended and restated memorandum and articles of association provide that we renounce our interest in any corporate opportunity offered to any director or officer unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company, (ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another legal obligation. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor his or her obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us. We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors will materially affect our ability to complete our initial business combination.
Effecting a Business Combination
General
We are not presently engaged in, and we will not engage in, any substantive commercial business for an indefinite period of time following the IPO. We intend to utilize cash derived from the proceeds of the IPO and the private placement of private units, our share capital, debt or a combination of these in effecting a business combination. Although substantially all of the net proceeds of the IPO and the private placement of private units are intended to be applied generally toward effecting a business combination, the proceeds are not otherwise being designated for any more specific purposes. Accordingly, investors are investing without first having an opportunity to evaluate the specific merits or risks of any one or more business combinations. A business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares, while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense, loss of voting control and compliance with various U.S. Federal and state securities laws. In the alternative, we may seek to consummate a business combination with a company that may be in its early stages of development or growth. While we may seek to effect simultaneous business combinations with more than one target business, we will probably have the ability, as a result of our limited resources, to effect only a single business combination.
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We Have Identified a Target Business
As discussed above, we have entered into a business combination agreement with Mingde.
Except as discussed above, we have not selected any other target business on which to concentrate our search for a business combination, and none of our officers, directors, initial shareholders and other affiliates has engaged in discussions on our behalf with representatives of other companies regarding the possibility of a potential merger, share exchange, asset acquisition or other similar business combination with us, nor have we, nor any of our agents or affiliates, been approached by any candidates (or representatives of any candidates) with respect to a possible business combination with our company.
Subject to the limitations that a target business have a fair market value of at least 80% of the balance in the trust account (excluding any deferred underwriting fees and commissions and taxes payable on the income earned on the trust account, and net of funds previously released to the company to pay our taxes) at the time of the execution of a definitive agreement for our initial business combination, as described below in more detail, we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. We have not established any other specific attributes or criteria (financial or otherwise) for prospective target businesses. Accordingly, there is no basis for investors to evaluate the possible merits or risks of the target business with which we may ultimately complete a business combination. To the extent we effect a business combination with a company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of early stage or potential emerging growth companies. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
Sources of Target Businesses
We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses they think we may be interested in on an unsolicited basis, since many of these sources will have read the prospectus related to the IPO and know what types of businesses we are targeting. Our officers and directors, as well as their respective affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. In no event, however, will any of our existing officers, directors, special advisors or initial shareholders, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the consummation of a business combination (regardless of the type of transaction). If we decide to enter into a business combination with a target business that is affiliated with our officers, directors or initial shareholders, we will do so only if we have obtained an opinion from an independent investment banking firm that the business combination is fair to our unaffiliated shareholders from a financial point of view. However, as of the date of this report, there is no affiliated entity that we consider a business combination target.
Selection of a Target Business and Structuring of a Business Combination
Subject to the limitations that a target business have a fair market value of at least 80% of the balance in the trust account (excluding any deferred underwriting fees and commissions and taxes payable on the income earned on the trust account, and net of funds previously released to the company to pay our taxes) at the time of the execution of a definitive agreement for our initial business combination, as described below in more detail, our management will have virtually unrestricted flexibility in identifying and selecting a prospective target business. We have not established any other specific attributes or criteria (financial or otherwise) for prospective target businesses.
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We believe such factors will be important in evaluating prospective target businesses, regardless of the location or industry in which such target business operates. However, this list is not intended to be exhaustive. Furthermore, we may decide to enter into a business combination with a target business that does not meet these criteria and guidelines.
Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our management in effecting a business combination consistent with our business objective. In evaluating a prospective target business, we will conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial and other information which is made available to us. This due diligence review will be conducted either by our management or by unaffiliated third parties we may engage, although we have no current intention to engage any such third parties.
The time and costs required to select and evaluate a target business and to structure and complete the business combination cannot presently be ascertained with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in a loss to us and reduce the amount of capital available to otherwise complete a business combination.
Fair Market Value of Target Business
Pursuant to Nasdaq listing rules, the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any deferred underwriting fees and commissions and taxes payable on the income earned on the trust account, and net of funds previously released to the company to pay our taxes) at the time of the execution of a definitive agreement for our initial business combination, although we may acquire a target business whose fair market value significantly exceeds 80% of the trust account balance. We currently anticipate structuring a business combination to acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure a business combination where we merge directly with the target business or where we acquire less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital of a target. In this case, we could acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, only the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test, assuming that we obtain and maintain a listing for our securities on Nasdaq. In order to consummate such an acquisition, we may issue a significant amount of our debt or equity securities to the sellers of such businesses and/or seek to raise additional funds through a private offering of debt or equity securities. Since we have no specific business combination under consideration, we have not entered into any such fund-raising arrangement and have no current intention of doing so. The fair market value of the target business will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). If our board is not able to independently determine that the target business has a sufficient fair market value, we will obtain an opinion from an unaffiliated, independent investment banking firm, or another independent entity that commonly renders valuation opinions on the type of target business we are seeking to acquire, with respect to the satisfaction of such criteria. We will not be required to obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions on the type of target business we are seeking to acquire, as to the fair market value if our board of directors independently determines that the target business complies with the 80% threshold.
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We will not be required to comply with the 80% fair market value requirement if we are delisted from Nasdaq. If Nasdaq delists our securities from trading on its exchange, we would not be required to satisfy the fair market value requirement described above and could complete a business combination with a target business having a fair market value substantially below 80% of the balance in the trust account.
Lack of Business Diversification
Our business combination must be with a target business or businesses that collectively satisfy the minimum valuation standard at the time of such acquisition, as discussed above, although this process may entail the simultaneous acquisitions of several operating businesses at the same time. Therefore, at least initially, the prospects for our success may be entirely dependent upon the future performance of a single business. Unlike other entities which may have the resources to complete several business combinations of entities operating in multiple industries or multiple areas of a single industry, it is probable that we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. By consummating a business combination with only a single entity, our lack of diversification may:
| ● | subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination, and |
| ● | result in our dependency upon the performance of a single operating business or the development or market acceptance of a single or limited number of products, processes or services. |
If we determine to simultaneously acquire several businesses and such businesses are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other acquisitions, which may make it more difficult for us, and delay our ability, to complete the business combination. With multiple acquisitions, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.
Limited Ability to Evaluate the Target Business’ Management
Although we intend to scrutinize the management of a prospective target business when evaluating the desirability of effecting a business combination, we cannot assure you that our assessment of the target business’ management will prove to be correct. In addition, we cannot assure you that the future management will have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of our officers and directors, if any, in the target business following a business combination cannot presently be stated with any certainty. While it is possible that some of our key personnel will remain associated in senior management or advisory positions with us following a business combination, it is unlikely that they will devote their full-time efforts to our affairs subsequent to a business combination. Moreover, they would only be able to remain with the company after the consummation of a business combination if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for them to receive compensation in the form of cash payments and/or our securities for services they would render to the company after the consummation of the business combination. While the personal and financial interests of our key personnel may influence their motivation in identifying and selecting a target business, their ability to remain with the company after the consummation of a business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. Additionally, our officers and directors may not have significant experience or knowledge relating to the operations of the particular target business.
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Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that any such additional managers we do recruit will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve an Initial Business Combination
In connection with any proposed business combination, we will either (1) seek shareholder approval of our initial business combination at a meeting called for such purpose at which public shareholders may seek to convert their public shares, regardless of whether they vote for or against or abstain from voting on the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable on the income earned on the trust account and funds previously released to the company to pay our taxes) or (2) provide our public shareholders with the opportunity to sell their public shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable on the income earned on the trust account and funds previously released to the company to pay our taxes), in each case subject to the limitations described herein. Notwithstanding the foregoing, our initial shareholders have agreed, pursuant to written letter agreements with us, not to convert any public shares held by them into their pro rata share of the aggregate amount then on deposit in the trust account. If we determine to engage in a tender offer, such tender offer will be structured so that each shareholder may tender any or all of his, her or its public shares rather than some pro rata portion of his, her or its shares. The decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us based on a variety of factors such as the timing of the transaction, or whether the terms of the transaction would otherwise require us to seek shareholder approval. If we so choose and we are legally permitted to do so, we have the flexibility to avoid a shareholder vote and allow our shareholders to sell their shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act which regulate issuer tender offers. In that case, we will file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination as is required under the SEC’s proxy rules. We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 (after payment of underwriting fees and commissions and net of taxes payable on the income earned on the trust account and funds previously released to the company to pay our taxes) upon such consummation and, solely if we seek shareholder approval, a majority of the issued and outstanding ordinary shares voted are voted in favor of the business combination.
We chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under the Securities Act. However, if we seek to consummate an initial business combination with a target business that imposes any type of working capital closing condition or requires us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination, our net tangible asset threshold may limit our ability to consummate such initial business combination (as we may be required to have a lesser number of shares converted or sold to us) and may force us to seek third party financing which may not be available on terms acceptable to us or at all. As a result, we may not be able to consummate such initial business combination and we may not be able to locate another suitable target within the applicable time period, if at all. Public shareholders may therefore have to wait 24 months (assuming full extension) from the closing of the IPO in order to be able to receive a pro rata share of the trust account.
Our initial shareholders and our officers and directors have agreed (1) to vote any ordinary shares owned by them in favor of any proposed business combination, (2) not to convert any ordinary shares in connection with a shareholder vote to approve a proposed initial business combination and (3) not sell any ordinary shares in any tender in connection with a proposed initial business combination. As a result, if we sought shareholder approval of a proposed transaction we could need as little as 187,501 of our public shares (or approximately 3.1% of our public shares) to be voted in favor of the transaction in order to have such transaction approved (assuming that only a quorum was present at the meeting, and that the insiders do not purchase any units or shares in the after-market).
Permitted Purchases of Our Securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial shareholders, directors, officers or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination.
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Additionally, at any time at or prior to our
initial business combination, subject to applicable securities laws (including with respect to
In addition, our officers, directors, initial shareholders and their affiliates would structure such purchases to be in compliance with the requirements of Rule 14e-5 under the Exchange Act, including, in pertinent part, through adherence to the following:
| ● | our registration statement/proxy statement filed for our business combination transaction would disclose the possibility that our sponsor, directors, officers, advisors or their affiliates may purchase shares from public stockholders outside the redemption process, along with the purpose of such purchases; |
| ● | if our sponsor, directors, officers, advisors or their affiliates were to purchase shares from public stockholders, they would do so at a price no higher than the price offered through our redemption process; |
| ● | our registration statement/proxy statement filed for our business combination transaction would include a representation that any of our securities purchased by our sponsor, directors, officers, advisors or their affiliates would not be voted in favor of approving the business combination transaction; |
| ● | our sponsor, directors, officers, advisors or their affiliates would not possess any redemption rights with respect to our securities or, if they do acquire and possess redemption rights, they would waive such rights; and |
| ● | we would disclose in a Form 8-K, before our security holder meeting to approve the business combination transaction, the following material items: |
| ● | the amount of our securities purchased outside of the redemption offer by our sponsor, directors, officers, advisors or their affiliates, along with the purchase price; |
| ● | the purpose of the purchases by our sponsor, directors, officers, advisors or their affiliates; |
| ● | the impact, if any, of the purchases by our sponsor, directors, officers, advisors or their affiliates on the likelihood that the business combination transaction will be approved; |
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| ● | the identities of company security holders who sold to our sponsor, directors, officers, advisors or their affiliates (if not purchased on the open market) or the nature of company security holders (e.g., 5% security holders) who sold to our sponsor, directors, officers, advisors or their affiliates; and |
| ● | the number of company securities for which we received redemption requests pursuant to its redemption offer. |
Our sponsor, initial shareholders, directors, officers and their affiliates anticipate that they may identify the shareholders with whom our sponsor, initial shareholders, directors, officers and their affiliates may pursue privately negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, initial shareholders, directors, officers and their affiliates enter into a private transaction, they would identify and contact only potential selling or redeeming shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such shareholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the meeting related to our initial business combination. Our sponsor, initial shareholders, directors, officers and their affiliates will select which shareholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act and the other federal securities laws, as described above.
The purpose of any such purchases could be to (1) increase the likelihood of obtaining shareholder approval of the business combination or (2) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our ordinary shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Conversion/Tender Rights
At any meeting called to approve an initial business combination, public shareholders may seek to convert their public shares, regardless of whether they vote for or against or abstain from voting on the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then due but not yet paid. Notwithstanding the foregoing, our initial shareholders have agreed, pursuant to written letter agreements with us, not to convert any public shares held by them into their pro rata share of the aggregate amount then on deposit in the trust account. The redemption rights will be effected under our fourth amended and restated memorandum and articles of association and British Virgin Islands law as redemptions. If we hold a meeting to approve an initial business combination, a holder will always have the ability to vote against a proposed business combination and not seek conversion of its shares.
Alternatively, if we engage in a tender offer, each public shareholder will be provided the opportunity to sell his public shares to us in such tender offer. The tender offer rules require us to hold the tender offer open for at least 20 business days. Accordingly, this is the minimum amount of time we would need to provide holders to determine whether they want to sell their public shares to us in the tender offer or remain an investor in our company.
