SPACInsider Logo
Aesther Healthcare (AEHA) Secures $60M Backstop for Ocean Biomedical Deal
by Marlena Haddad on 2023-02-10 at 4:08pm

Aesther Healthcare Acquisition Corp. (NASDAQ:AEHA) announced this afternoon that it has entered into an amended $60 million OTC equity prepaid forward transaction with Vellar Opportunity Fund.

The backstop agreement comes a week after Aesther shareholders approved its combination with biotech firm Ocean Biomedical at a special meeting held on February 3, but the parties have not yet closed the deal. As a refresher, the SPAC already secured a $40 million backstop with Meteora Capital Partners back in October and another $40 million from Vellar at its deal announcement.

Pursuant to today’s agreement, Vellar has agreed to support the transaction by purchasing up to 6,000,000 shares of Aesther Class A common stock for up to $60 million, including from other stockholders that chose to redeem and subsequently revoked their elections. The SPAC has agreed to purchase those shares from Vellar on a forward basis and the purchase price will include a prepayment in the amount of the redemption price per share.

The backstop agreement matures on the earlier to occur of 3 years after the deal closes or the date specified by Vellar in a written notice delivered if the VWAP during 30 out of 45 consecutive trading days is less than $4 per share.

In addition, Vellar will receive $12,408,000 from the trust, which will be used to purchase share consideration shares that otherwise would have been redeemed. These shares, however, are not subject to the backstop agreement. Aesther has the option to repurchase the share consideration shares from Vellar for $3 million at any time during the first six months after the prepayment date.

If the VWAP price of AEHA is equal to or above $20.00 per share for any 30 trading days during a 45 consecutive trading day-period and the aggregate trading volume in respect of such shares during the same 20-day period is at least the product of  three and the difference of the number of shares and the terminated shares, then Aesther can notify Vellar to cause the maturity date to occur.

Additionally, the backstop agreement calls for the adjustment of the reset price on the first scheduled trading day of each month starting on the first calendar month following the closing of the deal to be the lowest of the then-current reset price, the initial price and the VWAP price of the shares of the last ten trading days of the prior calendar month, but not lower than $10.34.

The reset price may be reduced further in connection with a dilutive offering undertaken by Aesther. This would entitle Aesther to terminate the backstop agreement early and require Vellar to pay an amount equal to the product of the number of shares Aesther elects to terminate from the transaction and the reset price as of the termination date.

At maturity, any remaining shares will be purchased by Aesther at maturity for an additional $2.50 per share. During the term of the agreement, Vellar may sell the shares subject to the agreement after which those shares will no longer be subject to the agreement. In this case, Vellar will repay the SPAC with a portion of the sale proceeds.

If the backstop agreement is terminated after the business combination fails to close, then Aesther will be obligated to pay Vellar a fee of $1 million along with certain fees and expenses.

Aesther Healthcare announced its $345 million combination with Ocean Biomedical on August 31, 2022. Providence, Rhode Island-based Ocean Biomedical is developing treatments for malaria and different cancer types.

Recent Posts
by Kristi Marvin on 2023-03-18 at 12:34pm

Terms Tracker for the Week Ending March 17, 2023 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. Despite this week’s headlines about bank failures, EF Hutton managed to file both a new S-1 registration statement and price an IPO.  They should have...

by Nicholas Alan Clayton on 2023-03-17 at 5:53pm

Latest SPAC Liquidations: Northern Genesis III, MSD, and Tech and Energy Transition Corp. Northern Genesis Acquisition Corp. III (NGC) to Liquidate on March 24 Northern Genesis III (NYSE:NGC) announced that it will redeem all outstanding shares effective as of the close of business on March 27. Shares will cease trading on March 24 and the per-share...

by Marlena Haddad on 2023-03-17 at 5:52pm

Tech and Energy Transition Corp. (NASDAQ: TETC) announced this afternoon that its shareholders have voted against a proposal to extend the SPAC’s timeline to complete a business combination. Holders of 38,069,946 shares of TETC’s common stock, comprised of 28,495,396 shares of Class A common stock, and 9,575,000 shares of Class B common stock, were present at...

by Marlena Haddad on 2023-03-17 at 12:02pm

Direct Selling Acquisition Corp. (NYSE: DSAQ) announced this morning that it intends to adjourn its extension vote, originally scheduled to be held on March 22, and will reconvene on March 24 at 11:00 a.m. The SPAC has also extended the redemption deadline to March 22 at 5:00 p.m. It is currently facing a completion deadline of March...

by Marlena Haddad on 2023-03-17 at 11:35am

Below is a daily summary of links to the latest SPAC news and rumors gathered across the web.  Latest SPAC News:  Saudi Arabia explores setting up framework for SPAC listings, and Boxed considers filing for bankruptcy  Saudi Arabia Explores Setting Up Framework for SPAC Listings Saudi Arabia’s market regulator is looking into setting up a...

Privacy Policy|Terms Of Use
Copyright © 2023 SPACInsider, Inc. All Rights Reserved