Good Works II Acquisition Corp. *

Good Works II Acquisition Corp. *

Mar 18, 2021 by Nat Judge

LIQUIDATION – 2/22/23 – LINK

  • As of the close of business on March 16, 2023, the company will not consummate a business combination and will dissolve and liquidate
    • No redemption price was mentioned.

The below-announced combination was terminated on 2/16/23.  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: Direct Biologics, LLC [Terminated]

ENTERPRISE VALUE: $723 million
ANTICIPATED SYMBOL: tbd

Good Works II Acquisition Corp. proposes to combine with Direct Biologics, LLC.

Direct Biologics and cGMP manufacturer of the regenerative biologic product candidate ExoFlo, a therapeutic candidate in late-stage development derived from the company’s proprietary EV platform technology that is designed to leverage the regenerative properties of bmMSC-derived extracellular vesicles.

ExoFlo is currently in a Phase 3 clinical trial for the treatment of hospitalized adults with severe-to-critical COVID-19 associated moderate-to-severe ARDS, as well as an FDA-authorized Expanded Access Protocol for hospitalized patients with COVID-19 associated moderate-to-severe ARDS.

Direct Biologics intends to pursue additional clinical applications of ExoFlo. With headquarters in Austin, Texas, Direct Biologics has an R&D facility on the campus of the University of California San Diego, Center for Novel Therapeutics, and operations and an order fulfillment center in San Antonio, Texas.


EXTENSION – 10/13/22 – LINK

  • The business combination was extended from October 14, 2022, to April 14, 2023.
    • At the meeting, 20,525,530 shares were redeemed. (89.241%)

TRANSACTION

  • There is a minimum cash condition of at least $75.0 million in net cash.
  • Direct Biologics is also conducting a private placement of up to $100 million.
  • IB Investments I LLC, an affiliate of the placement agent and the sponsor of Good Works II, has invested $5.0 million in the private placement.
  • The aggregate consideration available to be received by the members of Direct Biologics is based on an enterprise value of $1,025,000,000 and consists of
    • (i) shares of Company Topco common stock and Direct Biologics Up-C units based on a pre-money enterprise value of $625 million with equity consideration valued at $10.00 per share,
    • (ii) shares of Company Topco common stock and Direct Biologics Up-C units currently valued at $50 million that are subject to forfeiture if Direct Biologics does not achieve a primary efficacy endpoint of 60-day all-cause mortality in its Phase 3 EXTINGuish trial by December 31, 2023, and
    • (iii) shares of Company Topco common stock and Direct Biologics Up-C units currently valued at $350 million that are subject to forfeiture if Direct Biologics does not obtain either Biologics License Application approval or Emergency Use Authorization from the FDA for its ExoFlo product (or a derivative product for any applicable indication) by December 31, 2024.

direct bio overview


PIPE

  • IB Investments I LLC, an affiliate of the placement agent and the sponsor, has invested $5.0 million in the private placement.
  • The parties are seeking to raise at least an additional $8 million by November 21, 2022, and $20 million by December 15, 2022, for a total of at least $25 million in private placements.
    • Once the Initial Funding Amount is achieved, Good Works and Direct Biologics will then use their best efforts to raise a minimum of at least $75 million.

EARNOUT

  • Company
    • 5 million share earnout contingent upon meeting a primary endpoint in Phase 3 EXTINGuish trial by end of 2023
    • 35 million share earnout contingent upon BLA approval or EUA of ExoFlo by the end of 2024

LOCK-UP

  • Sponsor
    • One year from the Closing Date
      • 33.33% of the shares will be released if the shares are equal to or above $12.50 for 20/30 trading days at least 90 days after the Closing Date
      • 50% of the shares will be released if the shares are equal to or above $15.00 for 20/30 trading days at least 90 days after the Closing Date
  • Company
    • One year from the Closing Date
      • 33.33% of the shares will be released if the shares are equal to or above $12.50 for 20/30 trading days at least 90 days after the Closing Date
      • 50% of the shares will be released if the shares are equal to or above $15.00 for 20/30 trading days at least 90 days after the Closing Date
  • Private Placement Shareholders
    • 50% of the equity securities issued in the Private Placement will be subject to a one-month lock-up following the Closing of the Business Combination
    • 50% of the equity securities issued in the Private Placement will be subject to a two-month lock-up following Closing.

SPONSOR ARRANGEMENTS

  • The initial shareholders have agreed to cancel a proportionate share of up to 1,925,000 Founder Shares, based on the amount of Available Cash at Closing.
  • The Sponsor and certain other initial shareholders have agreed to cancel a proportionate share of up to 150,000 Founder Shares based on entry valuation for the Private Placement.
  • The Sponsor will agree to transfer 25,000 Founder Shares to Direct Biologics for the purposes of Direct Biologics donating such shares to a charity of its choice.