Our initial shareholders, officers and directors will not have redemption rights with respect to any ordinary shares owned by them, directly or indirectly, whether acquired prior to the IPO or purchased by them in the IPO or in the aftermarket.
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We may also require public shareholders, whether they are a record holder or hold their shares in “street name,” to either tender their certificates (if any) to our transfer agent or to deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, at any time at or prior to the vote on the business combination. Once the shares are converted by the holder, and effectively redeemed by us under BVI law, the share registrar in the BVI will then update our register of members to reflect all conversions. The proxy solicitation materials that we will furnish to shareholders in connection with the vote for any proposed business combination will indicate whether we are requiring shareholders to satisfy such delivery requirements. Accordingly, a shareholder would have from the time our proxy statement is mailed through the vote on the business combination to deliver his shares if he wishes to seek to exercise his redemption rights. Under our fourth amended and restated memorandum and articles of association, we will be required to provide at least 7 clear calendar days’ advance notice of any shareholder meeting, which would be the minimum amount of time a shareholder would have to determine whether to exercise redemption rights. As a result, if we require public shareholders who wish to convert their ordinary shares into the right to receive a pro rata portion of the funds in the trust account to comply with the foregoing delivery requirements, holders may not have sufficient time to receive the notice and deliver their shares for conversion. Accordingly, investors may not be able to exercise their redemption rights and may be forced to retain our securities when they otherwise would not want to.
There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $45 and it would be up to the broker whether or not to pass this cost on to the converting holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated. However, in the event we require shareholders seeking to exercise redemption rights to deliver their shares prior to the consummation of the proposed business combination and the proposed business combination is not consummated, this may result in an increased cost to shareholders.
Any request to convert or tender such shares once made, may be withdrawn at any time up to the vote on the proposed business combination or expiration of the tender offer. Furthermore, if a holder of a public share delivered its certificate in connection with an election of their conversion or tender and subsequently decides prior to the vote on the business combination or the expiration of the tender offer not to elect to exercise such rights, it may simply request that the transfer agent return the certificate (physically or electronically).
If the initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise their conversion or tender rights would not be entitled to convert their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any shares delivered by public holders.
Redemption of Public Shares and Liquidation of Trust Account if No Business Combination
If we do not complete a business combination within 24 months from the closing of the IPO (assuming full extension), our fourth amended and restated memorandum and articles of association provide that we will: (i) as promptly as practicable cease all operations except for the purpose of making redemption and the subsequent winding up of the Company’s affairs; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under BVI law to provide for claims of creditors and the requirements of other applicable law. If we are unable to consummate our initial business combination within such time period, we will, as promptly as possible but not more than ten business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account, including a pro rata portion of any interest earned on the funds held in the trust account and not necessary to pay our taxes, then seek to liquidate and dissolve. However, we may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our public shareholders. In the event of our liquidation and subsequent dissolution, the public rights will expire and will be worthless.
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The amount in the trust account will be treated as funds distributable under the Companies Act provided that immediately following the date on which the proposed distribution is proposed to be made, we are able to pay our debts as they fall due in the ordinary course of business. If we are forced to liquidate the trust account, we anticipate that we would distribute to our public shareholders the amount in the trust account calculated as of the date that is two (2) days prior to the distribution date (including any accrued interest net of taxes payable and any portion thereof that is released to us). Prior to such distribution, we would be required to assess all claims that may be potentially brought against us by our creditors for amounts they are actually owed and make provision for such amounts, as creditors take priority over our public shareholders with respect to amounts that are owed to them. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our shareholders could potentially be liable for any claims of creditors to the extent of distributions received by them as an unlawful payment in the event we enter an insolvent liquidation. Furthermore, while we will seek to have all vendors and service providers (which would include any third parties we engaged to assist us in any way in connection with our search for a target business) and prospective target businesses execute agreements with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee that they will execute such agreements. Nor is there any guarantee that, even if such entities execute such agreements with us, they will not seek recourse against the trust account or that a court would conclude that such agreements are legally enforceable.
Each of our initial shareholders and our officers and directors have agreed to waive their respective rights to participate in any liquidation of our trust account or other assets with respect to the insider shares and private units and to vote their insider shares, private shares and any public shares purchased in or after the IPO (other than shares acquired outside the redemption process in connection with our initial business combination, in compliance with Rule 14e-5 of the Exchange Act) in favor of any dissolution and plan of distribution which we submit to a vote of shareholders. There will be no distribution from the trust account with respect to our rights, which will expire worthless.
If we are unable to complete an initial business combination and expend all of the net proceeds of the IPO, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the initial per-share redemption price from the trust account would be $10.05.
The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would be prior to the claims of our public shareholders. Although we will seek to have all vendors, including lenders for money borrowed, prospective target businesses or other entities we engage execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account, including but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with a claim against our assets, including the funds held in the trust account. If any third party refused to execute an agreement waiving such claims to the monies held in the trust account, we would perform an analysis of the alternatives available to us if we chose not to engage such third party and evaluate if such engagement would be in the best interest of our shareholders if such third party refused to waive such claims. Examples of possible instances where we may engage a third party that refused to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a provider of required services willing to provide the waiver. In any event, our management would perform an analysis of the alternatives available to it and would only enter into an agreement with a third party that did not execute a waiver if management believed that such third party’s engagement would be significantly more beneficial to us than any alternative. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason.
Our sponsor has agreed that, if we liquidate the trust account prior to the consummation of a business combination, it will be liable to pay debts and obligations to target businesses or vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us in excess of the net proceeds of the IPO not held in the trust account, but only to the extent necessary to ensure that such debts or obligations do not reduce the amounts in the trust account and only if such parties have not executed a waiver agreement. However, we cannot assure you that it will be able to satisfy those obligations if it is required to do so. Accordingly, the actual per-share redemption price could be less than $10.05 due to claims of creditors. Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return to our public shareholders at least $10.05 per share.
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Competition
In identifying, evaluating and selecting a target business, we may encounter intense competition from other entities having a business objective similar to ours. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there may be numerous potential target businesses that we could acquire with the net proceeds of the IPO, our ability to compete in acquiring certain sizable target businesses may be limited by our available financial resources.
The following also may not be viewed favorably by certain target businesses:
| ● | our obligation to seek shareholder approval of a business combination or obtain the necessary financial information to be sent to shareholders in connection with such business combination may delay or prevent the completion of a transaction; |
| ● | our obligation to redeem public shares held by our public shareholders may reduce the resources available to us for a business combination; |
| ● | Nasdaq may require us to file a new listing application and meet its initial listing requirements to maintain the listing of our securities following a business combination; |
| ● | our outstanding rights and the potential future dilution they represent; |
| ● | our obligation to pay the deferred underwriting fees and commissions to the underwriters upon consummation of our initial business combination; |
| ● | our obligation to either repay or issue units upon conversion of up to $500,000 of working capital loans that may be made to us by our initial shareholders, officers, directors or their affiliates; |
| ● | our obligation to register the resale of the insider shares, as well as the private units (and underlying securities) and any securities issued to our initial shareholders, officers, directors or their affiliates upon conversion of working capital loans; and |
| ● | the impact on the target business’ assets as a result of unknown liabilities under the securities laws or otherwise depending on developments involving us prior to the consummation of a business combination. |
Any of these factors may place us at a competitive disadvantage in successfully negotiating a business combination. Our management believes, however, that our status as a public entity and potential access to the United States public equity markets may give us a competitive advantage over privately held entities having a similar business objective as ours in acquiring a target business with significant growth potential on favorable terms.
If we succeed in effecting a business combination, there will be, in all likelihood, intense competition from competitors of the target business. We cannot assure you that, subsequent to a business combination, we will have the resources or ability to compete effectively.
Facilities
We maintain our principal executive office at 2/F, Hang Seng Building, 200 Hennessy Road, Wanchai, Hong Kong.
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Employees
We have two executive officers. These individuals are not obligated to devote any specific number of hours to our matters and intend to devote only as much time as they deem necessary to our affairs. The amount of time they will devote in any time period will vary based on whether a target business has been selected for the business combination and the stage of the business combination process the company is in. Accordingly, once management locates a suitable target business to acquire, they will spend more time investigating such target business and negotiating and processing the business combination (and consequently spend more time to our affairs) than they would prior to locating a suitable target business. We presently expect our executive officers to devote such amount of time as they reasonably believe is necessary to our business (which could range from only a few hours a week while we are trying to locate a potential target business to a majority of their time as we move into serious negotiations with a target business for a business combination). We do not intend to have any full-time employees prior to the consummation of a business combination.
Periodic Reporting and Audited Financial Statements
We will register our units, ordinary shares and rights under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual report will contain financial statements audited and reported on by our independent registered public accountants.
We will provide shareholders with audited financial statements of the prospective target business as part of any proxy solicitation sent to shareholders to assist them in assessing the target business. In all likelihood, the financial information included in the proxy solicitation materials will need to be prepared in accordance with U.S. GAAP or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. The financial statements may also be required to be prepared in accordance with U.S. GAAP for the Form 8-K announcing the closing of an initial business combination, which would need to be filed within four business days thereafter. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have the necessary financial information. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business.
We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act beginning for the fiscal year ending December 31, 2025. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
We are an emerging growth company as defined in in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. We will remain such for up to five years. However, if we issue our non-convertible debt within a three-year period or our total revenues exceed $1.235 billion or the market value of our ordinary shares that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as of the following fiscal year. As an emerging growth company, we have elected, under Section 107(b) of the JOBS Act, to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against us or any of our officers or directors in their capacity as such, and we and our officers and directors have not been subject to any such proceeding in the 12 months preceding the date of this report.
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Enforceability of Civil Liabilities
There are enforcement risks related to civil liabilities due to our sponsor having ties to Hong Kong. Moreover, three of our five officers and directors are based in China, or have ties to the PRC and/or Hong Kong, namely Yangyujia An, our Chief Financial Officer and Director, and two of our independent directors, Zhengming Feng and Donghui Xu. Because of such ties of our sponsor, officers and directors to the PRC and/or Hong Kong, we may be governed by PRC laws and regulations. In addition, we may seek to acquire a company that is based in mainland China or Hong Kong in an initial business combination, in which circumstance the uncertainties in the interpretation and enforcement of PRC laws, rules and regulations would apply to us regardless of whether we have a VIE structure or direct ownership structure post-business combination.
There is uncertainty as to whether the courts of the mainland China or Hong Kong would recognize or enforce judgments of U.S. courts against the officers and directors predicated upon the civil liability provisions of the securities laws of the United States or any state. China does not have any treaties or other forms of written arrangement with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In Hong Kong, judgment of United States courts against us or against our directors or executive officers residing in Hong Kong, including those based on the civil liability provisions of the U.S. federal securities laws, will not be directly enforceable in Hong Kong. There are currently no treaties or other arrangements providing for reciprocal enforcement of foreign judgments between Hong Kong and the United States.
Furthermore, there would be additional costs and issues with bringing an original action in foreign courts against the combined company or the officers and directors to enforce liabilities based upon the U.S. Federal securities laws, and they still may be fruitless.
As a result of all of the above, public shareholders may find it more difficult to enforce liabilities and enforce judgments on individual directors and executive officers, and may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a U.S. company.
ITEM 1A. RISK FACTORS
As a smaller reporting company we are not required to make disclosures under this Item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
We are a special purpose
acquisition company with no business operations. Since our IPO, our sole business activity has been identifying and evaluating suitable
acquisition transaction candidates. Therefore, we do not consider that we face significant cybersecurity risk and have not adopted
any cybersecurity risk management program or formal processes for assessing cybersecurity risk.
ITEM 2. PROPERTIES
We currently utilize office space at 2/F, Hang Seng Building, 200 Hennessy Road, Wanchai, Hong Kong from our Sponsor. We pay our Sponsor $10,000 per month for office space, secretarial and administrative services provided to members of our management team. Upon completion of our Business Combination or our liquidation, we will cease paying these monthly fees.
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ITEM 3. LEGAL PROCEEDINGS
To the knowledge of our management team, there is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
(a) Market Information
Our Units, Ordinary Shares and Rights trade on The Nasdaq Global Market under the symbols “YHNAU,” “YHNA” and “YHNAR” respectively.
(b) Holders
As of March 9, 2026, there were 4,285,821 ordinary shares outstanding. There were also 2 holders of record of our Units, 13 holders of record of our ordinary shares, 1 holder of record of our Rights.
(c) Dividends
We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of a Business Combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions subsequent to completion of a Business Combination. The payment of any cash dividends subsequent to a Business Combination will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
(d) Securities Authorized for Issuance Under Equity Compensation Plans
None.
(e) Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings
In December 2023 and April 2024, the Company issued an aggregate of 1,725,000 insider shares to the initial shareholders in exchange for cash of $25,000. In November 2024, the underwriter did not exercise their 45-day option to purchase 900,000 Units, therefore 225,000 founder shares are forfeited in February 2025. Our initial shareholders have agreed not to transfer, assign or sell any of the insider shares (except to certain permitted transferees) until 180 days after the completion of our initial business combination, Notwithstanding the foregoing, the insider shares will be released from the 180-day lock-up on the earlier of (1) 150 days after the date of the consummation of our initial business combination if the closing price of our ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination or (2) after the date of the consummation of our initial business combination, and subsequently, we consummate a liquidation, merger, share exchange or other similar transaction which results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property.
