Happy Sunday, Friends!
The last week of SPAC trading was packed with deals, updates, and lawsuits. Two new companies are debuting through SPAC deals including a direct-to-smartphone operator, and a biorefinery-focused firm. Also, a SPAC is converting to a non-SPAC shell after failing to find a deal, and a high-profile banker gets sued by his SPAC partner after it failed to pay deal fees. Read on to find out the latest about all things SPACs.
SPAC Deals Announced
Direct-to-Smartphone operator Lynk Global is merging with SPAC Slam Corp, led by former professional baseball player Alex Rodriguez, in a deal that values the firm at $800 million.
Lynk aims to fund a low Earth orbit constellation to expand mobile networks beyond cell towers. Since launching its first test satellite in 2019, Lynk has deployed three satellites, enabling intermittent texting and low-bandwidth services to phones in over seven countries. Of these, the company has announced partnerships in the Solomon Islands, Cook Islands, and Palau have been disclosed.
Lynk has not yet generated revenue yet but anticipates making $100,000 in the first quarter of 2025 with 38 satellites, followed by a significant increase to $10 million in the next quarter. By the end of 2025, Lynk projects $41 million in revenue with 74 satellites, aiming to offer seamless messaging services to over 100 million subscribers.
The deal has a minimum cash condition of $110 million, including the cash held in the SPAC trust and a private share sale.
If the SPAC can't meet the cash conditions due to redemption, Antara Capital will invest up to $25 million to cover the shortfall. The company is also looking to raise $40 million through Series B, bringing the total funding to around $150 million.
SPAC Perception Capital Corp III is taking RBio energy Corporation public in a deal valuing the combined company at $350 million.
RBio Energy, established in Washington state, aims to develop and acquire biorefinery, biogas, and biomass assets, primarily focusing on the Pacific Northwest region.
Perception, which raised $240 million in a July 2021 Initial Public Offering, currently has $42 million in cash in its trust account.
The merger is pending regulatory approval, and is expected to close in the second quarter, with the combined company listing on the Nasdaq Stock Exchange.
Roth CH Acquisition is requesting shareholders to vote for liquidating the trust while allowing the company to operate as a non-SPAC shell and continue trading over the counter.
Roth CH stated in the filing that it failed to secure a business combination as a SPAC and now plans to pursue acquisitions, with its board believing it's in shareholders' best interest to amend terms to allow share retention for future transactions.
Roth CH, previously known as TKB Critical Technologies 1, had $77 million in its trust prior to last December's shareholder meeting. The company, which raised $230 million in an October 2021 IPO, transferred sponsor holdings to Roth CH last June.
Former Credit Suisse chief Tidjane Thiam is in a dispute with SPAC partner Edward Zeng, whose firm sued Thiam's company for not paying $6 million in advisory fees.
China Bridge sued Thiam's company in New York for not paying advisory fees after introducing and helping merge with US solar business Complete Solaria, including due diligence and financial work.
The lawsuit comes 14 months after Thiam switched partners from Pimco to Edward Zeng, citing Zeng as a better fit for SPACs, following their merger with Complete Solaria. Since the merger, the company's share price has dropped from $10 to $1.26, drastically reducing its market value to $54.4 million.
China Bridge's lawsuit claims that under an October 2022 agreement, Freedom Acquisition was required to pay $6 million upon completing a deal, and Freedom's lawyers confirmed their client had approved and executed this agreement.
Thiam initially aimed his SPAC at fintech companies, dropping Mexican fintech Credijusto due to co-sponsor Pimco's valuation concerns and failing to secure a deal with genomics group Human Longevity. Eventually, Freedom Acquisition pivoted to Complete Solaria, a residential solar panel installer, with ambitious revenue projections of $285 million in 2023, boosted by US tax credits.
SPAC Deal Updates
A man facing insider trading charges linked to the SPAC merging with Donald Trump's social media firm now faces an additional money laundering charge in Manhattan federal court.
Michael Shvartsman faces new charges in a superseding indictment for conducting monetary transactions with profits from illegal activities, including buying a luxury yacht with part of his $18.2 million profit from selling Digital World Acquisition Corp securities in fall 2021. Shvartsman, along with his brother Gerald and Bruce Garelick, were previously indicted in June for securities fraud related to the same transactions.
The indictment alleges that the trio of investors bought and then sold DWAC securities for a profit after confidentially learning about its planned merger with Trump Media and Technology Group, which includes Truth Social, causing DWAC's share price to surge to $175.
Prosecutors claim the three men made $22 million in profits from selling DWAC securities, violating an agreement made in exchange for confidential merger information earlier in 2021.
Michael Shvartsman transferred $8.4 million from these profits to a Washing Account controlled by an associate, using it to hide the funds' origins due to its high transaction volume and balance. Later, Shvartsman moved about $12 million to his own account, ultimately using it to purchase a luxury yacht worth approximately $14.7 million.
Meme of the Day
Source: Hitting It Out of the Orbit