Recent reports indicate that San Zhi Yang has reportedly gained a listing on the Nasdaq through a backdoor merger with U.S.-listed company Rich Sparkle Holdings Limited.

Public records show that in January 2026, Rich Sparkle announced the completion of its acquisition of Step Distinctive. The target company operates e-commerce live-streaming sales and is 49% owned by TikTok sensation Khaby Lame, with Anhui Xiao Hei Yang Network Technology Co., Ltd. holding a 13% stake.

Anhui Xiao Hei Yang Network Technology Co., Ltd. is wholly owned by Hefei Leading Sheep Culture Media Co., Ltd., which in turn is owned 51% by Zhang Qingyang (Crazy Brother Yang) and 49% by Zhang Kaiyang (Crazy Big Brother Yang), the founders of San Zhi Yang.

"This is not a backdoor listing for San Zhi Yang, but rather a backdoor listing for Khaby Lame, with San Zhi Yang expanding overseas through this shell," explained Ma Xiaochen, a lawyer from Yinghe Law Firm (Guangzhou), in an interview. "Amid multiple challenges for San Zhi Yang's domestic live-streaming business—including penalties for false advertising, suspended Douyin accounts for rectification, and the loss of key hosts—the company has entered this transaction to collaborate with global top influencer Khaby Lame. Using a 36-month exclusive global operating right as consideration, San Zhi Yang is leveraging Rich Sparkle Holdings Limited's Nasdaq listing to achieve an 'overseas expansion via a backdoor'."

Public information indicates that Khaby Lame gained fame by posting silent reaction videos and has over 160 million followers on TikTok, making him the platform's most-followed creator. Notably, following the transaction, the company's stock price surged more than 650% within a week, then plummeted 77% the following week.

Ma further pointed out that after a company lists or undergoes a major transaction, specific shareholders—such as founders, early investors, and insiders—are typically subject to a lock-up period, usually lasting 6 to 12 months, preventing them from selling shares. This is designed to avoid a sharp stock price decline from mass sell-offs immediately after listing, thereby protecting public investors. In the ANPA acquisition of Step Distinctive, the shares held by Khaby Lame, San Zhi Yang, and original ANPA shareholders are likely subject to lock-up restrictions. Specific terms—such as duration and phased release ratios—have not been publicly disclosed. Any shareholder wishing to monetize their holdings would need to wait until the lock-up period expires.

**Not a "Backdoor Listing"**

The transaction was disclosed with a valuation of approximately $975 million. Post-transaction, the company will continue to be led by Khaby Lame. With the acquisition completed, Anhui Xiao Hei Yang has officially become a strategic shareholder and core operating partner.

"This cooperation is based on a tripartite dynamic: Khaby Lame brings the IP, San Zhi Yang provides operational capabilities, and Rich Sparkle/ANPA supplies the listing platform," analyzed Ma. "Prior to the transaction, ANPA had approximately 11.3 million total shares outstanding. It issued an additional 75 million shares to acquire Step Distinctive, valuing Step Distinctive at $975 million, which implies an ANPA share price of $13 per share. In this transaction, neither Khaby Lame nor San Zhi Yang received cash; instead, they received ANPA shares."

Concurrently, ANPA conducted a private placement of 3 million shares, raising $39 million. Post-transaction, ANPA's total shares outstanding are approximately 89 million. The $39 million raised from the private placement is likely intended to cover integration costs, serve as working capital for ANPA after the transaction, and help meet Nasdaq listing requirements.

Ma further explained that, based on the ownership percentages of Khaby Lame and San Zhi Yang in Step Distinctive, post-transaction, Khaby Lame holds approximately 36.75 million ANPA shares, representing about 41% of the company, while San Zhi Yang holds approximately 9.75 million shares, representing about 11%.

