Executive Summary / Key Takeaways

• YHN Acquisition I Limited (YHNA) is a British Virgin Islands-incorporated SPAC focused on completing a business combination.
• The company has entered into a definitive Business Combination Agreement to merge with Mingde Technology Limited, valuing the target at $396 million.
• Mingde's operating subsidiary, XJR, is involved in online sports platforms and providing technological solutions for health product stores, representing the core business focus post-merger.
• YHNA holds approximately $61.73 million in its trust account as of March 31, 2025, intended primarily for the merger, alongside cash outside the trust ($537,012).
• A critical deadline looms: YHNA must consummate a business combination by December 18, 2025, or face liquidation, which raises substantial doubt about its ability to continue as a going concern.

The Blank Check Mandate and a Pivotal Target

YHN Acquisition I Limited (YHNA) was established on December 18, 2023, as a blank check company, or SPAC, with the explicit objective of identifying and merging with an operating business. Incorporated in the British Virgin Islands, its initial phase was dedicated solely to formation and preparing for its public debut. As an early-stage entity, YHNA generates no operating revenue, relying instead on investment income from its held funds while it seeks a suitable merger partner.

The company successfully completed its Initial Public Offering (IPO) on September 19, 2024, raising $60.00 million by selling 6.00 million units at $10.00 each. Concurrently, a private placement added another $2.50 million from the Sponsor. A significant portion of these proceeds, $60.30 million initially, was placed into a trust account for the benefit of public shareholders, a standard feature of the SPAC structure designed to provide a redemption option if a merger is not completed.

Following the IPO, YHNA's strategic focus narrowed to evaluating potential business combination candidates. This search culminated in a significant development on January 15, 2025, with the signing of a binding letter of intent, followed by a definitive Business Combination Agreement on April 3, 2025, with Mingde Technology Limited. This agreement outlines a transaction valuing Mingde at $396 million. Mingde's operating subsidiary, Zhejiang Xiaojianren Internet Technology Co., Ltd (XJR), is described as operating online sports platforms and providing technological solutions for health product stores. This proposed merger represents the core investment thesis for YHNA shareholders – the opportunity to gain exposure to Mingde's business operations through the SPAC structure.

Current Operations and Financial Snapshot

As a SPAC pre-merger, YHNA's "operations" are fundamentally limited to managing its cash reserves, seeking and negotiating a business combination, and fulfilling public company compliance requirements. The financial performance reflects this state. For the three months ended March 31, 2025, YHNA reported a net income of $547,299. This income was not derived from traditional business activities but primarily from $639,717 in dividend and interest income earned on the funds held in the trust account. This non-operating income more than offset the formation and operating costs of $92,418 incurred during the period, which include expenses related to being a public company and the ongoing merger pursuit. This contrasts with the prior year period (Q1 2024) when the company reported a net loss of $25,346 with minimal income, reflecting its earlier stage before the IPO and significant trust account balance.

As of March 31, 2025, YHNA held $537,012 in cash outside the trust account, intended for working capital purposes such as due diligence, travel, and transaction costs. The substantial majority of its assets, $61.73 million, were held in the trust account, invested primarily in U.S. Treasury securities. This trust value represents the potential redemption amount for public shareholders if the merger is not completed. The company's current liabilities totaled $129,059, including accrued expenses and an amount due to the sponsor. A significant deferred underwriting commission of $1.50 million is payable upon the closing of a business combination.

Technological Landscape (Target's Business)

The investment narrative for YHNA is intrinsically linked to the business and technology of its proposed target, Mingde Technology Limited, specifically its operating subsidiary, XJR. Based on available information, XJR operates online sports platforms and provides technological solutions for health product stores. While the nature of XJR's business is stated, specific details regarding the core differentiated technology employed by XJR, its tangible or quantifiable benefits over alternatives, specific performance metrics, or details on R&D initiatives and their stated goals or target metrics are not provided.

Therefore, while the strategic intent is clearly to merge with a company operating in the digital sports and health technology sectors, the specific technological advantages, competitive moats derived from technology, or the impact of technological innovation on future financial performance cannot be detailed based on the available information. Investors must understand that the value proposition post-merger will depend heavily on the operational execution and technological capabilities of Mingde/XJR within these markets, details of which are not elaborated in public filings.

Competitive Environment

YHNA operates within the highly competitive landscape of Special Purpose Acquisition Companies. Its direct competitors are other SPACs seeking to acquire private companies, vying for both attractive targets and investor capital. This competition is multifaceted, involving factors such as the sponsor's reputation and network, the size of the trust account, the SPAC's structure and timeline, and its ability to identify and successfully negotiate a deal.

