Rising Dragon Acquisition Corp. (NASDAQ:RDAC) has announced the mutual termination of its proposed merger with HZJL Cayman Limited, ending a business combination agreement originally signed in January 2025. The decision, effective October 30, 2026, was approved by the boards of directors of both companies.
The special purpose acquisition company (SPAC) confirmed that neither party will be required to pay a termination fee under the agreement. The parties have also agreed to release each other from claims relating to the proposed transaction, subject to certain exceptions.
Despite the cancellation, Rising Dragon intends to continue searching for an alternative acquisition target as it seeks to complete an initial business combination within the timeframe permitted under its governing documents.
Why Was the Rising Dragon and HZJL Merger Cancelled?
Rising Dragon and HZJL Cayman mutually agreed to terminate their proposed merger, bringing an end to a transaction that had been under consideration since January 27, 2025.
The companies formalised the decision through a termination agreement dated October 30, 2026.
Both boards of directors approved the termination.
The announcement did not disclose a specific reason for cancelling the transaction or identify any disagreements between the parties.
It also did not indicate whether regulatory considerations, financing arrangements or other transaction-related factors influenced the decision.
The termination means the previously proposed business combination will not proceed under the existing merger agreement.
What Were the Terms of the Original Merger Agreement?
The original Agreement and Plan of Merger was signed on January 27, 2025.
The agreement involved Rising Dragon Acquisition Corp., HZJL Cayman Limited and several additional parties.
These included Xpand Boom Technology Inc., Xpand Boom Solutions Inc., XB B Limited and Bin Xiong.
The transaction was structured as a proposed business combination involving Rising Dragon, a publicly traded special purpose acquisition company.
SPACs are established to raise capital through an initial public offering and subsequently complete a merger or similar transaction with an operating business.
The original agreement was intended to provide Rising Dragon with a route towards completing its initial business combination.
However, the companies have now agreed to discontinue the transaction.
The latest announcement did not provide details about the proposed merger’s valuation or the financial terms that would have applied had the transaction been completed.
Will Rising Dragon or HZJL Pay a Merger Termination Fee?
Neither Rising Dragon nor HZJL Cayman is required to pay a termination fee following the cancellation of the merger agreement.
The termination agreement expressly provides that no party is obligated to make such a payment to another party.
This arrangement allows the companies to end the proposed transaction without the termination penalties that can accompany some merger agreements.
The parties also agreed to mutually release each other from claims connected with the original agreement and the transactions contemplated under it.
However, those releases remain subject to certain exceptions.
The announcement did not specify the full scope of those exceptions.
Further information about the termination terms is expected to be included in Rising Dragon’s regulatory filing with the US Securities and Exchange Commission.
What Does the Mutual Release of Claims Mean?
The mutual release provision is an important component of the termination agreement.
Under the arrangement, the parties have agreed to release one another from claims arising from the original merger agreement and the proposed business combination, subject to specified exceptions.
Such provisions are designed to establish the legal position of the parties following the cancellation of a transaction.
In this case, the agreement provides a framework for ending the proposed merger without a termination fee.
However, the existence of exceptions means the release should not be interpreted as eliminating every possible obligation or claim.
The announcement did not disclose the detailed wording of the release provisions.
Investors seeking further information will be able to review the company’s forthcoming Form 8-K filing.
Will Rising Dragon Continue Searching for Another Merger Target?
Rising Dragon confirmed that it intends to continue pursuing an initial business combination with an appropriate target company.
The termination of the HZJL transaction therefore does not represent an announced abandonment of its broader acquisition strategy.
Instead, Rising Dragon plans to seek another potential business combination within the period allowed under its amended and restated memorandum and articles of association.
As a SPAC, Rising Dragon was established specifically to identify and complete a merger, acquisition or similar transaction.
The company may pursue opportunities involving a merger, share exchange, asset acquisition, share purchase, reorganisation or another qualifying business combination.
However, Rising Dragon has not identified a replacement target in the latest announcement.
It also has not provided a timetable for announcing or completing another transaction.
How Much Time Does Rising Dragon Have to Complete a Business Combination?