On September 19, 2024, the Company consummated the IPO of 6,000,000 units (the “Units). Each Unit consists of one ordinary share (“Ordinary Share”) and one right to receive one-tenth (1/10) of one Ordinary Share upon the consummation of an initial business combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $60,000,000. As of September 19, 2024, a total of $60,300,000 of the net proceeds from the IPO and the Private Placement (as defined below) were deposited in a trust account established for the benefit of the Company’s public shareholders.
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Simultaneously with the closing of the IPO, the Company consummated the private placement (“Private Placement”) with its sponsor of 250,000 units (the “Private Units”) at a price of $10.00 per Private Unit, generating total proceeds of $2,500,000. The Private Units are identical to the Units sold in the IPO except with respect to certain registration rights and transfer restrictions. Additionally, our sponsor has also agreed not to transfer, assign or sell any of Private Units (including the ordinary shares issuable upon exercise of the Private Units) until 180 days after the completion of our initial business combination (except with respect to permitted transferees). Any permitted transferees will be subject to the same restrictions and other agreements of our initial shareholders with respect to any insider shares, and the private units, as applicable. However, if after our initial business combination, there is a transaction whereby all the outstanding shares are exchanged or redeemed for cash (as would be the case in a post-asset sale liquidation) or another issuer’s shares, then the insider shares, or the private units (or any shares of Ordinary Shares thereunder) shall be permitted to participate. The holders were granted certain demand and piggyback registration rights in connection with the Private Units. The Private Units were issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, as the transaction did not involve a public offering.
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (the “Annual Report”) to “we,” “us” or the “Company” refer to YHN Acquisition I Limited. References to our “management” or our “Management Team” refer to our officers and directors, and references to the “Sponsor” refer to YHN Partners I Limited. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the audited financial statements and the notes thereto contained elsewhere in this Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
We are a blank check company incorporated on December 18, 2023 under the laws of the British Virgin Islands and formed 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. We intend to effectuate our initial business combination using cash from the proceeds of the initial public offering and the sale of the private units, our capital stock, debt or a combination of cash, stock and debt.
On September 19, 2024, we consummated our initial public offering (“IPO”) of 6,000,000 units (the “Public Units”). Each Unit consists of one ordinary share (the “Ordinary Share”) and one right to receive one-tenth (1/10) of one Ordinary Share upon the consummation of an initial business combination. The Units were sold at a price of $10.00 per Unit, generating aggregate gross proceeds to the Company of $60,000,000.
Simultaneously with the closing of the IPO on September 19, 2024, the Company consummated the private placement (“Private Placement”) with the Sponsor of 250,000 units (the “Private Units”) at a price of $10.00 per Private Unit, generating total proceeds of $2,500,000. These securities (other than our IPO securities) were issued pursuant to an exemption from registration under the Securities Act of 1933, as amended pursuant to Section 4(2) of the securities Act.
The Private Units are identical to the units sold in the IPO except with respect to certain registration rights and transfer restrictions. Holders of the Private Units will be entitled to registration rights pursuant to the Registration Rights Agreement, dated September 17, 2024, by and among us and the initial shareholders, so long as the Private Units continue to be held by the Sponsor or their permitted transferees. The holders of a majority of these securities are entitled to make up to three demands that we register such securities. Additionally, our Sponsor has agreed not to transfer, assign, or sell any of the Private Units or underlying securities (except in limited circumstances, as described in the Registration Statement) until 180 days after the Company completes its initial business combination.
Our management has broad discretion with respect to the specific application of the net proceeds of the initial business combination and the Private Placement, although substantially all of the net proceeds are intended to be applied generally towards consummating a business combination.
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Results of Operations
Our entire activity from inception up to September 19, 2024 was in preparation for the initial public offering. Since the initial public offering, our activity has been limited to the evaluation of business combination candidates, and we will not be generating any operating revenues until the closing and completion of our initial business combination. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after this period.
For the year ended December 31, 2025 we had a net income of $1,325,117 which was comprised of formation and operating costs expenses, dividend income and interest income.
For the year ended December 31, 2024 we had a net income of $502,638 which was comprised of formation and operating costs expenses, dividend income and interest income.
Liquidity and Capital Resources
As of December 31, 2025, we had cash of $140,550. Until the consummation of the initial public offering, the only source of liquidity was an initial purchase of ordinary shares by our Sponsor, monies loaned by the Sponsor under a certain unsecured promissory note and advances from our Sponsor.
On September 19, 2024, we consummated the Initial Public Offering of 6,000,000 units (the “Public Units”), at $10.00 per Public Unit, generating gross proceeds of $60,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 250,000 Private Units at a price of $10.00 per unit in the Private Placement, generating gross proceeds of $2,500,000.
Transaction costs amounted to $2,840,203, consisting of $960,000 of underwriting fees, $1,500,000 of deferred underwriting fees and $380,203 of other offering costs. In addition, at September 19, 2024, cash of $737,704 were held outside of the Trust Account and is available for working capital purposes and $60,300,000 were transferred to the Trust Account.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account to complete our initial business combination (less deferred underwriting commissions). We may withdraw interest earned on the funds held in our trust account to pay taxes. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest earned on the amount in the trust account will be sufficient to pay our taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we will have available to us approximately $750,000 of proceeds held outside the trust account. We will use these funds to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete an initial business combination.
The Company’s IPO prospectus dated September 17, 2024 provides that the Company initially had 15 months from the closing of the IPO to complete its initial business combination. If the Company does not complete a Business Combination within 15 months from the consummation of the Initial Public Offering, the Company will trigger an automatic winding up, dissolution and liquidation pursuant to the terms of the Amended and Restated Memorandum and Articles of Association. As a result, this has the same effect as if the Company had formally gone through a voluntary liquidation procedure under the Companies Act (As Revised) of the British Virgin Islands. Accordingly, no vote would be required from the shareholders to commence such a voluntary winding up, dissolution and liquidation. If the Company is unable to consummate the Company’s Initial Business Combination within such 15 months (unless further extended), the Company will, as promptly as possible but not more than ten business days thereafter, redeem 100% of the Company’s outstanding public shares for a pro rata portion of the funds held in the Trust Account, including a pro rata portion of any interest earned on the funds held in the Trust Account and not necessary to pay taxes, and then seek to liquidate and dissolve. However, the Company may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of the Company’s public shareholders.
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As approved by its shareholders at the Annual Meeting of Shareholders on December 8, 2025 (the “2025 AGM”), YHN had on December 8, 2025 entered into an amendment (the “Trust Amendment”) to the investment management trust agreement, dated as of September 17, 2024, by and between the Company and Continental Stock Transfer & Trust Company, to provide YHN with the discretion to extend the date on which to commence liquidating the Trust Account by three (3) times for an additional three (3) months each time from December 19, 2025 to September 19, 2026 by depositing into the trust account an aggregate amount of $150,000 for each three-month extension. YHN also filed the fourth amended and restated memorandum and articles of association on December 8, 2025, giving YHN the right to extend the date by which YHN has to consummate a business combination from December 19, 2025 (the date that is 15 months from the closing date of the IPO) to September 19, 2026 (the date that is 24 months from the closing date of the IPO). In connection with the shareholders vote at the 2025 AGM, 3,464,179 ordinary shares were tendered for redemption.
If the Company does not complete a business combination by September 19, 2026 (assuming full extension), the Company will (i) as promptly as practicable, cease all operations except for the purpose of making redemption and the subsequent winding up of the Company’s affairs; (ii) as promptly as reasonably possible but not more than ten (10) business days thereafter, redeem 100% of the Company’s outstanding public shares for a pro rata portion of the funds held in the trust account, including a pro rata portion of any interest earned on the funds held in the trust account and not previously released to the Company or necessary to pay the Company’s taxes, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its board of directors, seek to liquidate and dissolve. However, the Company may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of its public shareholders. In the event of dissolution and liquidation, the public rights will expire and will be worthless.
Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern if a business combination is not consummated by September 19, 2026 (assuming full extension). These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Off-balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as of December 31, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other than an agreement to pay our Sponsor a monthly fee of $10,000 for general and administrative services, including office space, utilities and administrative services to us. We began incurring these fees on September 19, 2024 and will continue to incur these fees monthly until the earlier of the completion of the business combination and our liquidation. Also, we are committed to the below:
Registration Rights
Pursuant to the Registration Rights Agreement entered into on September 19, 2024, the holders of the Founder Shares, Private Placement Units (including securities contained therein), and units (including securities contained therein) that may be issued on conversion of working capital loans or extension loans (and) are entitled to registration rights, requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company’s register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
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Underwriting Agreement
The Company granted the underwriters a 45-day option to purchase up to 900,000 Units (over and above 6,000,000 Units referred to above) solely to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. In November 2024, the underwriters did not exercise their 45-day option to purchase 900,000 Units.
The underwriters are entitled to a cash underwriting discount up to 2.5% of the gross proceeds of the Initial Public Offering, or $1,500,000, upon the closing of the Business Combination, subject to a minimum of $500,000.
Critical Accounting Policies
| ● | Ordinary shares subject to possible redemption |
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC 480, “Distinguishing Liabilities from Equity”. Ordinary share subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholder’s equity. Accordingly, as of December 31, 2025 and 2024, 2,535,821 and 6,000,000 ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheets, respectively. If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).
As of December 31, 2025, the ordinary shares subject to possible redemption reflected on the balance sheet are disclosed in the following table:
| Amount | ||||
| Gross proceeds | $ | 60,000,000 | ||
| Less: | ||||
| Proceeds allocated to Public Rights | (3,767,573 | ) | ||
| Offering costs of Public Shares | (2,661,858 | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value - 2024 | 6,729,431 | |||
| Subsequent remeasurement of ordinary shares subject to possible redemption - 2024 | 789,076 | |||
| Ordinary shares subject to possible redemption as of December 31, 2024 | 61,089,076 | |||
| Less: | ||||
| Redemption of ordinary shares | (36,650,157 | ) | ||
| Plus: | ||||
| Subsequent remeasurement of ordinary shares subject to possible redemption - 2025 | 2,611,987 | |||
| $ | 27,050,906 | |||
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| ● | Net income (loss) per share |
The Company calculates net income (loss) per share in accordance with ASC Topic 260, “Earnings per Share.” In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable ordinary shares and non-redeemable ordinary shares and the undistributed income (loss) is calculated using the total net income (loss) less any dividends paid. The Company then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable ordinary shares. Any remeasurement of the accretion to the redemption value of the ordinary shares subject to possible redemption was considered to be dividends paid to the public stockholders. Accretion associated with the redeemable shares of ordinary share is excluded from earnings per share as the redemption value approximates fair value.
The net income (loss) per share presented in the statements of income is based on the following:
| For the Year ended December 31, 2025 | For the Year ended December 31, 2024 | |||||||||||||||
| Redeemable Ordinary Share | Non-Redeemable Ordinary Share | Redeemable Ordinary Share | Non-Redeemable Ordinary Share | |||||||||||||
| Basic and diluted net income (loss) per share: | ||||||||||||||||
| Numerators: | ||||||||||||||||
| Other income earned in investments held in Trust Account | $ | 2,462,016 | $ | – | $ | 789,287 | $ | – | ||||||||
| Total expenses | (873,403 | ) | (263,496 | ) | (148,522 | ) | (138,127 | ) | ||||||||
| Total allocation to redeemable and non-redeemable ordinary share | $ | 1,588,613 | $ | (263,496 | ) | $ | 640,765 | $ | (138,127 | ) | ||||||
| Denominators: | ||||||||||||||||
| Weighted-average shares outstanding | 5,800,691 | 1,750,000 | 1,688,525 | 1,570,355 | ||||||||||||
| Basic and diluted net income (loss) per share | $ | 0.27 | $ | (0.15 | ) | $ | 0.38 | $ | (0.09 | ) | ||||||
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
This information appears following Item 15 of this Report and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
As of December 31, 2025, we did not have changes in, or disagreements with, our independent registered public accounting firm on our accounting and financial disclosure.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our current chief executive officer and chief financial officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December 31, 2025, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of December 31, 2025, our disclosure controls and procedures were effective.
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We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Management’s Annual Report on Internal Controls over Financial Reporting
This Report does not include a report of management’s assessment regarding internal control over financial reporting due to a transition period established by the rules of the SEC for newly public companies.
