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Rosecliff Acquisition Corp I *

Rosecliff Acquisition Corp I *

Jan 27, 2021 by Matt Cianci

PROPOSED BUSINESS COMBINATION: Spectral MD Holdings, Ltd.

ENTERPRISE VALUE: $170 million
ANTICIPATED SYMBOL: MDAI

Rosecliff Acquisition Corp I proposes to combine with Spectral MD Holdings, Ltd., an FDA Breakthrough Designated company focused on Artificial Intelligence driven Medical Diagnostic Solutions

  • Spectral MD Holdings, Ltd. (AIM: SMD) is a predictive AI company focused on medical diagnostics for treatment decisions in wound care for burn, DFU, and future clinical applications. The Company’s DeepView® platform is the only predictive diagnostic device that offers clinicians an objective and immediate assessment of a wound’s healing potential prior to treatment or other medical intervention.
  • Spectral MD is nearing commercialization for DeepView® with planned FDA, CE and UKCA submissions for burn and DFU indications. Submission for UKCA Mark is anticipated for burn in 2023 and DFU in 2024, submission for U.S. FDA is expected for DFU in 2024 and burn in 2025, and submission for CE Mark for EU is expected for DFU in 2024 and burn in 2025.
  • Spectral MD intends to cancel the admission of its common stock to trading on the AIM market of the London Stock Exchange (the “Delisting”), subject to shareholder approval. Following the Delisting, all public trading of securities of the Company are expected to take place on Nasdaq.
  • The Combined Company will maintain its headquarters at the current office of Spectral MD in Dallas, Texas along with current operations in the U.K. and clinical testing in the U.K. and EU.

SUBSEQUENT EVENT – 9/7/23 – LINK

  • On September 6, 2023, the parties to the Business Combination Agreement agreed to amend the Lock-Up Agreement to revise the definition of “Lock-up Period” to mean for all lock-up shares held by the parties thereto, the period beginning on the closing date of the Business Combination and ending on the date on which the last reported sale price of Rosecliff common stock equals or exceeds $12.50 per share for any 10 trading days within any 30-trading day period commencing after the Closing Date or, if earlier, the date that is 180 days after the Closing Date.

TRANSACTION

  • The Combined Company expects to operate under the expected name Spectral AI and to be listed on Nasdaq under the symbol MDAI.
  • Following the completion of the proposed transaction, the Combined Company will operate under the same management team, led by founder and Chief Executive Officer Wensheng Fan with current Spectral MD shareholders rolling 100% of their equity into the Transaction.
  • The proposed Transaction values Spectral MD at an estimated enterprise value of $170 million, equivalent to approximately 101p per share on the AIM market (assuming no redemptions).
  • The proposed Transaction is expected to deliver gross proceeds to Spectral MD in excess of $20 million (assuming no redemptions). This includes approximately $4.5 million held in Rosecliff’s trust (assuming no redemptions) and an expected private placement investment of no less than $15 million.
  • The proposed Transaction is expected to be completed in Q3 2023.
  • Rosecliff’s current stockholders currently hold 8.4 million warrants, exercisable at $11.50 per share, which could provide up to an additional $97 million of cash to the Company depending on the Company’s stock price following closing of the Transaction.
  • Certain of Rosecliff’s expenses relating to the Transaction are capped at $3.25 million.

SPAC FUNDING

  • There is no additional funding for this deal at this time.

