Isleworth (NASDAQ:ISLE) announced this afternoon that it has mutually terminated its combination agreement with biopharmaceutical company Cytovia.
Although the press release was short on details, it is likely the parties decided to terminate for the same reason a number of other SPACs recently have, which pertains to the headwinds in the SPAC market as well as general market volatility. The termination is effective immediately, but it’s worth noting that Isleworth stated that it is, “currently assessing whether it should extend its life”.
Isleworth originally brought about $207 million into the deal from its current trust, which it planned to supplement with $100 million in additional funding. As a part of this, Cytovia’s strategic partner Cellectis had agreed to invest $20 million convertible notes in the company, which were to come with a number of warrants equal to 35% of the number of shares Cellectis receives. The SPAC had a minimum cash closing condition of $50 million through a combination of its trust and the PIPE.
Isleworth had also arranged a $20 million PIPE investment to be available at the merger’s signing from new investors and had plans to line up $30 million more in PIPE investments and $30 million more convertible notes funding before close.
But, with a deadline of August 30, quickly approaching, the SPAC, as mentioned above, is still assessing whether it should extend its timeline and seek an alternative business combination. Isleworth raised $180 million at IPO on February 24, 2021 and initially aimed to combine with a revenue generating US healthcare company with direct-to-patient initiatives. The SPAC is led by Chairman Allen Weiss and CEO Robert Whitehead alongside CFO and EVP Dan Halvorson.
Both the SPAC and equity market conditions are creating an ongoing challenge for SPACs and IPOs alike, making Isleworth’s deal the 26th to terminate this year. The SPAC initially announced its $367 million combination with Cytovia earlier this year on April 27. The Aventura, Florida-based company is working to develop a range of therapies to treat liver cancer with modified natural killer cells.
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