YHN Acquisition I Ltd 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. References in this report (the “Quarterly 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. 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 unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Special Note Regarding Forward-Looking Statements This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Overview 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. 23 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. On April 3, 2025, we entered into that certain Business Combination Agreement with Mingde Technology Limited, a Cayman Islands company (“Mingde”), pursuant to which, (a) immediately prior to the Closing, we will merge with and into YHNA MS I Limited (“Purchaser”), our wholly-owned subsidiary, 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”), formed for the sole purpose of merging with and into Mingde (the “Acquisition Merger”) in which Mingde will be the surviving entity and a wholly owned subsidiary of Purchaser; and (c) following the Closing, Purchaser will be a publicly traded company listed on Nasdaq. On May 8, 2025, each of Purchaser, Merger Sub, the Company and Mingde 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, the Company and Mingde 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 Mingde shareholders as contingent post-closing earnout consideration. As a result, the aggregate consideration for the Acquisition Merger is $326,000,000 plus up to $70,000,000 worth of Earnout Consideration Shares. The Merger Consideration will be paid in the form of (1) 32,600,000 newly issued PubCo Ordinary Shares valued at $10.00 per share, which are comprised of (A) 30,970,000 PubCo Ordinary Shares as the Closing Payment Shares and (B) 1,630,000 PubCo Ordinary Shares to be issued to the Mingde shareholders at the Closing and held back as security for Mingde’s representations and warranties as further set forth in Article XI of the Business Combination Agreement as the Holdback Shares; and (2) an addition of up to 7,000,000 PubCo Ordinary Shares valued at $10.00 per share as contingent post-closing earnout consideration subject to the earnout mechanism. On December 8, 2025, in connection with the shareholders vote at the Annual Meeting, 3,464,179 shares were redeemed by certain shareholders at a price of approximately $10.58 per share, including interest generated and extension payments deposited in the Trust Account, in an aggregate amount of $36,650,157. 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 $150,000 into the Trust Account in order to extend the amount of available time to complete a business combination until June 19, 2026. 24 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard On April 17, 2026, we received a notification letter (the “Notification Letter on MVPHS”) from The Nasdaq Stock Market LLC (“Nasdaq”) that the Company is not in compliance with the minimum Market Value of Publicly Held Shares (the “MVPHS”) set forth in Nasdaq Listing Rule 5450(b)(2)(C) for continued listing on Nasdaq, which requires a minimum MVPHS of $15,000,000 (the “MVPHS Requirement”), since the Company failed to meet the MVPHS Requirement for a period of 30 consecutive business days from March 5, 2026 to April 16, 2026. The Notification Letter on MVPHS has no immediate effect on the listing or trading of the Company’s Ordinary Shares on Nasdaq and, as of April 20, 2026, the Ordinary Shares will continue to trade on Nasdaq under the symbol “YHNA.” The Notification Letter on MVPHS provides that pursuant to Nasdaq Listing Rule 5810(c)(3)(D), the Company has 180 calendar days, or until October 14, 2026, to regain compliance with Nasdaq Listing Rule 5450(b)(2)(C). To regain compliance, the minimum MVPHS must be at least $15,000,000 or more for a minimum of 10 consecutive business days prior to October 14, 2026. If the Company does not regain compliance by October 14, 2026, the Company will receive written notification from Nasdaq that its securities are subject to delisting. Alternatively, the Company may consider applying for a transfer to The Nasdaq Capital Market (the “Capital Market”). In order to transfer, the Company must submit an on-line transfer application, and meet the Capital Market’s continued listing requirements. Additionally, on April 17, 2026, the Company received a separate notification letter (the “Notification Letter on MVLS”) from Nasdaq, indicating that the Company was no longer in compliance with the minimum Market Value of Listed Securities (“MVLS”) of $50,000,000 required for continued listing on The Nasdaq Global Market, as set forth in Nasdaq Listing Rule 5450(b)(2)(A) (the “MVLS Requirement”) since the Company failed to meet the MVLS Requirement for a period of 30 consecutive business days from March 5, 2026 to April 16, 2026. The Notification Letter on MVLS has no immediate effect on the listing or trading of the Company’s Ordinary Shares on Nasdaq and, as of April 20, 2026, the Ordinary Shares will continue to trade on Nasdaq under the symbol “YHNA.” In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has a period of 180 calendar days, or until October 14, 2026, to regain compliance with the MVLS Requirement. To regain compliance, the Company’s MVLS must close at $50,000,000 or more for a minimum of 10 consecutive business days prior to October 14, 2026. If the Company does not regain compliance by October 14, 2026, the Company will receive written notification from Nasdaq that its securities are subject to delisting. Alternatively, the Company may consider applying for a transfer to the Capital Market. In order to transfer, the Company must submit an on-line transfer application, and meet the Capital Market’s continued listing requirements. The Company intends to monitor the MVPHS Requirement and MVLS Requirement of its Ordinary Shares and will consider implementing available options to regain compliance with the MVPHS Requirement and MVLS Requirement under the Nasdaq Listing Rules. 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 three months ended March 31, 2026, we had a net income of $95,567 which was comprised of formation and operating costs expenses, dividend income and interest income. For the three months ended March 31, 2025, we had a net income of $547,299 which was comprised of formation and operating costs expenses, dividend income and interest income. 25 Liquidity and Capital Resources As of March 31, 2026, we had cash of $22,788. 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 net with $60,300,000 transferred to the Trust Account on September 19, 2024. 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 provided that the Company has until 15 months from the closing of the IPO to complete its initial business combination. 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. 26 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 March 31, 2026. 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. 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. 27 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 shareholders’ equity. Accordingly, as of March 31, 2026 and December 31, 2025, 2,535,821 and 2,535,821 ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s unaudited condensed 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). As of March 31, 2026 and December 31, 2025, the ordinary shares subject to possible redemption reflected on the unaudited condensed consolidated balance sheets 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 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 Ordinary shares subject to possible redemption as of December 31, 2025 27,050,906 Plus: Subsequent remeasurement of ordinary shares subject to possible redemption - 2026 388,043 Ordinary shares subject to possible redemption as of March 31, 2026 $ 27,438,949 28 · 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. Net income (loss) per share is presented in the unaudited condensed consolidated statements of income as follows: For the Three Months ended March 31, 2026 For the Three Months ended March 31, 2025 Redeemable Ordinary Share Non-Redeemable Ordinary Share Redeemable Ordinary Share Non-Redeemable Ordinary Share Basic and diluted net income (loss) per share: Numerators: Interest income earned in investments held in Trust Account $ 238,045 $ – $ 639,717 $ – Total expenses (84,301 ) (58,177 ) (71,549 ) (20,869 ) Total allocation to redeemable and non-redeemable ordinary share $ 153,744 $ (58,177 ) $ 568,168 $ (20,869 ) Denominators: Weighted-average shares outstanding 2,535,821 1,750,000 6,000,000 1,750,000 Basic and diluted net income (loss) per share $ 0.06 $ (0.03 ) $ 0.09 $ (0.01 )