Based on general market dynamics and competitive analysis, YHNA competes with a range of SPACs, including notable examples like Digital World Acquisition Corp. (DWAC), Altimeter Growth Corp. (AGC), and Pershing Square Tontine Holdings Ltd. (PSTH). These competitors, particularly larger or more established ones, may have advantages in terms of market visibility, access to a broader pool of potential targets, or a proven track record of completing mergers. For instance, the competitive analysis suggests that while YHNA's Hong Kong base might offer regional advantages, it currently lags behind some peers in terms of financial metrics like Free Cash Flow yield and Enterprise Value multiples, and potentially in deal execution speed or market share capture.

Indirect competition comes from traditional IPOs, private equity firms, and venture capital funds, all of which offer alternative avenues for private companies to raise capital or achieve liquidity. These alternatives can sometimes offer faster or less complex paths to market compared to a SPAC merger, potentially reducing the pool of available targets or impacting deal terms.

YHNA's strategic positioning appears to leverage its base and network to identify opportunities, such as the proposed merger with Mingde/XJR, which may have specific regional relevance or strategic fit. However, without a completed transaction, its competitive standing remains largely theoretical, based on its ability to execute the proposed merger successfully and on the future performance of the acquired business relative to its peers in the online sports and health tech sectors.

Outlook and Critical Deadline

The immediate outlook for YHNA is entirely centered on the successful consummation of the business combination with Mingde Technology Limited. The definitive agreement is in place, outlining the structure and valuation of the transaction. The company's resources, primarily the funds in the trust account, are earmarked for this purpose.

However, a critical, hard deadline dictates YHNA's future. The company must complete a business combination by December 18, 2025. This date marks 15 months from the closing of its IPO. Failure to meet this deadline will trigger an automatic winding up and liquidation process. In such an event, the company would redeem 100% of its outstanding public shares at a price reflecting a pro rata portion of the funds in the trust account (including interest earned, net of taxes). Following this redemption, the company would dissolve.

Management explicitly states that if the business combination is not consummated within this prescribed period, the requirement to cease operations, redeem shares, and liquidate raises substantial doubt about the company's ability to continue as a going concern. This is the single most significant factor influencing YHNA's outlook.

Beyond the merger itself, the company anticipates increased expenses as it continues to operate as a public entity and incurs significant transaction costs related to the proposed business combination. While no specific financial guidance figures for the post-merger entity are available in public filings, the strategic objective is clear: transition from a non-operating blank check company to an operating entity focused on the online sports platforms and health tech solutions market via the Mingde acquisition.

Risks and Challenges

The path forward for YHNA is fraught with significant risks, predominantly tied to its nature as a SPAC and the proposed business combination. The most paramount risk is the potential failure to complete the merger with Mingde by the December 18, 2025 deadline. If the transaction is not consummated, the company will be forced to liquidate, resulting in the redemption of public shares and the expiration of rights, which would become worthless. The per-share distribution upon liquidation could potentially be less than the initial $10.05 per share placed in trust, depending on expenses and claims.

Another risk involves potential claims from vendors or prospective target businesses against the funds held in the trust account. While the Sponsor has agreed to be liable for such claims that reduce the trust below $10.05 per share (with certain exceptions), and the company endeavors to obtain waivers, there is no guarantee these measures will fully protect the trust assets.

Furthermore, the Inflation Reduction Act of 2022 introduced a 1% excise tax on certain stock repurchases by publicly traded domestic corporations. While YHNA is a British Virgin Islands company, the structure of the reincorporation and merger could potentially subject redemptions (either in connection with the merger vote or liquidation) to this tax, which would reduce the cash available to the company or for distribution to shareholders.

Finally, as an early-stage and emerging growth company, YHNA is subject to the inherent risks associated with such entities, including the challenges of successfully integrating an acquired business and operating effectively in a new market, assuming the merger closes.

Conclusion

YHN Acquisition I Limited stands at a critical juncture, with its future inextricably linked to the successful completion of its proposed business combination with Mingde Technology Limited. The company has progressed from its IPO to identifying a target and signing a definitive merger agreement, aiming to transition into an operating entity focused on online sports platforms and health technology solutions.

However, the clock is ticking towards the December 18, 2025 deadline. The ability to close the $396 million merger by this date is paramount, as failure would trigger liquidation and raise substantial doubt about YHNA's viability as a going concern. While the company holds significant funds in trust for the transaction, the competitive SPAC landscape, potential claims against trust assets, and the looming excise tax on redemptions add layers of complexity. Investors in YHNA are fundamentally betting on the successful execution of this specific merger within the tight timeframe, a high-stakes proposition where the outcome hinges on navigating the final steps towards combination.