SPONSOR LETTER AGREEMENT

  • The Sponsor has agreed to surrender and forfeit to the Company the Private Placement Warrants.
  • The Sponsor and the Company, two days prior to the Closing, will notify Spectral MD if the accrued and unpaid Parent Expenses that are then outstanding are expected to exceed $3,250,000 (the “Excess Expense Amount”).
  • At Closing, the Sponsor will take necessary actions such that the Sponsor Credit equals or exceeds the Excess Expense Amount, provided that Sponsor will not be required to invest in the Sponsor PIPE if Sponsor elects to forfeit 750,000 Sponsor Shares.
  • The Sponsor will be entitled to a $5.00 credit against the Excess Expense Amount for each Sponsor Share that the Sponsor forfeits and surrenders prior to the Closing.
  • The Sponsor will be entitled to credit, dollar for dollar, the total amount of the aggregate investment made by the Sponsor or its affiliates in any private placement or other cash investment or contribution to Spectral MD or the Company (the “Sponsor PIPE”) against the Excess Expense Amount.
  • The Sponsor and its affiliates will receive one share of Company Class A common stock for each $10.00 invested in the Sponsor PIPE, and the Sponsor PIPE will otherwise be on the same terms as the other investors in the private placement.

Sponsor Class B Forfeiture

  • At Closing, the Sponsor is entitled to retain the Class B shares of common stock of the Company held by the Sponsor (the “Sponsor Shares”) corresponding to certain monetary thresholds of the amounts raised in the transactions.
    • If the Parent’s Closing Cash is
      • (i) less than $10 million, the Sponsor will forfeit and surrender a number of Sponsor Shares so that the Sponsor holds 750,000 Sponsor Shares
      • (ii) greater than or equal to $10 million, but less than $20 million, the Sponsor will forfeit and surrender a number of Sponsor Shares so that the Sponsor holds 1,000,000 Sponsor Shares
      • (iii) greater than $20 million, but less than $30 million, the Sponsor will forfeit and surrender a number of Sponsor Shares so that the Sponsor holds 1,250,000 Sponsor Shares
      • (iv) greater than $30 million, the Sponsor will forfeit and surrender a number of Sponsor Shares so that the Sponsor holds 1,500,000 Sponsor Shares.
    • In no event will the Sponsor hold more than 1,500,000 Sponsor Shares, in each case, excluding the Sponsor PIPE.

LOCK-UP

  • Sponsor and Company
    • 180 Days from the Closing Date
      • For 33.33% of the shares, they will be released if the share price equals or exceeds $12.50 for 20/30 trading days
      • For 50% of the shares, they will be released if the share price equals or exceeds $15.00 for 20/30 trading days

NOTABLE CONDITIONS TO CLOSING

  • The Transaction is not subject to any minimum cash condition. Neither a minimum cash in trust nor any minimum PIPE financing is a condition to closing.
  • The proposed Transaction is subject to, among other things, the approval by Rosecliff stockholders and Spectral MD shareholders and the satisfaction or waiver of other customary closing conditions.
  • The transaction was already unanimously approved by the boards of directors of both parties and is supported by irrevocable proxies and voting agreements of existing shareholders of Spectral MD holding greater than 50% of the outstanding shares.

NOTABLE CONDITIONS TO TERMINATION

  • September 30, 2023 (the “Termination Date”)

ADVISORS

  • Spectral MD Advisors:
    • Reed Smith LLP is serving as a legal advisor
    • Angel Corporate Finance LLP is acting as nominated adviser and broker in connection with the Transaction
  •  Rosecliff Advisors:
    • Skadden, Arps, Slate, Meagher & Flom LLP is serving as a legal advisor

EXTENSION – 12/22/22 – LINK

  • The SPAC approved to extend from February 17, 2023 to February 17, 2024
    • 24,841,284 (98.2%) shares were redeemed. 

The below-announced combination was terminated on 3/11/22.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: Gett Inc [TERMINATED on 3/11/22 – LINK]

ENTERPRISE VALUE: $950 million
ANTICIPATED SYMBOL: GETT

Rosecliff Acquisition Corp I proposes to combine with Gett Inc, the category-leading corporate Ground Transportation Management (GTM) platform.

Corporate ground transportation spend exceeds $100 billion globally and remains extremely fragmented across tens of thousands of vendors. With no single platform to organize all providers and manage the entire spend, we estimate more than $25 billion of corporate ground transportation spend is misallocated due to inefficiencies.

Gett is a technology platform focused on solving these challenges and focused on two things:

  • 1) aggregating different vendors on a single platform
  • 2) managing corporate spend on ground transportation.

