digital health Acquisition in an 8-K said it entered into a securities purchase agreement with an institutional investor, which was issued a 16.67% original issue discount promissory note for $300,000. The note bears guaranteed interest at 10% annually, due and payable May 5, 2024. If the SPAC's pipe financing closes in connection with its business combination, 110% of all unpaid principal under the note and guaranteed interest are due at the PIPE closing.
The SPAC's merger pratners VSee Lab and iDoc Virtual Telehealth Solutions guaranteed the obligations under the securities purchase agreement. The obligations are subordinated to obligations to its existing bridge lender.
Digital Health also issued to the securities buyer warrants with an exercise period of five years to purchase up to 26,086 shares at $11.50 each and 7,000 shares as commitment shares.
The SPAC further issued a promissory note to SCS Capital Partners for $200,000. The SCS note bears 10% annual interest and is due and payable May 5, 2024. If the company's PIPE financing closes in connection with the closing of its business combination, 100% of all unpaid principal under the promissory note and any accrued but unpaid interest are due and payable at the closing of the PIPE financing.
Digital Health's proposed merger with VSee Lab, a telehealth software company, and iDoc Telehealth, a neurocritical care and intensive care telehealth provider, had been expected to close in the third quarter of 2022, resulting in a valuation of approximately $110 million for the combined entity.
The SPAC last month disclosed $5 million in additional backstop commitments to support the deal. Read more.