As part of the deal, Anhui Xiao Hei Yang secured a 36-month exclusive global operating right for Khaby Lame, encompassing live-streaming and short-video e-commerce planning, TikTok shop operations, cross-border supply chain coordination, after-sales service, and AI digital human commercial development. The company has set an ambitious target: achieving $4 billion in annual revenue by an unspecified date.

"It is reported that Khaby Lame has authorized the digitalization of his facial features, voice, behavior patterns, gestures, and expressions. Subsequently, there will be no need for him to personally appear in shoots; 24/7 live-streaming can be achieved using an AI digital replica, which can also generate multi-language versions. The transaction counterparties valued San Zhi Yang's experience in live-streaming e-commerce operations, Chinese supply chain resources, TikTok Shop operational teams, and AI digital human technology development capabilities," Ma noted. "However, if San Zhi Yang's contribution to the post-transaction company is primarily operational, it may bear the risk of failing to meet operational targets. If performance falls short of expectations, it could lose the possibility of future cooperation."

**Potential Impact of Penalty Record**

On another front, "Crazy Brother Yang" and his primary enterprise "San Zhi Yang" previously faced public scrutiny and penalties concerning false advertising for products like "Hong Kong Mei Cheng Mooncakes" and "Australian Grain-Fed Beef Rolls." The Hefei Municipal Market Supervision Administration issued a notice stating that San Zhi Yang was fined and required to disgorge illegal gains totaling approximately 68.9491 million yuan. It was also ordered to suspend operations for rectification and assume relevant legal responsibilities.

"Following this transaction, San Zhi Yang has separated its domestic live-streaming business from its overseas operations structurally," Ma pointed out regarding this matter. "In terms of equity, San Zhi Yang holds only an 11% stake in ANPA. ANPA is not a China-registered company, and its flagship IP, Khaby Lame, is a foreign national. This creates a degree of physical separation from the domestic penalty record. However, this isolation cannot completely eliminate the impact."

He further analyzed, "Under U.S. Securities and Exchange Commission disclosure rules, the backgrounds of major shareholders and records of regulatory penalties are within the scope of required disclosures. The significant fine imposed on San Zhi Yang, the suspension of its Douyin accounts for rectification, and the mass termination of hosts are all material information. Simultaneously, the 36-month exclusive operating agreement constitutes a major contract. If domestic penalties affect San Zhi Yang's ability to fulfill this contract, that also needs to be disclosed."

In September 2024, the Douyin E-commerce Security Center announced that, to promote a healthy community atmosphere and protect consumer rights and shopping experiences, the platform had penalized "San Zhi Yang" in accordance with relevant laws and regulations and the "Douyin E-commerce Creator Management General Rules." Starting September 21, the platform suspended the broadcasting of accounts under "San Zhi Yang," stating it would further urge the company to actively rectify and properly handle after-sales compensation for affected consumers.

However, in March 2025, the Hefei Municipal Market Supervision Administration issued another notice stating that San Zhi Yang Company had paid the fine and disgorgement of 68.9495 million yuan and had compensated consumers a cumulative 27.7785 million yuan. Upon application by San Zhi Yang, a joint municipal investigation team organized relevant authorities, lawyers, and consumer representatives for a comprehensive assessment, concluding that the company's rectification met requirements and it was qualified to resume operations.

Since September 2025, San Zhi Yang hosts such as Zui Ge, Lao K's K, and Qiao Mei have gradually resumed broadcasting on Douyin. San Zhi Yang's self-operated product account, Xiao Yang's Selections, also began broadcasting on Douyin in November 2025.

More critically, San Zhi Yang's operational capabilities are deeply tied to ANPA's $4 billion revenue target. Ma cautioned, "The current structure only achieves legal and formal separation; in substance, it still relies on domestic supply chains and the core team. Could the domestic penalties lead to a substantive decline in its performance capability? Can the overseas business truly operate independently and sustain itself? Is there a risk that San Zhi Yang's key personnel could again become involved in negative publicity or incidents? These factors could all have a substantive impact on ANPA's global business."