Gett’s platform is designed to deliver the best pricing and fastest pickups for corporate clients and Gett believes that, as a result of the aggregation of fragmented vendors, its B2B marketplace is greater than the sum of its parts. As the current GTM category leader, Gett serves more than a quarter of current Fortune 500 companies.

Gett leverages its deep expertise across both consumer and corporate domains. Since 2017, the Company has focused principally on B2B, creating an entirely new B2B ground transportation marketplace organizing all vendors in a single platform and providing a cloud-based spend management software. Gett’s marketplace aggregates and organizes thousands of independent ground transportation providers, including corporate fleets, ride hailing services, taxis, and limousines. Gett estimates that its spend management software helps businesses save 25% on average and up to 49% of their ground transportation spend.

TRANSACTION

  • The transaction reflects an implied pro forma enterprise value at closing of $1 billion.
  • The transaction will provide up to $253 million in gross proceeds from Rosecliff’s trust account, with an additional $30 million in gross proceeds from a fully committed common equity PIPE from Rosecliff’s sponsors and existing Gett shareholders.
  • At the SPV Merger Effective Time, Pubco will issue to the shareholders of the Company an aggregate number of Pubco Ordinary Shares equal to the quotient of $821 million (“SPV Value”) divided by $10.00 per share (the “SPV Share Consideration”). A portion of the SPV Share Consideration shall be issued at the closing of the business combination, with the remaining portion of the SPV Share Consideration to be issued upon the earliest to occur of:
    • (i) the two year anniversary of the Closing Date
    • (ii) the date on which the product of the SPV Share Consideration and the Pubco VWAP is equal to or greater than $3.1 billion for a period of at least twenty consecutive trading days
    • (iii) immediately prior to the consummation of a Pubco Sale. Promptly after the Reorganization, each issued and outstanding option in the Company or its subsidiaries, whether vested or unvested, will automatically be converted into and exchanged for an SPV Holdco Option.
      • Subject to certain limited exceptions, at the SPV Merger Effective Time, each issued and outstanding SPV Holdco Option, whether vested or unvested, will automatically be converted into and exchanged for an option to purchase Pubco Ordinary Shares.

gett trans overview

PIPE

  • $30 million in gross proceeds from a fully committed common equity PIPE from Rosecliff’s sponsors and existing Gett shareholders.
    • The Subscription Agreements will terminate and be void and of no further force or effect and all rights and obligations of the parties thereto will terminate without further liability, upon the earlier to occur of:
      • (a) such date and time as the Business Combination Agreement is validly terminated in accordance with its terms prior to the consummation of the Merger
      • (b) the mutual written consent of each of the parties to each such Subscription Agreement
      • (c) the closing conditions under the Subscription Agreement not being satisfied or waived and the transactions contemplated by the Subscription Agreement not being consummated at the closing of the PIPE Investment
      • (d) September 30, 2022 if the Merger has not occurred on or before such date.

SUPPORT AGREEMENT

  • Sponsor and Company
    • (i) Sponsor and Acquiror’s officers and directors will agree to vote to adopt and approve the Business Combination Agreement and the Transactions, including the SPAC Merger
    • (ii) Sponsor will agree to waive any adjustment to the conversion ratio set forth in the Governing Documents of Acquiror or any other anti-dilution or similar protection with respect to the shares of Class B Common Stock held by the Sponsor (whether resulting from the transactions contemplated by the Subscription Agreements or otherwise)
    • (iii) Sponsor will agree to defer the vesting of twenty-five percent (25%) of the Pubco Ordinary Shares it receives upon the conversion of the shares of Class B common stock, par value $0.0001 per share, of SPAC held by Sponsor in connection with the Mergers as described in the Business Combination Agreement until, and subject to, the occurrence of certain price targets set forth in the Sponsor Support Agreement, in each case on the terms and subject to the conditions set forth in the Sponsor Support Agreement
    • (iv) Sponsor has agreed to certain restrictions on the transfer of shares of Rosecliff Common Stock and Rosecliff Private Warrants held by Sponsor in each case on the terms and subject to the conditions set forth in the Sponsor Support Agreement
    • (v) Sponsor has agreed that it will be subject to a lock-up that will, subject to certain exceptions, prohibit it from selling any Pubco Ordinary Shares or Pubco Private Warrants for a certain period following the Closing.