Rising Dragon said it will continue seeking an acquisition target within the timeframe permitted by its governing documents.
The company did not specify the exact remaining period available to complete a business combination in the announcement.
Its amended and restated memorandum and articles of association establish the applicable deadline and related requirements.
For investors, the remaining time available to identify a target, negotiate terms and complete a transaction will be an important consideration.
The cancellation of the HZJL merger means Rising Dragon must now pursue another opportunity if it is to complete an initial business combination.
The company has not announced whether it intends to seek an extension of its permitted transaction period.
Any future developments concerning its acquisition timetable would need to be assessed against the company’s governing documents and subsequent disclosures.
What Information Will Rising Dragon Disclose to the SEC?
Rising Dragon intends to provide additional details about the merger termination in a Current Report on Form 8-K.
The filing will be submitted to the US Securities and Exchange Commission.
Form 8-K is used by publicly traded companies to disclose certain significant corporate events.
In this case, the filing is expected to provide further information about the termination of the original merger agreement.
The company’s announcement did not specify when the filing would become available.
Investors will be able to review the regulatory disclosure for additional details concerning the agreement and any related obligations.
What Does the Termination Mean for Rising Dragon Shareholders?
The cancellation of the proposed merger represents a change in Rising Dragon’s anticipated route towards completing its initial business combination.
The company will no longer proceed with the HZJL transaction under the agreement signed in January 2025.
Instead, it intends to identify another suitable business combination opportunity.
The absence of a termination fee means the cancellation does not create a contractual termination payment obligation between the parties.
However, Rising Dragon has not disclosed the financial impact of the terminated transaction or any expenses associated with its previous merger preparations.
The announcement also does not provide updated information about shareholder redemptions, trust account balances or potential changes to the company’s capital structure.
For shareholders, the principal development is that Rising Dragon must now pursue a different acquisition target.
Its ability to complete a transaction within the permitted timeframe will remain a central consideration.
Could Rising Dragon Announce Another Acquisition?
Rising Dragon has indicated that it intends to continue searching for an appropriate business combination target.
That leaves open the possibility of a new merger or acquisition announcement.
However, the company has not disclosed any ongoing negotiations or identified potential counterparties.
The termination of the HZJL agreement does not establish that another transaction is imminent.
Any future business combination would depend on Rising Dragon identifying a suitable target, agreeing commercial terms and satisfying applicable transaction requirements.
The company has also not provided guidance on the size, sector or geographic location of a potential replacement target.
Further announcements will be needed to establish the direction of its next proposed transaction.
Outlook: What Should Investors Watch Next?
Rising Dragon Acquisition Corp.’s decision to terminate its merger agreement with HZJL Cayman Limited ends a proposed business combination that was originally announced through an agreement dated January 27, 2025.
The termination became effective on October 30, 2026, following approval from both companies’ boards.
Neither party is required to pay a termination fee, and the parties have agreed to mutual releases of claims, subject to certain exceptions.
Rising Dragon intends to continue pursuing an initial business combination with another suitable target.
Investors will now be monitoring the company’s search for an alternative transaction, the remaining period available under its governing documents and any further regulatory disclosures.
The forthcoming Form 8-K filing may provide additional clarity about the termination arrangements.
The next significant development will likely involve either the identification of a new business combination opportunity or an update concerning Rising Dragon’s transaction timetable.
More About Rising Dragon Acquisition Corp.
Rising Dragon Acquisition Corp. is a special purpose acquisition company incorporated in the Cayman Islands as an exempted company.
The company was established to pursue a merger, share exchange, asset acquisition, share purchase, reorganisation or similar business combination with one or more businesses.
Rising Dragon completed its initial public offering pursuant to a prospectus dated October 10, 2024.
Unlike an established operating company, a SPAC is primarily focused on identifying and completing an acquisition or business combination.
Rising Dragon previously entered into a merger agreement involving HZJL Cayman Limited and related parties in January 2025.
Following the mutual termination of that agreement in October 2026, the company intends to continue seeking an appropriate target for its initial business combination.