This Annual Report on Form 10-K does not include an attestation report of internal controls from our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting that occurred during our fiscal year ended December 31, 2025 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
During
the year ended December 31, 2025, no director or officer
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
As of the date of this Form 10-K, our directors and executive officers are as follows:
| Name | Age | Position | ||
| Poon Man Ka, Christy | 46 | Chief Executive Officer and Director | ||
| Yangyujia An | 30 | Chief Financial Officer and Director | ||
| Zhengming Feng | 82 | Independent Director and Chairperson of the Board of Directors | ||
| Donghui Xu | 45 | Independent Director | ||
| Min Zhang | 29 | Independent Director |
Below is a summary of the business experience of each our executive officers and directors:
Poon Man Ka, Christy. Ms. Poon has been serving as our chief executive officer since July 2025. Possessing a wealth of experience in mergers & acquisitions, intellectual property, public relations, and media marketing, Ms. Poon currently serves as a Partner at Norwich Capital Limited, a position she has held since July 2024. In this role, she leverages her expertise to oversee diverse projects throughout Asia, focusing on corporate reorganization, fundraising, management of intellectual property assets and advisory on US public listings. Previously, Ms. Poon held the position of Vice President, Corporate Affairs & Operations at XIC Innovation Limited in May 2022. During her tenure, she headed up the Legal and Intellectual Property Department, concentrating on ensuring US listing compliance, managing a portfolio of hundreds of patents, and executing strategic investments through private equity. Simultaneously, she served as the General Manager of JM Production Limited. Prior to this, she was General Manager of JM Network Limited from February 2019, where she dedicated over 15 years to establishing a robust reputation and fostering business growth in overseeing Hong Kong's leading outdoor media network. Ms. Poon commenced her career in Hong Kong as an Associate at Ketchum, Inc. in June 2005, a global public relations firm headquartered in the US. Within this capacity, she contributed to corporate communications and investor relations initiatives for Hong Kong-listed companies. She received her Bachelor of Arts degree in Translation and Interpretation from Lingnan University, Hong Kong in 2001 and a Master of Science degree in Business & Community from University of Bath, UK in 2003. Ms. Poon's academic background encompasses linguistics, communications, business management and social policy science. Additionally, she has been accredited as an HKMAAL General Mediator since November 2023, specializing in mediation, conflict resolution, and negotiation. Furthermore, she holds accreditation as a Certified ESG Planner since July 2024.
Yangyujia An. Ms. An has been serving as our chief financial officer since March 2024. She has a wealth of experience in SPAC transactions, from IPOs to closings of initial business combination. Since 2020, she has been the vice-chairperson of Norwich Capital Limited, a boutique firm that focuses on SPACs and provides services including sponsoring and listing support of SPACs. Prior to that, she also worked as an investment manager at Norwich Investment Limited from 2018 to 2020. Ms. An received her bachelor’s degree in Information Systems and Finance from the Hong Kong University of Science and Technology in 2017. We believe that Ms. An is qualified to serve on our board of directors based on her strong operational and prior SPAC experience.
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Zhengming Feng. Mr. Feng has been serving as our chairman and independent director since March 2024. He has an extensive background in equity investment spanning over twenty years, as well as experience in various industries ranging from aviation to energy to technology. Mr Feng currently serves as chairman at investment firms Yonghe Capital Group and Yongmei Lianhe (Shanghai) Investment Management Co., Ltd., each of which he joined in July 2021. Previously, from December 2009 to June 2021, Mr. Feng was Managing Director of SB China Venture Capital (SBCVC), a leading venture capital firm that manages both USD and RMB funds investing in high-tech, high growth companies in TMT, clean technology, healthcare, consumer/retail, and advanced manufacturing. SBCVC has successfully invested in various notable companies such as Alibaba, Taobao, Focus Media, Global Data Solutions (Nasdaq:GDS), BGI Genomics, Ankon Technologies, Dian Diagnostics, and Edan Instruments, among others. Mr. Feng was chief executive officer of China Environment Ltd., an environmental protection technology company listed in Singapore, from November 2008 to November 2009. He was also the executive director, executive deputy general manager and general manager at Tsinghua Tongfang Environment Co., Ltd., a Chinese state-owned software company, from September 2004 to October 2008, as well as the General Manager of Tongfang (Shanghai) Co., Ltd. From March 1999 to August 2004, Mr. Feng was the deputy general manager and chief economist of China Machinery Energy Group, where he helped orchestrate the cooperation between the Chinese and German governments in the production of key equipment for gas engines. Within the same period, from April 1999 to May 2004, Mr. Feng also served as an energy adviser to China’s State Bureau of Metallurgical Industry, and from June 1999 to July 2004, served as vice chairman and chief economist of AECC Aero-Engine Control Co., Ltd.. Prior to this, from January 1969 to February 1999, Mr. Feng served various roles including party committee member, manager, and deputy factory director at Hangzhou Boiler Group Co., Ltd, a company committed to the R&D, manufacturing, and sales of industrial boilers, pressure vessels and other products. Mr. Feng received his bachelor’s degree in Sports Psychology from Hangzhou University (now Zhejiang University) in May 1963. He went on to complete a certification course in Economic Management Studies from Shanghai University of Finance and Economics in 1990, and also became a visiting scholar for Economic Management, International Finance and International Trade at the University of Southern California from August 1992 to June 1993. We believe that Mr. Feng is qualified to serve on our board of directors based on his multiple decades of experience and networks in major companies over a wide range of industries.
Donghui Xu. Mr. Xu has been serving as our independent director since March 2024. Since December 2014, Mr. Xu has been the legal representative and managing director for investment firm Yongmei Lianhe (Shanghai) Investment Management Co., Ltd. He also serves as a director and deputy general manager of Zhejiang Yong Zheng Shen He Enterprise Management Co., Ltd, which he joined in December 2022, and as a director and shareholder of venture capital firm JingWei Capital Holding Group Co., Ltd. since June 2023. From September 2013 to November 2014, Mr. Xu was general manager at Beijing Mainstaysource Technology Development Co., Ltd. He served Beijing Billion Power Health Technology Co., Ltd. as deputy general manager from July 2010 to June 2013. Mr. Xu began his career as a project manager at Beijing Delta Consulting Co., Ltd. from October 2007 to May 2010. Mr. Xu received his Bachelor of Science in Business Administration and Economics from Stockholm University in August 2004. He also went on to earn a Master of Accounting and Finance from Umeå University and a Master of Business Administration from Lund University in February 2007. We believe that Mr. Xu is qualified to serve on our board of directors based on his leadership experience across several prominent companies, coupled with his strong foundation in both the operational and financial aspects of business management.
Min Zhang. Ms. Zhang has been serving as our independent director since March 2024. She has a comprehensive background in traditional IPOs, reverse M&A and SPAC listings in the U.S., having been a key player in the operational and administrative processes of several SPAC listings and reverse merger transactions. She currently serves as a consultant at Norwich Capital Limited, a boutique firm focused on SPAC sponsoring, SPAC listing support services, and M&A and IPO support services, which she joined in April 2020 as her first employment. Ms. Zhang received a bachelor’s degree in accounting and a bachelor’s degree in banking and finance from Monash University in April 2020. We believe that Ms. Zhang is qualified to serve on our board of directors based on her operational and prior experience with SPACs.
Involvement in Certain Legal Proceedings
During the past ten years, none of the Company’s executive officers, directors or nominees have (i) been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or (ii) been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining such person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. During the past ten years except as discussed below (i) no petition has been filed under federal bankruptcy laws or any state insolvency laws by or against any of our executive officers, directors or nominees, (ii) no receiver, fiscal agent or similar officer was appointed by a court for the business or property of any of our executive officers, directors or nominees, and (iii) none of our executive officers, directors or nominees was an executive officer of any business entity or a general partner of any partnership at or within two years before the filing of a petition under the federal bankruptcy laws or any state insolvency laws by or against such entity.
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As of the date of this Form 10-K, we are not subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against us or any of our executive officers or directors in their corporate capacity.
Number and Terms of Office of Officers and Directors
We have five directors. Each member of our board of directors will be elected at our annual meetings. In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq.
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint officers as it deems appropriate pursuant to our Charter.
Director Independence
The rules of Nasdaq require that a majority of our board of directors be independent within one year of our IPO. Our board of directors has determined that Mr. Zhengming Feng, Mr. Donghui Xu, and Ms. Min Zhang are “independent directors” as defined in Nasdaq rules and applicable SEC rules. Our independent directors will have meetings at which only independent directors are present.
Committees of the Board of Directors
Our board of directors has three standing committees: an audit committee, a corporate governance and nominating committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors.
Audit Committee
Under the Nasdaq listing standards and applicable SEC rules, we are required to have three members of the audit committee all of whom must be independent. We have established an audit committee of the board of directors, which consists of Mr. Zhengming Feng, Mr. Donghui Xu, and Ms. Min Zhang, each of whom is an independent director under Nasdaq’s listing standards. Ms. Min Zhang is the Chairperson of the audit committee. The audit committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:
| ● | reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our Form 10-K; |
| ● | discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; |
| ● | discussing with management major risk assessment and risk management policies; |
| ● | monitoring the independence of the independent auditor; |
| ● | verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; |
| ● | inquiring and discussing with management our compliance with applicable laws and regulations; |
| ● | pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed; |
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| ● | appointing or replacing the independent auditor; |
| ● | determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; and |
| ● | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. |
Financial Experts on Audit Committee
The audit committee will at all times be composed exclusively of independent directors who are “financially literate” as defined under Nasdaq listing standards. Nasdaq listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement.
In addition, we must certify to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication. The board of directors has determined that Ms. Min Zhang is qualified as an “audit committee financial expert,” as defined under rules and regulations of the SEC.
Corporate Governance and Nominating Committee
We have established a corporate governance and nominating committee of the board of directors, which consists of Mr. Zhengming Feng, Mr. Donghui Xu, and Ms. Min Zhang, each of whom is an independent director under Nasdaq’s listing standards. Mr. Zhengming Feng is the Chairperson of the corporate governance and nominating committee. The corporate governance and nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The corporate governance and nominating committee considers persons identified by its members, management, shareholders, investment bankers and others.
Guidelines for Selecting Director Nominees
The guidelines for selecting nominees, which are specified in the Corporate Governance and Nominating Committee Charter, generally provide that persons to be nominated:
| ● | should have demonstrated notable or significant achievements in business, education or public service; |
| ● | should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and |
| ● | should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders. |
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The corporate governance and nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The corporate governance and nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The board of directors will also consider director candidates recommended for nomination by our shareholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of shareholders (or, if applicable, a special meeting of shareholders). Our shareholders that wish to nominate a director for election to the board of directors should follow the procedures set forth in our memorandum and articles of association. The corporate governance and nominating committee does not distinguish among nominees recommended by shareholders and other persons.
Compensation Committee
We have established a compensation committee of the board of directors, which consists of Mr. Zhengming Feng, Mr. Donghui Xu, and Ms. Min Zhang, each of whom is an independent director under Nasdaq’s listing standards. Mr. Donghui Xu is the Chairperson of the compensation committee. The compensation committee’s duties, which are specified in our Compensation Committee Charter, include, but are not limited to:
| ● | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
| ● | reviewing and approving the compensation of all of our other executive officers; |
| ● | reviewing our executive compensation policies and plans; |
| ● | implementing and administering our incentive compensation equity-based remuneration plans; |
| ● | reviewing and approving the compensation disclosure and analysis prepared by Company management to be included in our proxy statement and annual report disclosure requirements; |
| ● | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; and |
| ● | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
Notwithstanding the foregoing, as indicated above, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing shareholders, including our directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate, the consummation of a business combination. Accordingly, it is likely that prior to the consummation of an initial business combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into in connection with such initial business combination.
Code of Conduct and Ethics
We have adopted a code of conduct and ethics that applies to all of our executive officers, directors and employees. The code of conduct and ethics codifies the business and ethical principles that govern all aspects of our business.
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Conflicts of Interest
Potential investors should be aware of the following potential conflicts of interest:
| ● | None of our officers and directors is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their time among various business activities. |
| ● | In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to our company as well as the other entities with which they are affiliated. Our management has pre-existing fiduciary duties and contractual obligations and may have conflicts of interest in determining to which entity a particular business opportunity should be presented. |
| ● | Our officers and directors may in the future become affiliated with entities, including other blank check companies, engaged in business activities similar to those intended to be conducted by our company. |
| ● | The insider shares owned by our officers and directors will be released from escrow only if a business combination is successfully completed and subject to certain other limitations. Additionally, our officers and directors will not receive distributions from the trust account with respect to any of their insider shares if we do not complete a business combination. Furthermore, our initial shareholders have agreed that the private units will not be sold or transferred by them until after we have completed our initial business combination. In addition, our officers and directors may loan funds to us and may be owed reimbursement for expenses incurred in connection with certain activities on our behalf which would only be repaid if we complete an initial business combination. For the foregoing reasons, the personal and financial interests of our directors and executive officers may influence their motivation in identifying and selecting a target business, completing a business combination in a timely manner and securing the release of their shares. |
Under British Virgin Islands law, directors owe the company the following fiduciary responsibilities:
| ● | duty to act in good faith in and with a view to what the director believes to be in the best interests of the company as a whole; |
| ● | duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose and directors shall not act, or agree to act, in a matter that contravenes the Companies Act or the memorandum and articles of association; |
| ● | duty to exercise the care, diligence and skill that a reasonable director would exercise in the circumstances taking into account, without limitation: |
| (a) | the nature of the company; |
| (b) | the nature of the decision; and |
| (c) | the position of the director and the nature of the responsibilities undertaken by him; |
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| ● | directors should not improperly fetter the exercise of future discretion; |
| ● | duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and |
| ● | duty to exercise independent judgment. |
The Companies Act provides that, a director of a company shall, immediately after becoming aware of the fact that he is interested in a transaction entered into, or to be entered into, by the company, disclose the interest to the board of the company. However, the failure of a director to disclose that interest does not affect the validity of a transaction entered into by the director or the company, so long as the transaction was not required to be disclosed because the transaction is between the company and the director himself and is in the ordinary course of business and on usual terms and conditions. Additionally, the failure of a director to disclose an interest does not affect the validity of the transaction entered into by the company if (1) the material facts of the interest of the director in the transaction are known by the shareholders and the transaction is approved or ratified by a resolution of shareholders entitled to vote at a meeting of shareholders or (2) the company received fair value for the transaction.