NOTABLE CONDITIONS TO CLOSING

  • $137 million in cash being available from the Trust Account, after giving effect to the Redemption and the PIPE Financing.

NOTABLE CONDITIONS TO TERMINATION

  • By written notice by either Rosecliff or the Company if any of the conditions to closing set forth in the Business Combination Agreement shall not have occurred prior to June 30, 2022 (the “Outside Date”)

ADVISORS

  • Jefferies is acting as financial and capital markets advisor to Gett.
  • Davis Polk & Wardwell LLP and DLA Piper are acting as legal counsel to Gett.
  • BTIG, LLC and Piper Sandler are acting as financial advisors and capital markets advisors to Rosecliff.
  • Latham & Watkins LLP is acting as legal counsel to Rosecliff.
  • In addition, Pareto Securities AB, SberCIB, and ITI Group Ltd. are acting as capital market advisors on the transaction.

MANAGEMENT & BOARD

Executive Officers

Michael Murphy, []
Chief Executive Officer and Director

Michael Murphy began his investing career over 25 years ago. His career has been focused on being an entrepreneur in the investing and financial service industry. In the past, he was the Founder of a wealth management firm, hedge fund and multiple commercial real estate portfolios. As described above, in 2016, Mr. Murphy founded Rosecliff and has served as its Managing Partner since its inception. Over the past four years, Rosecliff has made over 80 investments, raised over $800 million in assets under management, launched seven investment funds and experienced multiple portfolio company exits. Mr. Murphy’s extensive network has helped Rosecliff create a vast funnel of incoming deals each year for the firm. A few select transactions from the Rosecliff portfolio include; Allbirds, Casper, Postmates, Ro, Thirty Madison, Petal and Wheels Up. Mr. Murphy is currently a board member of multiple private, venture capital backed companies including Cargo Systems, Squarefoot, ForDays and Agile Stacks. He brings his extensive experience, knowledge and passion to assist companies in their growth phase. Mr. Murphy previously was a contributor on CNBC and regularly appeared on the network’s FASTMONEY segment. Currently, Mr. Murphy is a regular contributor on Fox Network and makes appearances each week on Varney & Co, Mornings with Maria & Cavuto. He uses this platform to discuss trends in both private equity and public markets. Mr. Murphy earned a Bachelor of Arts in Business Administration from Hofstra University.

Jordan Zimmerman, []
President and Director

Jordan Zimmerman is the Chairman and Founder of Zimmerman Advertising. Mr. Zimmerman founded Zimmerman Advertising in 1984 and has continued to work tirelessly, personifying a commitment to be the best. Mr. Zimmerman trademarked his advertising strategy, “Brandtailing®,” a maverick combination of long-term brand building and short-term sales boosting that delivers measurable results. Highly respected within the advertising world, Mr. Zimmerman is often asked to address industry groups and participate in panel discussions across the country. Zimmerman Advertising has worked with highly recognizable and successful businesses in the consumer sector, such as Nissan, McDonald’s, Dunkin’ Donuts, Five Below, Party City, Kay Jewelers, AutoNation, Michaels, Advance America, TBC/Tire Kingdom, Office Depot, and Carfax. The agency works with these companies to help increase brand awareness, market share and overall company growth. Zimmerman Advertising’s goal is to help make the companies it partners with market leaders in their respective fields. Mr. Zimmerman strives to drive growth by dreaming bigger, acting limitlessly and leading fearlessly. Outside of work, Mr. Zimmerman is an author, a philanthropist, a Horatio Alger Award recipient and a Golden Circle Member of the National Multiple Sclerosis Society who proudly works hard to grow his community in many ways but none more than his driving dedication to improving the education system in this country as a foundational step in making life better for generations to come. In March 2015, with a donation of $10 million dollars from the Jordan Zimmerman Family Foundation, Mr. Zimmerman established the University of South Florida Zimmerman School of Advertising and Mass Communications and its highly regarded Zimmerman Advertising Program. Mr. Zimmerman has a hands-on approach to building the curriculum and has helped the program to build an established media program. Mr. Zimmerman was appointed by the Governor of Florida for a second term to sit on the Board of Trustees at the University of South Florida where he has served as the Chairman of the Board since 2019. Mr. Zimmerman earned a Bachelor of Arts in Advertising and an MBA from the University of South Florida and was awarded an honorary Doctorate of Business Administration from Nova Southeastern University.

