Aesther Healthcare (AEHA) Arranges Common Stock Purchase Agreement
Aesther Healthcare Acquisition Corp. (NASDAQ: AEHA) (“AHAC”) announced this afternoon that it has entered into a Common Stock Purchase Agreement with White Lion Capital, LLC in connection to its combination with automotive component manufacturer United Gear & Assembly.
The agreement allows AHAC the right, but not the obligation to require White Lion to purchase, from time to time, up to $50 million newly issued shares of common stock, par value $0.0001 per share, or, following the closing, newly issued shares of common stock, par value $0.0001 per share together with the pre-merger common stock.
AHAC’s right to sell these shares to White Lion will start on the date of the registration statement and extend for two years. During this term, the SPAC may notify White Lion when it exercises its right to sell shares. And, the number of shares sold pursuant to any such notice cannot exceed $1 million divided by the closing price of common stock preceding the Notice Date and a number of shares of common stock equal to the average daily trading volume multiplied by 67%.
The purchase price to be paid by White Lion for the shares will equal 95.0% of the lowest daily VWAP during two consecutive trading days following the applicable notice date. But, if throughout those two-trading days, the price of the common stock falls below a price equal to 90% of the opening price, then the number of shares to be purchased by White Lion will be reduced proportionately based on the portion of the period that has elapsed, and the purchase price will equal 95.0% of the threshold price.
Furthermore, AHAC will have the right to terminate the agreement at any time following the commencement at no cost or penalty. But, this is only upon three trading days’ prior written notice if there is a fundamental transaction, AHAC is in breach of the White Lion Registration Rights Agreement (“RRA”), there is a lapse of effectiveness of the registration statement for 45 consecutive trading days, the common stock is suspended from trading for five consecutive days, or if there is a material breach of the agreement by AHAC.
The SPAC has agreed that it will issue $500K shares of common stock to White Lion based on the VWAP of the common stock prior to the issuance. This is expected to occur following the closing and will include the shares in the registration statement that will be filed pursuant to the White Lion RRA.
The SPAC announced its business combination with United Gear just a couple of months ago on May 27, right before the Memorial Day weekend. Hudson, Wisconsin-based United Gear is a subsidiary of United Stars Holdings, focused on manufacturing small to medium-sized precision gears and shafts for a variety of industries.