Pursuant to the Companies Act and the company’s fourth amended and restated memorandum and articles of association, so long as a director has disclosed any interests in a transaction entered into or to be entered into by the company to the board, he/she may:
| (1) | vote on a matter relating to the transaction; |
| (2) | attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for the purposes of a quorum; and |
| (3) | sign a document on behalf of the company or do any other thing in his capacity as a director, that relates to the transaction. |
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the fourth amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings.
Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. In addition, conflicts of interest may arise when our board evaluates a particular business opportunity with respect to the above-listed criteria. We cannot assure you that any of the above-mentioned conflicts will be resolved in our favor. Furthermore, most of our officers and directors have pre-existing fiduciary obligations to other businesses of which they are officers or directors. To the extent they identify business opportunities which may be suitable for the entities to which they owe pre-existing fiduciary obligations, our officers and directors will honor those fiduciary obligations. Accordingly, it is possible they may not present opportunities to us that otherwise may be attractive to us unless the entities to which they owe pre-existing fiduciary obligations and any successors to such entities have declined to accept such opportunities.
In order to minimize potential conflicts of interest which may arise from multiple corporate affiliations, each of our officers and directors has contractually agreed, pursuant to a written agreement with us, until the earliest of a business combination, our liquidation or such time as he ceases to be an officer or director, to present to our company for our consideration, prior to presentation to any other entity, any suitable business opportunity which may reasonably be required to be presented to us, subject to any pre-existing fiduciary or contractual obligations he might have.
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The following table summarizes the other relevant pre-existing fiduciary or contractual obligations of our officers and directors:
| Name of Individual | Name of Affiliated Company | Affiliation | ||
| Poon Man Ka, Christy | Norwich Capital Limited | Partner | ||
| Yangyujia An | Norwich Capital Limited | Vice Chairperson | ||
| Zhengming Feng | Yongho Capital Group | Chairman | ||
| Yongmei Lianhe (Shanghai) Investment Management Co., Ltd. | Chairman | |||
| Donghui Xu | Zhejiang Yong Zheng Shen He Enterprise Management Co., Ltd | Director and Deputy General Manager | ||
| Yongmei Lianhe (Shanghai) Investment Management Co., Ltd. | Legal Representative and Managing Director | |||
| Min Zhang | Norwich Capital Limited | Independent Consultant |
In connection with the vote required for any business combination, all of our existing shareholders, including all of our officers and directors, have agreed to vote their respective insider shares and any shares purchased in the IPO or following the IPO in the open market (other than shares acquired outside the redemption process in connection with our initial business combination, in compliance with Rule 14e-5 of the Exchange Act) in favor of any proposed business combination. In addition, they have agreed to waive their respective rights to participate in any liquidation distribution with respect to those ordinary shares acquired by them prior to the IPO. If they purchase ordinary shares in the IPO or in the open market, however, they would be entitled to participate in any liquidation distribution in respect of such shares but have agreed not to convert such shares (or sell their shares in any tender offer) in connection with the consummation of our initial business combination or an amendment to our fourth amended and restated memorandum and articles of association relating to pre-business combination activity.
All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by our audit committee and a majority of our uninterested “independent” directors, or the members of our board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our audit committee and a majority of our disinterested “independent” directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.
To further minimize conflicts of interest, we have agreed not to consummate our initial business combination with an entity that is affiliated with any of our officers, directors or initial shareholders, unless we have obtained (i) an opinion from an independent investment banking firm that the business combination is fair to our unaffiliated shareholders from a financial point of view and (ii) the approval of a majority of our disinterested and independent directors (if we have any at that time). Furthermore, in no event will any of our initial shareholders, officers, directors, special advisors or their respective affiliates be paid any finder’s fee, consulting fee or other similar compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Our memorandum and articles of association provide that, subject to certain limitations, the company shall indemnify its directors and officers against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. Such indemnity only applies if the person acted honestly and in good faith with a view to what the person believes is in the best interests of the company and, in the case of criminal proceedings, the person had no reasonable cause to believe that their conduct was unlawful. The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the company and as to whether the person had no reasonable cause to believe that his conduct was unlawful and is, in the absence of fraud, sufficient for the purposes of the memorandum and articles of association, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of the company or that the person had reasonable cause to believe that his conduct was unlawful.
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We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our memorandum and articles of association. Our memorandum and articles of association also will permit us to purchase and maintain insurance on behalf of any officer or director who at the request of the Company is or was serving as a director or officer of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the company has or would have had the power to indemnify the person against the liability as provided in the memorandum and articles of association. We will purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
These provisions may discourage shareholders from bringing a lawsuit against our directors for breach of their fiduciary responsibilities. These provisions also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, shareholders’ investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is theretofore unenforceable.
Insider Trading Policy
We have
ITEM 11. EXECUTIVE COMPENSATION
Employment Agreements
We have not entered into any employment agreements with our executive officers, and have not made any agreements to provide benefits upon termination of employment.
Executive Officers and Director Compensation
We pay $10,000 per month administrative fee to an affiliate of our Sponsor until completion of our initial business combination or our liquidation. No executive officer has received any cash compensation for services rendered to us. No compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing stockholders, including our directors, or any of their respective affiliates, prior to, or for any services they render in order to effectuate, the consummation of a business combination. However, such individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no limit on the amount of these out-of-pocket expenses and there will be no review of the reasonableness of the expenses by anyone other than our board of directors and audit committee, which includes persons who may seek reimbursement, or a court of competent jurisdiction if such reimbursement is challenged.
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Clawback Policy
In July 2024, our board of directors adopted a clawback policy (the “Clawback Policy”) permitting the Company to seek the recovery of incentive compensation received by any the Company’s current and former executive officers (as determined by the board in accordance with Section 10D of the Exchange Act and Nasdaq rules) and such other senior executives/employees who may from time to time be deemed subject to the Clawback Policy by the board (collectively, the “Covered Executives”) during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirement under the securities laws. The amount to be recovered will be the excess of the incentive compensation paid to the Covered Executive based on the erroneous data over the incentive compensation that would have been paid to the Covered Executive had it been based on the restated results, as determined by the board. If the board cannot determine the amount of excess incentive compensation received by the Covered Executive directly from the information in the accounting restatement, then it will make its determination based on a reasonable estimate of the effect of the accounting restatement. The foregoing description of the Clawback Policy does not purport to be complete and is qualified in its entirety by the terms and conditions of the Clawback Policy, a copy of which is attached hereto as Exhibit 97.1 and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of the date of this Annual Report by:
| ● | each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares; |
| ● | each of our officers and directors; and |
| ● | all of our officers and directors as a group. |
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our ordinary shares beneficially owned by them.
| Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership |
Approximate Percentage of Outstanding Ordinary Shares |
||||||
| YHN Partners I Limited(2) | 1,375,000 | 32.08 | % | |||||
| Poon Man Ka, Christy | 15,000 | * | % | |||||
| Yangyujia An | 30,000 | * | % | |||||
| Zhengming Feng | 25,000 | * | % | |||||
| Donghui Xu | 20,000 | * | % | |||||
| Min Zhang | 20,000 | * | % | |||||
| All directors and executive officers (five individuals) as a group | 125,000 | 2.92 | % | |||||
| Other 5% shareholders | ||||||||
| KARPUS MANAGEMENT, INC.(3) | 767,026 | 17.90 | % | |||||
| Barclays PLC(4) | 446,749 | 10.42 | % | |||||
| Mizuho Financial Group, Inc.(5) | 660,001 | 15.40 | % | |||||
| W. R. Berkley Corporation (6) | 673,553 | 15.72 | % | |||||
| Westchester Capital Management, LLC (7) | 398,000 | 9.29 | % | |||||
| Rivernorth Capital Management, LLC (8) | 445,000 | 10.38 | % | |||||
| Feis Equities LLC / Lawrence M. Feis (9) | 332,160 | 7.75 | % | |||||
| * | Less than 1%. |
| (1) | Unless otherwise indicated, the business address of each of the individuals is c/o YHN Acquisition I Limited, 2/F, Hang Seng Building, 200 Hennessy Road, Wanchai, Hong Kong. |
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| (2) | Represents shares held by YHN Partners I Limited, our sponsor. Includes 250,000 Ordinary Shares comprising the private units purchased by the sponsor. Pui Chun Wong is the controlling shareholder of our sponsor by virtue of having 100% voting power in the sponsor. The registered address for our sponsor is 1st Floor, Columbus Centre, P.O. Box 2283, Road Town, Tortola, British Virgin Islands. |
| (3) | Information is based solely on a report on Schedule 13G/A filed by Karpus Management, Inc., d/b/a Karpus Investment Management (“Karpus” or the “Reporting Person”) on January 7, 2026. Karpus is a registered investment adviser under Section 203 of the Investment Advisers Act of 1940. Karpus is controlled by City of London Investment Group plc (“CLIG”), which is listed on the London Stock Exchange; however, in accordance with SEC Release No. 34-39538 (January 12, 1998), effective informational barriers have been established between Karpus and CLIG such that voting and investment power over the subject securities is exercised by Karpus independently of CLIG, and, accordingly, attribution of beneficial ownership is not required between Karpus and CLIG. The shares are owned directly by the accounts managed by Karpus. |
| (4) | Information is based solely on a report on Schedule 13G/A filed by Barclays PLC on March 21, 2025. Business address is 1 Churchill Place, London - E14 5HP. |
| (5) | Information is based solely on a report on Schedule 13G/A filed by Mizuho Financial Group, Inc. on August 13, 2025. Mizuho Financial Group, Inc., Mizuho Bank, Ltd. and Mizuho Americas LLC may be deemed to be indirect beneficial owners of said equity securities directly held by Mizuho Securities USA LLC which is their wholly-owned subsidiary. |
| (6) | Information is based solely on a report on Schedule 13G/A filed by W. R. Berkley Corporation on August 8, 2025. The principal business address is 475 Steamboat Road, Greenwich, CT 06830. |
| (7) | Information is based solely on a report on Schedule 13G filed by Westchester Capital Management, LLC on May 14, 2025. Westchester Capital Management, LLC ("Westchester") is a Delaware limited liability company. Westchester, a registered investment adviser, serves as sub-advisor to each of The Merger Fund ("MF"), The Merger Fund VL ("MF VL"), Virtus Westchester Credit Event Fund ("CEF") and JNL Multi-Manager Alternative Fund ("JARB" together with MF, MF VL and CEF, the "Funds"). The Funds directly hold ordinary shares of the Company for the benefit of the investors in those Funds. Mr. Roy Behren and Mr. Michael T. Shannon each serve as Co-Presidents of Westchester. The principal business address is 100 Summit Lake Drive, Valhalla, NY 10595. |
| (8) | Information is based solely on a report on Schedule 13G filed by Rivernorth Capital Management, LLC on August 14, 2025. The principal business address is 360 S. Rosemary Avenue, Ste. 1420, West Palm Beach, Florida 33401. |
| (9) | Information is based solely on a report on Schedule 13G/A filed by Feis Equities LLC and Lawrence M. Feis on February 2, 2026. The principal business address is 1740 Waukegan Road, Suite 206, Glenview, Illinois 60025. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Insider Shares
In December 2023 and April 2024, the Company issued an aggregate of 1,725,000 insider shares to the initial shareholders in exchange for cash of $25,000. In November 2024, the underwriter did not exercise their 45-day option to purchase 900,000 Units, therefore 225,000 founder shares are forfeited in February 2025. Our initial shareholders have agreed not to transfer, assign or sell any of the insider shares (except to certain permitted transferees) until 180 days after the completion of our initial business combination, Notwithstanding the foregoing, the insider shares will be released from the 180-day lock-up on the earlier of (1) 150 days after the date of the consummation of our initial business combination if the closing price of our ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination or (2) after the date of the consummation of our initial business combination, and subsequently, we consummate a liquidation, merger, share exchange or other similar transaction which results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property.
| 35 |
Private Placement Units
Simultaneously with the closing of the IPO, the Company consummated the private placement (“Private Placement”) with its sponsor of 250,000 units (the “Private Units”) at a price of $10.00 per Private Unit, generating total proceeds of $2,500,000. The Private Units are identical to the Units sold in the IPO except with respect to certain registration rights and transfer restrictions. Additionally, our sponsor has also agreed not to transfer, assign or sell any of Private Units (including the ordinary shares issuable upon exercise of the Private Units) until 180 days after the completion of our initial business combination (except with respect to permitted transferees). Any permitted transferees will be subject to the same restrictions and other agreements of our initial shareholders with respect to any insider shares, and the private units, as applicable. However, if after our initial business combination, there is a transaction whereby all the outstanding shares are exchanged or redeemed for cash (as would be the case in a post-asset sale liquidation) or another issuer’s shares, then the insider shares, or the private units (or any shares of Ordinary Shares thereunder) shall be permitted to participate. The holders were granted certain demand and piggyback registration rights in connection with the Private Units. The Private Units were issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, as the transaction did not involve a public offering.
