Shares in Redwoods Acquisition soared 72% this morning after the SPAC disclosed shareholders approved its merger with Anew Medical.
The target is an early-stage biotechnology company focused on developing disruptive new therapies to treat neurodegenerative diseases. Omaha, NE-based ANEW currently lists on the OTC Markets under the symbol LEAS.
Terms at deal announcement originally called for ANEW to receive up to $60 million in stock, although that was before redemptions of 53% in a December extension vote and another 1.7 million shares redeemed ahead of the merger vote. The parties also indicated they were trying to secure PIPE financing.
There is no minimum cash condition to close.
According to the prospectus on the deal, assuming no Redwood shares were redeemed ahead of the merger vote, and no additional funding was obtained, the combined company was expected to have cash of $10.4 million and working capital of $7.7 million on its balance sheet after deducting transaction expenses after closing.
Another $50 million in earnout shares would be issued if the company’s stock hits certain price milestones.
The transaction at deal announcement last May was expected to provide approximately $54 million of cash proceeds, which assumed no redemptions by Redwoods stockholders.
After closing ANEW MEDICAL expects to list on the Nasdaq.
