Priveterra Acquisition Corporation (PMGM) Boosts AEON Biopharma Funding to $125M
by Nicholas Alan Clayton on 2023-06-30 at 9:40am

Priveterra (NASDAQ:PMGM) announced this morning what it has been cooking up through seven adjournments of its special meeting to complete its combination with  AEON Biopharma – up to $105 million in new funding through a mix of facilities.

Of this, $20 million is to follow the terms of the deal’s existing A-1 notes, joining $20 million in investments made by existing AEON investors at $7 per share. A new investor ACM ASOF VIII has also agreed to purchase 1,000,000 shares for $7 per share and will be further compensated with 75,000 newly issued shares.

Importantly, this $47 million in note financing alone should be enough to cover the transaction’s $45 million minimum cash condition. But, Priveterra nonetheless announced it would adjourn its special meeting an eighth time from 4 pm ET today to 4:30 pm ET July 3 to continue talk to shareholders.

This is something of an awkward meeting time late in the day sandwiched between a weekend and the Fourth of July holiday. Priveterra also has until August 11 to complete its deal, so SPACland would likely not be shocked at a ninth rain check next week.

Nonetheless, the bulk of the new financing announced today is to potentially come in the form of forward-purchase agreements with ACM ARRT and Polar Multi-Strategy Fund. These investors are to purchase up to 7,500,000 shares in an OTC prepaid equity arrangement.

These investors will be compensated for this on a per share basis at Priveterra’s redemption rate shortly after close. From then on, these investors may sell shares and terminate the agreements coverage of them. At such times they are to pay AEON the lower of $7 or 30-day VWAP per share.

The higher share price for the forward purchase agreements could counteract the possibility that the note investments at $7 could trigger Priveterra’s $9.20 Crescent Term. Such purchases would have to represent more than 60% of total equity proceeds and the SPAC’s stock would have to hit a pre-close 20-day VWAP under $9.20 in order for this to take effect.

Priveterra inked its $201.8 million business combination with drug developer AEON on December 13. Irvine, California-based AEON is working on an injection-based migraine treatment to compete with Botox for chronic and frequent sufferers.


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