Conflicts of Interest
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. Our third amended and restated memorandum and articles of association provide that we renounce our interest in any corporate opportunity offered to any director or officer unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company, (ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another legal obligation. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor his or her obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us. We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors will materially affect our ability to complete our initial business combination.
Services Arrangements
On April 12, 2024, we entered into an administrative services agreement with our Sponsor, pursuant to which the Sponsor agreed to make available to the Company certain general and administrative services, including office space and secretarial and administrative services, as the Company may require from time to time. The Company has agreed to pay to the affiliate of the Sponsor $10,000 per month continuing until the earlier of the consummation by the Company of a Business Combination or the Company’s liquidation. For the years ended December 31, 2025 and 2024, the Company incurred $154,000 and $30,000 in such fees.
There will be no finder’s fees, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation paid by us to our Sponsor, officers or directors, or any affiliate of our Sponsor or officers prior to, or in connection with any services rendered in order to effectuate, the consummation of our Business Combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as payment of customary fees incurred during the election of directors and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our Sponsor, executive officers or directors, or our or their affiliates.
After the completion of our Business Combination, directors or members of our Management Team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our stockholders in connection with a proposed Business Combination. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining executive officer and director compensation.
| 36 |
Related Party Loans and Advances
On April 12, 2024, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $500,000 (the “Promissory Note”). The Promissory Note is non-interest bearing and payable on the earlier of consummation of an initial public offering of our securities or the date on we determine not to conduct an initial public offering of our securities.
As of December 31, 2025 and 2024, we had a temporary advance of $790,038 and $60,059 from our Sponsor, respectively. The balance is unsecured, interest-free and has no fixed terms of repayment.
Registration Rights
On September 17, 2024, we entered into a registration rights agreement pursuant to which the Company granted certain registration rights to the holders of the insider shares, Private Placement Units (and their underlying securities) and any Units that may be issued upon conversion of the working capital loans (and underlying securities). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The following is a summary of fees paid or to be paid to Adeptus Partners, LLC (“Adeptus”), for services rendered.
Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by the chosen registered public accounting firm in connection with regulatory filings. The aggregate fees billed by Adeptus for professional services rendered for the audit of our annual financial statements and other required filings with the SEC for years ended December 31, 205 and 2024 totaled approximately $41,000 and $71,000, respectively. The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings.
Audit-Related Fees. Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. We did not pay Adeptus for consultations concerning financial accounting and reporting standards during the years ended December 31, 2025 and 2024, respectively.
Tax Fees. We did not pay Adeptus for tax planning and tax advice for the years ended December 31, 2025 and 2024, respectively.
All Other Fees. We did not pay Adeptus for other services for the years ended December 31, 2025 and 2024, respectively.
Pre-Approval of Services
Our audit committee was formed upon the consummation of our IPO. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
| (a) | The following documents are filed as part of this Annual Report on Form 10-K: |
| (1) | Financial Statements |
| (1) | Financial Statement Schedules: |
None.
| (2) | Exhibits: |
The following exhibits are filed as part of or incorporated by reference into, this Annual Report on Form 10-K.
EXHIBIT INDEX
| Incorporated by Reference | ||||||||||
| Exhibit | Description | Schedule/ Form |
File Number | Exhibits | Filing Date | |||||
| 1.1 | Underwriting Agreement, dated September 17, 2024, by and between the Company and Lucid Capital Markets, LLC | Form 8-K | 001-42251 | 1.1 | September 19, 2024 | |||||
| 3.1 | Third Amended and Restated Memorandum and Articles of Association | Form 8-K | 001-42251 | 3.1 | September 19, 2024 | |||||
| 3.2 | Fourth Amended and Restated Memorandum and Articles of Association | Form 8-K | 001-42251 | 3.1 | December 10, 2025 | |||||
| 4.1 | Specimen Unit Certificate of the Company | Form S-1 | 333-279308 | 4.1 | August 2, 2024 | |||||
| 4.2 | Specimen Ordinary Share Certificate of the Company | Form S-1 | 333-279308 | 4.2 | August 2, 2024 | |||||
| 4.3 | Specimen Rights Certificate of the Company | Form S-1 | 333-279308 | 4.3 | August 2, 2024 | |||||
| 4.4 | Rights Agreement, dated September 17, 2024 by and between the Company and Continental Stock Transfer & Trust Company | Form 8-K | 001-42251 | 4.2 | September 19, 2024 | |||||
| 4.5* | Description of Registrant’s Securities | |||||||||
| 38 |
| 39 |
| 31.1* | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||
| 31.2* | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||
| 32.1** | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. | |||||||||
| 32.2** | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. | |||||||||
| 97.1 | Clawback Policy | Form 10-K | 001-42251 | 97.1 | March 20, 2025 | |||||
| 101.INS | Inline XBRL Instance Document. | |||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document. | |||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith. |
| ** | Furnished herewith. |
ITEM 16. FORM 10-K SUMMARY
Not applicable.
| 40 |
YHN ACQUISITION I LIMITED
Financial Statements
For the Year Ended December 31, 2025
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Shareholders of YHN Acquisition I Limited
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of YHN Acquisition I Limited (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of income, changes in shareholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has limited cash, a working capital deficit of $692,191, and an accumulated deficit and needs to raise additional funds to meet its obligations and sustain operations which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the Company’s auditor since 2024.
PCAOB: 3686
March 26, 2026
| F-2 |
YHN ACQUISITION I LIMITED
CONSOLIDATED BALANCE SHEETS
| December 31, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepayments | ||||||||
| Total current assets | ||||||||
| Cash and marketable securities held in trust | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accrued expenses | $ | $ | ||||||
| Amount due to sponsor | ||||||||
| Total Current Liabilities | ||||||||
| Deferred underwriting compensation | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and contingencies (Note 7) | ||||||||
| Ordinary shares subject to possible redemption, and shares, respectively (at redemption price of $ and $ per share, respectively) | ||||||||
| Shareholders’ Deficit: | ||||||||
| Ordinary shares, | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| F-3 |
YHN ACQUISITION I LIMITED
CONSOLIDATED STATEMENTS OF INCOME
| For the Year ended December 31, 2025 | For the Year ended December 31, 2024 | |||||||
| Formation and operating costs | $ | ( | ) | $ | ( | ) | ||
| Other income: | ||||||||
| Dividend income | ||||||||
| Interest income | ||||||||
| Total other income | ||||||||
| NET INCOME | $ | $ | ||||||
| Basic and diluted weighted average shares outstanding, ordinary shares subject to possible redemption | ||||||||
| Basic and diluted net income per share, ordinary shares subject to possible redemption | $ | $ | ||||||
| Basic and diluted weighted average shares outstanding, ordinary shares not subject to possible redemption | ||||||||
| Basic and diluted net loss per share, ordinary shares not subject to possible redemption | $ | ) | $ | ) | ||||
See accompanying notes to consolidated financial statements.
| F-4 |
YHN ACQUISITION I LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
| Year ended December 31, 2025 | ||||||||||||||||
| Ordinary shares | Accumulated deficit | Total shareholders’ deficit | ||||||||||||||
| No. of shares | Amount | |||||||||||||||
| Balance as of December 31, 2024 | $ | $ | ( | ) | $ | ( | ) | |||||||||
| Subsequent remeasurement of ordinary shares subject to possible redemption | – | ( | ) | ( | ) | |||||||||||
| Net income | – | |||||||||||||||
| Balance as of December 31, 2025 | $ | $ | ( | ) | $ | ( | ) | |||||||||
| Year ended December 31, 2024 | ||||||||||||||||||||
| Ordinary shares | Stock subscription receivable | Accumulated | Total shareholders’ deficit | |||||||||||||||||
| No. of shares | Amount | |||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||
| Capital contribution paid | – | |||||||||||||||||||
| Sale of units in initial public offering, net of offering costs | ||||||||||||||||||||
| Sale of units to the founder in private placement | ||||||||||||||||||||
| Initial classification of ordinary shares subject to possible redemption | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Allocation of offering costs to ordinary shares subject to possible redemption | – | |||||||||||||||||||
| Share forfeiture | ( | ) | ||||||||||||||||||
| Accretion of carrying value to redemption value | – | ( | ) | ( | ) | ( | ) | |||||||||||||
| Subsequent remeasurement of ordinary shares subject to possible redemption | – | ( | ) | ( | ) | |||||||||||||||
| Net income | – | |||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
See accompanying notes to consolidated financial statements.
| F-5 |
YHN ACQUISITION I LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year ended December 31, 2025 | Year ended December 31, 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Dividend income earned in cash and investments held in trust account | ( | ) | ( | ) | ||||
| Change in operating assets and liabilities: | ||||||||
| Prepayments | ( | ) | ||||||
| Accrued expenses | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Cash withdrawn from Trust Account in connection to redemption | ||||||||
| Proceeds deposited in Trust Account | ( | ) | ( | ) | ||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from public offering, net of offering costs | ||||||||
| Proceeds from private placement | ||||||||
| Capital contribution paid | ||||||||
| Proceeds from promissory note - related party | ||||||||
| Repayment to related party under promissory note | ( | ) | ||||||
| Redemption of ordinary shares | ( | ) | ||||||
| Advance from sponsor | ||||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| NET CHANGE IN CASH | ( | ) | ||||||
| CASH, BEGINNING OF PERIOD | ||||||||
| CASH, END OF PERIOD | $ | $ | ||||||
| Non-cash investing and financing activities | ||||||||
| Deferred offering costs paid by related party | $ | $ | ||||||
| Initial classification of ordinary shares subject to possible redemption | $ | $ | ||||||
| Allocation of offering costs to ordinary shares subject to possible redemption | $ | $ | ||||||
| Accretion of carrying value to redemption value | $ | $ | ||||||
| Subsequent remeasurement of ordinary shares subject to possible redemption | $ | $ | ||||||
| Accrued underwriting compensation | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| F-6 |
YHN ACQUISITION I LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND
YHN Acquisition I Limited (the “Company”) is a blank check company incorporated on December 18, 2023, under the laws of the British Virgin Islands for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation, purchasing all or substantially all of the assets of, entering into contractual arrangements, or engaging in any other similar business combination with one or more businesses or entities (“Business Combination”). The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination.
The Company is an early-stage company and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage companies and emerging growth companies. The Company has selected December 31 as its fiscal year end.
YHNA MS I Limited (“PubCo” or “Purchaser”) is a company incorporated on April 29, 2025, under the laws of the Cayman Islands for the purpose of effecting the business combination. PubCo is wholly owned by the Company.
YHNA MS II Limited (“Merger Sub”) is a company incorporated on April 29, 2025, under the laws of the Cayman Islands for the purpose of effecting the business combination. Merger Sub is wholly owned by PubCo.
As of December 31, 2025, the Company had not yet commenced any operations. All activities through December 31, 2025 relate to the Company’s formation and the initial public offering (the “Initial Public Offering”). The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration statement for the Company’s
Initial Public Offering was declared effective on September 17, 2024. On September 19, 2024, the Company consummated the Initial Public
Offering of units (the “Public Units”), at $ per Public Unit, generating gross proceeds of $
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of units (the “Private Placement Units”) at a price of $ per
Private Placement Unit in a private placement to YHN Partners I Limited (the “Sponsor”),
generating gross proceeds of $
Transaction costs amounted to $
The Company listed the Units on the Nasdaq Global Market (“NASDAQ”). The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the Private Units, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination. NASDAQ rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (as defined below) (less any deferred underwriting commissions and interest released to pay taxes payable) at the time of the signing a definitive agreement in connection with a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination. Upon the closing of the Initial Public Offering, management has agreed that at least $10.05 per Unit, including the proceeds of the sale of the Private Units will be held in a trust account (“Trust Account”) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s shareholder, as described below.
| F-7 |
The Company will provide its shareholders with the opportunity to redeem all or a portion of their ordinary shares issued at its Initial Public Offering (the “Public Shares”) upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then on deposit in the Trust Account (initially $10.05 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to shareholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 7). The ordinary shares subject to redemption will be recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Memorandum and Articles of Association, offer such redemption pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.
The Company’s initial shareholders (the “initial shareholders”) have agreed (a) to vote their founder shares, the ordinary shares included in the Private Placement Units (the “Private Placement Shares”) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination, (b) not to propose, or vote in favor of, an amendment to the Company’s Memorandum and Articles of Association that would stop the public shareholders from converting or selling their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) unless the Company provides public shareholders with the opportunity to redeem their Public Shares for cash from the Trust Account in connection with any such vote; (c) not to redeem any founder shares and Private Placement Shares as well as any Public Shares purchased during or after the Initial Public Offering for cash from the Trust Account in connection with a shareholder vote to approve a Business Combination (or sell any shares in a tender offer in connection with a Business Combination) or a vote to amend the provisions of the Memorandum and Articles of Association relating to shareholder’s rights of pre-Business Combination activity and (d) that the founder shares and Private Placement Shares shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the initial shareholders will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or after the Initial Public Offering if the Company fails to complete its Business Combination. The Company had entered into an amendment to the investment management trust agreement with Continental Stock Transfer & Trust Company to extend the date on which to commence liquidating the trust account. The Company will have until June 19, 2026 (the “Combination Period”) initially to consummate a Business Combination.
