Shares of Rising Dragon Acquisition Corp. (RDAC) experienced a dramatic surge on Wednesday, climbing more than 400% to $21.72, following the company's announcement that it is seeking additional time to complete its merger with HZJL Cayman Limited. The special purpose acquisition company (SPAC) has called a special shareholder meeting for May 28 to vote on extending the business combination deadline by up to 15 months, from the current July 15, 2026, to October 15, 2027.
The stock's explosive move came on heavy trading volume of approximately 12.1 million shares, with prices ranging from $5.64 to $23.51 during the session. This surge is directly tied to the extension proposal rather than any closure of the HZJL transaction, which remains pending.
Extension Details and Shareholder Vote
In a preliminary proxy filing released after the market close on Tuesday, Rising Dragon outlined its plan to push back the merger deadline through up to 15 separate one-month extensions. The company had already extended its completion window to May 15, 2026, by making monthly deposits. The board has unanimously recommended that shareholders approve the extension, with Chairman and CEO Lulu Xing urging investors to support all proposals.
The shareholder meeting is scheduled for 10:00 a.m. Eastern on May 28, to be held at Loeb & Loeb LLP's New York office and virtually. Key agenda items include a charter amendment, changes to the trust agreement, and a potential adjournment proposal if necessary.
Financial Mechanics of the Extension
A critical detail in the proxy is the funding mechanism for each one-month extension. The sponsor or its affiliates will deposit into the trust account either $100,000 or $0.033 per outstanding public share, whichever is lower. These deposits are structured as no-interest loans, repayable if the merger closes and typically written off if it does not.
Rising Dragon had previously secured shareholder approval for the HZJL business combination at a November 20, 2025, meeting. However, 5,715,609 ordinary shares were submitted for redemption following that vote, reducing available cash and impacting the float for the deal.
Background on HZJL Merger
HZJL Cayman Limited, according to the initial deal announcement, provides branding, software solutions, and supply-chain support for local lifestyle businesses such as restaurants, coffee chains, and beauty salons. Under the January 2025 merger terms, HZJL's shareholders and management are set to receive 35 million ordinary shares in Xpand Boom Technology, with the potential for an additional 20 million earn-out shares if revenue targets are met.
Rising Dragon CEO Lulu Xing expressed enthusiasm about partnering with HZJL's leadership, while HZJL founder Xiong Bin described the company's focus as a "Scalable Growth-Engine Empowering Local Business."
Financial Position and Risks
Rising Dragon raised $50 million through its October 2024 initial public offering, selling 5 million units at $10 each. Including the over-allotment and a private placement, total funds placed in trust for public shareholders reached $57.8 million, according to the company's annual report.
Despite the recent surge, the company faces significant hurdles. In its filing, Rising Dragon warned that there are no guarantees the extension vote will secure the HZJL deal, that the sponsor will continue funding the trust, or that redemptions won't deplete the cash needed to close on viable terms. Failure to complete a transaction by the required deadline could lead to liquidation and public share redemption.
The May 28 vote represents a critical near-term catalyst. Beyond that, market attention will focus on whether Rising Dragon can finalize the HZJL merger amid redemption pressures, regulatory approvals, and potential liquidity constraints.