Kieran Goodwin, []
Chief Financial Officer

Kieran Goodwin founded Panning Capital Management, L.P. (“Panning”) in 2012 and was Co-Managing Partner and Portfolio Manager until 2018. Panning was a long/short credit hedge fund with a peak AUM of $2.5 billion during Mr. Goodwin’s tenure. From 2004 to 2010, Mr. Goodwin was the Head of Trading and one of five partners and four members of the Global Investment Committee at King Street Capital Management (“King Street”). As Head of Trading, Mr. Goodwin was responsible for managing King Street’s twenty traders. During his time at King Street, the firm’s AUM grew from $4 billion to approximately $20 billion. Mr. Goodwin previously was a Managing Director at both UBS and Merrill Lynch, where he ran proprietary trading books. Since 2018, Mr. Goodwin has invested his own capital in both private and public markets. He is an investor in many early-stage companies and currently serves on the board of directors of Tradewell Technologies Inc. and Zoomi Inc. Additionally, he serves on the board of directors Voya Prime Rate Trust, a public closed-end loan fund. Mr. Goodwin received a Bachelor of Arts in Computer Science, cum laude, from Duke University in 1991.

 

Board of Directors

Brian Radecki, []
Director

Brian Radecki is the Founder, Chief Executive Officer and member of the Board of Directors of Rapa Therapeutics (“Rapa”), a clinical stage start-up biotechnology company, spun out of the National Cancer Institute in September 2017. Rapa is developing a cell therapy platform focused on cutting-edge curative immunotherapy treatments for cancer, neurodegenerative, autoimmune and inflammatory diseases. After experiencing many people close to him being afflicted by these deadly illnesses, Mr. Radecki has made it his mission to find a better way to treat and help people with these devastating diseases. Mr. Radecki is an active angel investor in, or advisor to, several companies across various industries — from start-ups with zero revenue, to pre-IPO and large public companies. He has over 20 years of experience building both small private and large public companies. He works closely with many top-tier private equity, venture capital and institutional investors along with entrepreneurs, boards of directors and senior management teams to build disruptive and innovative platform companies by executing strategic plans to get things done. Mr. Radecki is currently an investor and director on the board of Wheels Up. Previously, Mr. Radecki was an early investor in, and served on the board of directors of, Rain King Software, Inc., a leading sales and marketing intelligence platform, when it was acquired in August 2017 by Zoom Info (NASDAQ: ZI) (formerly DiscoverOrg); Docutech, a document, eSign, eClosing and compliance technology provider, when it was acquired by First American (NYSE: FAF) for $350 million in March 2020; and Optimal Blue, a digital marketplace in the residential mortgage industry, which was recently acquired by Black Knight, Inc. (NYSE: BKI). Also, Mr. Radecki invested pre-IPO in other companies including Beyond Meat (NASDAQ: BYND) and Skillz Inc. (NYSE: SKLZ), which is merging (via SPAC) with Flying Eagle Acquisition Corp. (NASDAQ: FEAC). A number of his early or pre-IPO investments have resulted in returns over 10 times his MOI. After working approximately 20 years at public companies, Mr. Radecki retired in 2016 from CoStar Group Inc. (“CoStar”) (NASDAQ: CSGP), a provider of commercial real estate information, analytics and online marketplaces, where he held several senior operational and financial roles over 18 years, including Executive Vice President, Chief Financial Officer and VP of Research Operations (the Company’s largest operating area). While at CoStar, Mr. Radecki oversaw or played a major role in CoStar’s accounting and finance operations in the U.S. and U.K. — from internal audit, tax and budgeting to SEC reporting, Sarbanes-Oxley compliance and due diligence. Additionally, Mr. Radecki helped lead CoStar’s 1998 initial public offering, multiple follow on equity offerings and international expansion, as well as leading several acquisitions and the integration of public companies, including Comps.com (NASDAQ: CDOT) in 2000 for $102 million, and LoopNet (NASDAQ: LOOP) in 2012 for $860 million. Also, Mr. Radecki was named the Washington Business Journal’s “CFO of the Year” in the large company category for 2012. During 2014, he led and raised nearly $1.1 billion of debt and equity. Mr. Radecki also played a major role in acquisitions of Apartments.com in 2014 for $585 million and ApartmentFinder in 2015 for $170 million, which allowed CoStar to successfully enter a new strategic vertical and significantly expanded CoStar’s total addressable market. Mr. Radecki was instrumental in building CoStar from a small pre-IPO start-up to a multi-billion dollar public company. During his tenure, CoStar’s substantial growth resulted in an over 2,000% shareholder return. Before joining CoStar, Mr. Radecki worked at Axent Technologies, Inc. (Nasdaq: AXNT), an international security software company; Azerty, Inc. and the public accounting firm, Lumsden & McCormick, LLP, both based in Buffalo, NY. Mr. Radecki earned a Bachelor of Science from University of New York at Buffalo, with a dual degree in Accounting and Finance.