If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (net of taxes payable), which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. The underwriters have agreed to waive its rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than $10.05.
| F-8 |
The Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below $10.05 per share (whether or not the underwriters’ over-allotment option is exercised in full), except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the sponsor will not be responsible to the extent of any liability for such third party claims. The Company will seek to reduce the possibility that the sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
On January 15, 2025, the Company entered into a legally binding letter of intent (the “Letter of Intent”) with Mingde Technology Limited (“Mingde” or “Holdco”), a Cayman Islands holding company, and Zhejiang Xiaojianren Internet Technology Co., Ltd (“XJR”), a company established in China and in the business of operating online sports platforms and providing technological solutions for health product stores. Pursuant to the Letter of Intent, the Company will effect a business combination (the “Business Combination”) with Holdco based on an equity valuation of $396,000,000.
On April 3, 2025, the Company entered into
that certain Business Combination Agreement with Mingde pursuant to which, (a) immediately prior to the Closing, Mingde will merge
with and into Purchaser, with Purchaser continuing as the surviving entity (the “Reincorporation Merger”), (b) at
the Closing, the parties will effect a merger of Merger Sub, a Cayman Islands company and wholly owned subsidiary of Purchaser (the
“Merger Sub”), to be formed for the sole purpose of merging with and into the Mingde (the “Acquisition
Merger”) in which Mingde will be the surviving entity and a wholly owned subsidiary of Purchaser (the Acquisition Merger,
together with the Reincorporation Merger and the other transactions contemplated by the Business Combination Agreement and the
Additional Agreements, the “Transactions”); and (c) following the Closing, Purchaser will be a publicly traded
company listed on NASDAQ. The Merger Consideration is $396,000,000. The
Purchaser Ordinary Shares to be delivered by Purchaser to the Company Shareholders (the “Merger Consideration
Shares”) is based on an aggregate pre-money equity value for
On May 8, 2025, each of Purchaser, Merger Sub, Mingde and the Company executed that certain Joinder Agreement to the Business Combination Agreement (the “Joinder Agreement”), whereby each of Purchaser and Merger Sub have agreed, effective upon execution, that it shall become a party to the Business Combination Agreement and shall be fully bound by, and subject to, all of the covenants, terms, representations, warranties, rights, obligations and conditions of the Business Combination Agreement as though an original party thereto.
On June 3, 2025, each of Purchaser, Merger
Sub, Mingde and the Company executed that certain Amended and Restated Business Combination Agreement (the “Amended and
Restated Business Combination Agreement” or as restated and amended, the “Business Combination
Agreement”) to provide for an earnout mechanism whereby up to an additional $70,000,000 worth of Earnout Consideration
Shares may be paid to the Mingde Shareholders as contingent post-closing earnout consideration. As a result, the aggregate
consideration for the Acquisition Merger is $
| F-9 |
On December 8, 2025, in connection with the
shareholders vote at the Annual Meeting,
shares were redeemed by certain shareholders at a price of approximately $
per share, including interest generated and extension payments deposited in the Trust Account, in an aggregate amount of $
On December 8, 2025, the Company had entered into an amendment (the “Trust Amendment”) to the investment management trust agreement, dated as of September 17, 2024, by and between the Company and Continental Stock Transfer & Trust Company, to provide the Company with the discretion to extend the date on which to commence liquidating the trust account (the “Trust Account”) established in connection with the Company’s initial public offering (the “IPO”) by three (3) times for an additional three (3) months each time from December 19, 2025 to September 19, 2026 by depositing into the trust account an aggregate amount of $150,000 for each three-month extension. The Company filed the fourth amended and restated memorandum and articles of association on December 8, 2025, giving the Company the right to extend the date by which the Company has to consummate a business combination from December 19, 2025 (the date that is 15 months from the closing date of the IPO) to September 19, 2026 (the date that is 24 months from the closing date of the IPO).
On December 15, 2025, the parties to the Business Combination Agreement further entered into an Amendment No. 2 to the Business Combination Agreement (the “Amendment No. 2”). The Amendment No. 2 serves to amend the Business Combination Agreement to extend the Outside Closing Date (as defined in the Business Combination Agreement) to June 19, 2026.
As of the date of this report, the Company
has extended two times by an additional three-month each time, and so it now has until June 19, 2026 to consummate a business
combination. Pursuant to the terms of the current amended and restated memorandum and articles of association and the trust
agreement between the Company and Continental Stock Transfer & Trust Company, LLC, in order to extend the time available for the
Company to consummate the initial business combination, the Company’s insiders or their affiliates or designees, must deposit
into the Trust Account $150,000
on or prior to the date of the applicable deadline. On each of December 15, 2025 and March 19, 2026, the Company has deposited in
an amount of $
Going Concern Consideration
As of December 31, 2025, the Company had
cash of $
The Company initially had 15 months from the consummation of the Initial Public Offering to consummate the initial Business Combination. If the Company does not complete a Business Combination within 15 months from the consummation of the Initial Public Offering, the Company will trigger an automatic winding up, dissolution and liquidation pursuant to the terms of the Amended and Restated Memorandum and Articles of Association. As a result, this has the same effect as if the Company had formally gone through a voluntary liquidation procedure under the Companies Act (As Revised) of the British Virgin Islands. Accordingly, no vote would be required from the shareholders to commence such a voluntary winding up, dissolution and liquidation. However, the Company may extend the period of time to consummate a Business Combination 2 times (for a total of up to 21 months from the consummation of the Initial Public Offering to complete a Business Combination). If the Company is unable to consummate the Company’s Initial Business Combination by June 19, 2026 (unless further extended), the Company will, as promptly as possible but not more than ten business days thereafter, redeem 100% of the Company’s outstanding public shares for a pro rata portion of the funds held in the Trust Account, including a pro rata portion of any interest earned on the funds held in the Trust Account and not necessary to pay taxes, and then seek to liquidate and dissolve. However, the Company may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of the Company’s public shareholders.
| F-10 |
If the Company does not complete a business combination by September 19, 2026 (assuming full extension), the Company will (i) as promptly as practicable, to cease all operations except for the purpose of making redemption and the subsequent winding up of the Company’s affairs; (ii) as promptly as reasonably possible but not more than ten (10) business days thereafter, redeem 100% of the Company’s outstanding public shares for a pro rata portion of the funds held in the trust account, including a pro rata portion of any interest earned on the funds held in the trust account and not previously released to the Company or necessary to pay the Company’s taxes, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its board of directors, seek to liquidate and dissolve. However, the Company may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of its public shareholders. In the event of dissolution and liquidation, the public rights will expire and will be worthless.
In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that if the Company is unsuccessful in consummating an initial business combination within the prescribed period of time from the closing of the IPO, the requirement that the Company cease all operations, redeem the public shares and thereafter liquidate and dissolve. Further, if the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide assurance that new financing will be available to it on commercially acceptable terms if at all. These conditions raise substantial doubt about the ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
· Basis of presentation
These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
· Principles of consolidation
The consolidated financial statements include the consolidated financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.
A subsidiary is the entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.
The accompanying consolidated financial statements reflect the activities of the Company and each of the following entities:
| Schedule of consolidated financial statements reflect the activities | ||||
| Name | Background | Ownership | ||
| YHNA MS I Limited (“PubCo”) | A Cayman Islands company Incorporated on April 29, 2025 |
|||
| YHNA MS II Limited (“Merger Sub”) | A Cayman Islands company Incorporated on April 29, 2025 |
| · | Emerging growth company |
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
| F-11 |
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
· Use of estimates
In preparing these consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results may differ from these estimates.
· Cash and cash equivalents
The Company considers all short-term
investments with an original maturity of three months or less when purchased to be cash equivalents. The company had $
· Cash and marketable securities held in trust account
At December 31, 2025 and 2024, substantially all of the assets held in the Trust Account were held in money market funds, which are invested primarily in U.S. Treasury securities. These securities are presented on the consolidated balance sheets at fair value at the end of each reporting period. Earnings on these securities are included in dividend income in the accompanying consolidated statements of income and is automatically reinvested. The fair value for these securities is determined using quoted market prices in active markets.
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC 480, “Distinguishing Liabilities from Equity”. Ordinary share subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Accordingly, as of December 31, 2025 and 2024, and ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s consolidated balance sheets, respectively. If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).
| F-12 |
As of December 31, 2025 and 2024, the ordinary shares subject to possible redemption reflected on the consolidated balance sheets are disclosed in the following table:
| Schedule of ordinary shares subject to possible redemption | ||||
| Amount | ||||
| Gross proceeds | $ | |||
| Less: | ||||
| Proceeds allocated to Public Rights | ( | ) | ||
| Offering costs of Public Shares | ( | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value - 2024 | ||||
| Subsequent remeasurement of ordinary shares subject to possible redemption - 2024 | ||||
| Ordinary shares subject to possible redemption as of December 31, 2024 | ||||
| Less: | ||||
| Redemption of ordinary shares | ( | ) | ||
| Plus: | ||||
| Subsequent remeasurement of ordinary shares subject to possible redemption - 2025 | ||||
| Ordinary shares subject to possible redemption as of December 31, 2025 | $ | |||
· Rights accounting
Rights — Except in cases where the Company is not the surviving company in a Business Combination, each holder of a right will automatically receive one-tenth (1/10) of one ordinary share upon consummation of a Business Combination, even if the holder of a right redeemed all shares held by him, her or it in connection with a Business Combination or an amendment to the Company’s Amended and Restated Memorandum and Articles of Association with respect to its pre-business combination activities. In the event that the Company will not be the surviving company upon completion of a Business Combination, each holder of a right will be required to affirmatively redeem his, her or its rights in order to receive the one-tenth (1/10) of a share underlying each right upon consummation of the Business Combination. No additional consideration will be required to be paid by a holder of Public Rights in order to receive his, her or its additional ordinary shares upon consummation of a Business Combination. The shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the Company). If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the ordinary shares will receive in the transaction on an as-converted into ordinary share basis.
The Company will not issue fractional shares in connection with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of the British Virgin Islands law. As a result, the holders of the rights must hold rights in multiples of ten in order to receive shares for all of the holders’ rights upon closing of a Business Combination. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, the rights may expire worthless.
The Company accounts for rights as either equity-classified or liability-classified instruments based on an assessment of the right’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the rights are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the rights meet all of the requirements for equity classification under ASC 815, including whether the rights are indexed to the Company’s own ordinary shares and whether the right holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of right issuance and as of each subsequent quarterly period end date while the rights are outstanding.
| F-13 |
For issued or modified rights that meet all of the criteria for equity classification, the rights are required to be recorded as a component of equity at the time of issuance. For issued or modified rights that do not meet all the criteria for equity classification, the rights are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the rights are recognized as a non-cash gain or loss on the consolidated statements of income.
As the rights issued upon the IPO and private placements meet the criteria for equity classification under ASC 815, therefore, the rights are classified as equity.
· Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account.
· Income taxes
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how
companies should recognize, measure, present, and disclose in their consolidated financial statements uncertain tax positions taken or
expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the consolidated financial statements
when it is more likely than not the position will be sustained upon examination by the tax authorities. The Company’s management
determined that the British Virgin Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and
penalties related to unrecognized tax benefits, if any, as income tax expense. There were
The Company may be subject to potential examination by foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with foreign tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
The Company is considered to be an exempted British Virgin Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the British Virgin Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
| · | Net income (loss) per share |
The Company calculates net income (loss) per share in accordance with ASC Topic 260, “Earnings per Share”. In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable ordinary shares and non-redeemable ordinary shares and the undistributed income (loss) is calculated using the total net income (loss) less any dividends paid. The Company then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable ordinary shares. Any remeasurement of the accretion to the redemption value of the ordinary shares subject to possible redemption was considered to be dividends paid to the public stockholders. Accretion associated with the redeemable shares of ordinary share is excluded from earnings per share as the redemption value approximates fair value.
| F-14 |
Net income (loss) per share is presented in the consolidated statements of income as follows:
| Schedule of net income (loss) per share | ||||||||||||||||
| For the Year ended December 31, 2025 | For the Year ended December 31, 2024 | |||||||||||||||
| Redeemable Ordinary Share | Non-Redeemable Ordinary Share | Redeemable Ordinary Share | Non-Redeemable Ordinary Share | |||||||||||||
| Basic and diluted net income (loss) per share: | ||||||||||||||||
| Numerators: | ||||||||||||||||
| Other income earned in investments held in Trust Account | $ | $ | $ | $ | ||||||||||||
| Total expenses | ( | ) | ( | ) | ( | )) | ( | ) | ||||||||
| Total allocation to redeemable and non-redeemable ordinary share | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Denominators: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Basic and diluted net income (loss) per share | $ | $ | ) | $ | $ | ) | ||||||||||
· Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
· Fair value of financial instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement” (“ASC 820”), approximates the carrying amounts represented in the accompanying consolidated balance sheets, primarily due to their short-term nature.