Frank S. Edmonds, []
Director

Frank S. Edmond shas been a Partner at Panning Capital Management, L.P. since 2013, where he served as Co-Managing Partner and Head of Research from 2013 to 2018. From 2002 to 2012, Mr. Edmonds was a Senior Research Analyst at King Street, where he served as one of five partners and four members of the Global Investment Committee. Prior to King Street, Mr. Edmonds was a research analyst at Oak Hill Advisors. He serves on the boards of Shane’s Rib Shack, a fast casual barbeque restaurant business with 65 locations in the Southeast, as well as the Darden Graduate School of Business and the Jefferson Scholars Foundation. He is currently the Chair of the Investment Committee at Woodberry Forest School. Mr. Edmonds received a B.A. in History/American Studies and joint M.B.A./J.D. degrees from the University of Virginia.

Heather Bellini, []
Director

Ms. Bellini has been the Chief Financial Officer of Deep Instinct, a New York and Israeli based cyber security software company since 2020. Prior to Deep Instinct, Ms. Bellini was a Partner at Goldman Sachs since 2012. At Goldman Sachs, she was the Business Unit Leader of the Technology Research Group, as well as an equity research analyst covering the Software sector and select Internet-related companies. Ms. Bellini’s universe of research coverage had a significant market capitalization. Ms. Bellini was also responsible on the research side in bringing to market 20 of the companies in her coverage universe through their initial public offerings, including Anaplan, Atlassian, Cloudflare, Crowdstrike, Dropbox, Dynatrace, Elastic NV, Facebook, MongoDB, Okta, Ping Identity, Rackspace Holdings, Salesforce, Slack Technologies, Snowflake, Solarwinds, Twilio, Unity, VMware, Workday and Zoom Video Communications. Ms. Bellini was named to the inaugural Barron’s 100 Most Influential Women in Finance in 2020. Prior to joining Goldman Sachs, Ms. Bellini was a senior managing director and head of technology research at International Strategy and Investment from 2009 to 2011. Earlier, she was head of technology research as well as a software analyst at UBS from 2003 to 2009. Ms. Bellini earned a BA in Economics from Denison University and an MBA in Finance from Columbia University. Ms. Bellini is a CFA charterholder.

 

 

 

ByMatt Cianci