The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.
| Level 1: | Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. | |
| Level 2: | Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. | |
| Level 3: | Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. |
| F-15 |
The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2025 and 2024, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
| Schedule of assets and liabilities that were measured at fair value on a recurring basis | ||||||||||||||||
| December 31, | Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
| Description | 2025 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
| Assets: | ||||||||||||||||
| U.S. Treasury Securities held in Trust Account | $ | $ | $ | $ | ||||||||||||
| December 31, | Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
| Description | 2024 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
| Assets: | ||||||||||||||||
| U.S. Treasury Securities held in Trust Account | $ | $ | $ | $ | ||||||||||||
· Recent accounting pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s consolidated financial statements.
NOTE 3 – INITIAL PUBLIC OFFERING
On September 19, 2024, the Company sold Public Units, at a purchase price of $10.00 per Public Unit. Each Unit consists of one ordinary share and one Public Right. Each whole Public Right entitles the holder to receive one-tenth (1/10) ordinary share upon consummation of initial business combination.
All of the 6,000,000 public shares sold as part of the Public Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such public shares if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s Amended and Restated Memorandum and Articles of Association, or in connection with the Company’s liquidation.
In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity.
If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).
| F-16 |
NOTE 4 – PRIVATE PLACEMENT
Simultaneously with the closing of the
Initial Public Offering, the Company consummated a private placement of
Private Placement Units, at a price of $
The Private Placement Units are identical to the Public Units sold in the Initial Public Offering except for certain registration rights and transfer restrictions.
NOTE 5 – RELATED PARTY TRANSACTIONS
Founder Shares
On December 18, 2023, the Company issued founder shares with no par value in consideration of $. On December 31, 2023, the Company authorized to issue an aggregate of founder shares with no par value to the initial shareholder, including an aggregate of 225,000 ordinary shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the initial shareholder will collectively own 20% of the issued and outstanding shares after the Initial Public Offering (excluding the sale of the Private Units and assuming the initial shareholders do not purchase any Units in the Initial Public Offering) (see Note 6) for an aggregate purchase price of $. In November 2024, the underwriter did not exercise their 45-day option to purchase 900,000 Units, therefore founder shares were forfeited.
Private Placement
The Company consummated the sale of Private
Placement Units at a price of $10.00 per Private Placement Unit in a private placement to the Sponsor, generating gross proceeds of $
Administrative Services Agreement
An affiliate of the Sponsor agreed that,
commencing from the date that the Company’s securities are first listed on NASDAQ through the earlier of the Company’s
consummation of a Business Combination and its liquidation, to make available to the Company certain general and administrative
services, including office space, administrative and support services, as the Company may require from time to time. The Company has
agreed to pay the affiliate of the Sponsor $10,000 per month for these services commencing on the closing date of this offering for
15 months (or up to 21 months). For years ended December 31, 2025 and 2024, the Company incurred $
Amount due to Sponsor
As of December 31, 2025 and 2024, the
Company had a temporary advance of $
| F-17 |
NOTE 6 – SHAREHOLDERS’ DEFICIT
Ordinary shares
The Company is authorized to issue
ordinary shares with
As of December 31, 2025 and 2024, there were and ordinary shares issued and outstanding excluding and ordinary shares subject to possible redemption, respectively.
Rights
Each holder of a right will receive one-tenth (1/10) ordinary share upon consummation of a Business Combination, even if the holder of such right redeemed all shares held by it in connection with a Business Combination. No fractional shares will be issued upon exchange of the rights. No additional consideration will be required to be paid by a holder of rights in order to receive its additional shares upon consummation of a Business Combination as the consideration related thereto has been included in the Unit purchase price paid for by investors in the Initial Public Offering. If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the ordinary shares will receive in the transaction on an as-converted into ordinary share basis and each holder of a right will be required to affirmatively convert its rights in order to receive 1/10 share underlying each right (without paying additional consideration). The shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the Company).
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Risk and uncertainties
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from whom shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. The IR Act applies to repurchases that occur after December 31, 2022.
Therefore, any redemption or other repurchase that occurs after December 31, 2022, in connection with a business combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a business combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the business combination, extension or otherwise, (ii) the structure of a business combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a business combination (or otherwise issued not in connection with a business combination but issued within the same taxable year of a business combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming shareholders, the mechanics of any required payments of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a business combination and in the Company’s ability to complete a business combination.
| F-18 |
Registration Rights
Pursuant to a registration rights agreement entered into on September 19, 2024, the holders of the Founder Shares, Private Placement Units (including securities contained therein), and units (including securities contained therein) that may be issued on conversion of working capital loans or extension loans (and) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of this offering requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company’s register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day option to purchase up to 900,000 Units (over and above 6,000,000 Units referred to above) solely to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. In November 2024, the underwriters did not exercise their 45-day option to purchase 900,000 Units.
The underwriters are entitled to a cash underwriting discount of 2.5% of the gross proceeds of the Initial Public Offering, or $1,500,000, upon the closing of the Business Combination, subject to a minimum of $500,000.
NOTE 8 – SEGMENT INFORMATION
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their consolidated financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.
The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Financial Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has operating segment.
When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics, which includes formation and operating costs and interest and dividends earned on investments held in Trust Account which are included in the accompanying consolidated statements of income.
The key measures of segment profit or loss reviewed by the Company’s CODM are earned on investments held in Trust Account and formation and operating costs. The CODM reviews earned on investments held in Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the trust agreement. Formation and operating costs are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a business combination within the business combination period. The CODM also reviews formation and operating costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.
| F-19 |
NOTE 9 – SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued, the Company has evaluated all events or transactions that occurred after the balance sheet date, up through the date the Company issued the consolidated financial statements.
On March 19, 2026, the Company has deposited in an amount of $150,000 into the Trust Account in order to extend the amount of available time to complete a business combination until June 19, 2026.
| F-20 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| YHN ACQUISITION I LIMITED | ||
| By: | /s/ Poon Man Ka, Christy | |
| Name: | Poon Man Ka, Christy | |
| Title: | Chief Executive Officer | |
| Dated: March 31, 2026 |
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Poon Man Ka, Christy, his or her attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Name | Position | Date | ||
| /s/ Poon Man Ka, Christy | Chief Executive Officer | March 31, 2026 | ||
| Poon Man Ka, Christy | (Principal executive officer), Director and Chairperson of the Board of Directors | |||
| /s/ Yangyujia An | Chief Financial Officer and Director | March 31, 2026 | ||
| Yangyujia An | (Principal financial and accounting officer) | |||
| /s/ Zhengming Feng | Independent Director | March 31, 2026 | ||
| Zhengming Feng | ||||
| /s/ Donghui Xu | Independent Director | March 31, 2026 | ||
| Donghui Xu | ||||
| /s/ Min Zhang | Independent Director | March 31, 2026 | ||
| Min Zhang |
| 41 |
Exhibit 4.5
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO
SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
General
YHN Acquisition I Limited (“we,” “our,” “us” or “Company”) is a BVI business company (company number 2138495) and our affairs are governed by our fourth amended and restated memorandum and articles of association, the Companies Act and common law of the British Virgin Islands. Based upon our fourth amended and restated memorandum and articles of association, our authorized share capital consists of 500,000,000 ordinary shares with no par value each of a single class. As of the date of the Report, 4,285,821 ordinary shares are issued and outstanding. No preferred shares are issued or outstanding or authorized by our constitutional documents.
As of December 31, 2025, we had the following three classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): our (i) units, consisting of one ordinary share and one right to receive one-tenth (1/10) of one ordinary share upon the consummation of an initial business combination, (ii) ordinary shares, no par value, and (iii) rights, with each right entitling its holder to receive one-tenth (1/10) of one ordinary share upon the consummation of an initial business combination.
Defined terms used herein but not otherwise defined shall have the meaning ascribed to such terms in the Report.
Units
Each unit consists of one ordinary share and one right to receive one-tenth (1/10) of one ordinary share upon the consummation of an initial business combination. Each right entitles the holder thereof to receive one-tenth (1/10) of an ordinary share upon consummation of our initial business combination. In addition, we will not issue fractional shares in connection with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of British Virgin Islands Law. As a result, you must hold rights in multiples of ten in order to receive shares for all of your rights upon closing of a business combination.
The ordinary shares and rights began to trade separately on November 8, 2024.
Ordinary Shares
Our shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. In connection with any vote held to approve our initial business combination, all of our initial shareholders, as well as all of our officers and directors, have agreed to vote their respective ordinary shares owned by them immediately prior to our IPO and any shares purchased in the IPO or following the IPO in the open market (other than shares acquired outside the redemption process in connection with our initial business combination, in compliance with Rule 14e-5 of the Exchange Act) in favor of the proposed business combination.
We will proceed with the business combination only if we have net tangible assets of at least $5,000,001 (after payment of deferred underwriting fees and commissions, and net of taxes payable on the income earned on the trust account and funds previously released to the company to pay our taxes) upon consummation of such business combination and a majority of the ordinary shares voted are voted in favor of the business combination. At least seven clear calendar days’ notice must be given for each general meeting (although we will provide whatever minimum number of days are required under federal securities laws). Shareholders may vote at meetings in person or by proxy.
The members of our board of directors serve for the term, if any, fixed by the resolutions of shareholders or resolutions of directors appointing him/her. If no term is fixed on the appointment of a director, the director serves indefinitely until his/her earlier death, resignation or removal. There is no cumulative voting with respect to the election of directors. After the closing of a business combination, the Company may by ordinary resolution appoint any person to be a director or may by ordinary resolution remove any director.
| 1 |
Pursuant to our fourth amended and restated memorandum and articles of association, if we do not consummate a business combination by 24 months from the closing of our IPO (assuming full extension), we will (i) as promptly as practicable cease all operations except for the purpose of making redemption and the subsequent winding up of the Company’s affairs; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under British Virgin Islands law to provide for claims of creditors and the requirements of other applicable law. Our initial shareholders have agreed to waive their rights to share in any distribution from the trust account with respect to their insider shares upon our winding up, liquidation and subsequent dissolution.
Our shareholders have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the ordinary shares, except that public shareholders have the right to have their public shares converted to cash equal to their pro rata share of the trust account if they vote on the proposed business combination and the business combination is completed.
Register of Members
Under the Companies Act, the ordinary shares are deemed to be issued when the name of the shareholder is entered in our register of members. Our register of members is maintained by our transfer agent, Continental Stock Transfer & Trust Company, which will enter the name of Cede & Co in our register of members for each of the respective public shareholders. If (a) information that is required to be entered in the register of members is omitted from the register or is inaccurately entered in the register, or (b) there is unreasonable delay in entering information in the register, a shareholder of the company, or any person who is aggrieved by the omission, inaccuracy or delay, may apply to the British Virgin Islands courts for an order that the register be rectified, and the court may either refuse the application or order the rectification of the register, and may direct the company to pay all costs of the application and any damages the applicant may have sustained.
Rights
Except in cases where we are not the surviving company in a business combination, each holder of a right will automatically receive one-tenth of an ordinary share upon consummation of our initial business combination, even if the holder of a public right converted all ordinary shares held by him, her or it in connection with the initial business combination or an amendment to our memorandum and articles of association with respect to our pre-business combination activities. In the event we will not be the surviving company upon completion of our initial business combination, each holder of ten rights will be required to affirmatively convert his, her or its rights in order to receive the one share underlying each right upon consummation of the business combination. No additional consideration will be required to be paid by a holder of rights in order to receive his, her or its additional ordinary shares upon consummation of an initial business combination. The shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of ours). If we enter into a definitive agreement for a business combination in which we will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the ordinary shares will receive in the transaction on an as-converted into ordinary shares basis.
We will not issue fractional shares in connection with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of British Virgin Islands Law. As a result, you must hold rights in multiples of ten in order to receive shares for all of your rights upon closing of a business combination. If we are unable to complete an initial business combination within the required time period and we liquidate the funds held in the trust account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from our assets held outside of the trust account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of an initial business combination. Additionally, in no event will we be required to net cash settle the rights. Accordingly, the rights may expire worthless.
| 2 |
Our Transfer Agent and Rights Agent
The transfer agent for our ordinary shares and rights agent for our rights is Continental Stock Transfer & Trust Company, 1 State Street 30th Floor, New York, NY 10004-1561.
Listing of our Securities
Our units, ordinary shares and rights are listed on the Nasdaq under the symbols “YHNAU,” “YHNA,” and “YHNAR,” respectively.
| 3 |
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Poon Man Ka, Christy, certify that:
| 1. | I have reviewed this annual report on Form 10-K of YHN Acquisition I Limited; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: March 31, 2026
| /s/ Poon Man Ka, Christy | |
| Poon Man Ka, Christy | |
| Director and Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Yangyujia An, certify that:
| 1. | I have reviewed this annual report on Form 10-K of YHN Acquisition I Limited; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: March 31, 2026
| /s/ Yangyujia An | |
| Yangyujia An | |
| Chief Financial Officer and Director | |
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of YHN Acquisition I Limited (the “Company”) on Form 10-K for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission (the “Report”), I, Poon Man Ka, Christy, Chief Executive Officer and director of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: March 31, 2026
| /s/ Poon Man Ka, Christy | |
| Poon Man Ka, Christy | |
| Director and Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of YHN Acquisition I Limited (the “Company”) on Form 10-K for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission (the “Report”), I, Yangyujia An, Chief Financial Officer and Director of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: March 31, 2026
| /s/ Yangyujia An | |
| Yangyujia An | |
| Chief Financial Officer and Director | |
| (Principal Financial and Accounting Officer) |