NOTABLE CONDITIONS TO CLOSING

  • The combined company is required to have at least $75.0 million in net cash at closing.
  • Good Works’ total transaction expenses shall not exceed $14 million

NOTABLE CONDITIONS TO TERMINATION

  •  If the Business Combination is not consummated by January 31, 2023
  • By either Good Works or Direct Biologics if any governmental authority in the United States issues an injunction, order, decree or ruling that has the effect of making consummation of the Business Combination illegal or otherwise preventing or prohibiting consummation of the Business Combination
  • By Direct Biologics if the parties have not raised at least $13 million in private placements by November 21, 2022 or at least $25 million in private placements by December 15, 2022

ADVISORS

  • Raymond James & Associates, Inc. is serving as financial advisor to Direct Biologics.
  • IB Capital LLC (“IBC”) is serving as placement agent for the private placement and an affiliate of IBC, I-B Good Works 2, LLC, is the sponsor of Good Works II.
  • I-Bankers Securities, Inc., acted as the sole book-running manager and the representative of the underwriters for the initial public offering of Good Works II.
  • ArentFox Schiff LLP is acting as legal counsel to Good Works II.
  • Goodwin Procter LLP is acting as legal counsel to Direct Biologics.
  • Ellenoff Grossman & Schole LLP is acting as legal counsel to IBC.

MANAGEMENT & BOARD


Executive Officers

Douglas Wurth, 55
Chief Executive Officer and Director

Prior to this, Mr. Wurth led major businesses within J.P. Morgan Asset Management during his nearly 20 years at J.P Morgan from 1997 to 2016. As Chief Executive Officer of Alternative Investments for J.P. Morgan Asset Management, he managed businesses with over $120 billion in alternative assets. Prior to that role, Mr. Wurth was the Chief Executive Officer of J.P. Morgan’s International Private Bank, where he led the expansion of the franchise in Asia, Latin America and Europe while based in New York, Hong Kong, and London. Since leaving J.P. Morgan, Mr. Wurth has invested in and helped lead several private companies, of which he is Chairman of the Board of Standard Power, Bluejay Diagnostics, and Vestrata, and a board member of Triax Technologies. Before joining J.P. Morgan, Mr. Wurth practiced law at the New York firm Skadden, Arps, Slate, Meagher & Flom from 1992 to 1995, and served as General Counsel to former U.S. Senator Robert Dole’s 1996 presidential campaign. Mr. Wurth earned a Bachelor of Arts degree from the University of Notre Dame and a J.D. from the University of Virginia School of Law.


Cary Grossman, 67
President, Chief Financial Officer, and Director

Mr. Grossman is a veteran finance professional with a combination of executive management, investment banking and public accounting experience. His extensive experience includes interim management and restructuring of distressed businesses, public and private placements of debt and equity, mergers & acquisitions, initial public offerings, building and leading management teams, oversight of company financial functions, investor relations, and corporate governance. In 2010, Mr. Grossman co-founded Shoreline Capital Advisors, an investment banking firm focused on financial advisory services and middle market corporate finance transactions. Prior to Shoreline, from 1991 – 2002, Mr. Grossman co-founded and was CEO of another investment banking firm, McFarland, Grossman & Company. Earlier in his career, he practiced public accounting for 15 years. Mr. Grossman has also held a number of executive positions, including; President of XFit, Inc. from 2019 to 2021, Chief Financial Officer for Blaze Metals, LLC from 2007 to 2010; Executive Vice President, Chief Financial Officer and Chief Operating Officer of Gentium, S.P.A. from 2004 to 2006; Chief Executive Officer of ERP Environmental Services, Inc. and Chief Financial Officer of U.S. Liquids, Inc. from 2001 to 2003. He also co-founded Pentacon, Inc. (NYSE: JIT) and served as a board member and Executive Chairman from 1998 – 2002, and as a director of Metalico (NYSE: MEA) 2014 – 2015 and INX Inc (NASDAQ: INXI) 2004 – 2011. Mr. Grossman is a Certified Public Accountant and earned a Bachelor of Business Administration from the University of Texas. We believe that Mr. Grossman is well qualified to serve on our board of directors due to his extensive corporate finance and management experience, his prior experience with SPACs and his overall public company experience.


Board of Directors

Fred Zeidman, 74
Chairman

Mr. Zeidman has served as Chief Executive Officer and Co-Chairman of Good Works Acquisition Corp. since June 2020. Mr. Zeidman has served as Chairman of Gordian Group LLC, a U.S. investment bank specializing in board level advice in complex financial matters since December 2014. Over the course of his distinguished 50-year career, Mr. Zeidman has served in a number of high-profile executive roles. In addition to his role with Gordian Group, he is also a director of Prosperity Bank in Houston. His leadership roles have included: Chairman of the Board and Chief Executive Officer of Unibar Corporation, the largest domestic independent drilling fluids company, until its sale to Anchor Drilling Fluids in 1992, President and CEO of Crown Services (1992-1994), President and CEO of Intersystems, President and CEO of Interpak Systems (March 2002 to December 2007), Chairman, Chief Executive Officer and President of Seitel, Inc. (June 2002 until the sale of the company in February 2007), a Houston-based onshore seismic data provider where he was instrumental in the successful turnaround of the Company, Chief Bankruptcy Trustee of AremisSoft Corp. (1999-2002), Chief Restructuring Officer of TransMeridian Exploration Inc. (August 2009 until the sale of company in November 2009), a Director of the REMA subsidiary of NRG Energy, Lead Director of Straight Path Communications (July 2013 to May 2017), and CFO of the Texas Heart Institute where he led a complex financial restructuring and assisted in the integration of St. Luke’s Episcopal Hospital System and Baylor College of Medicine into Catholic Health Initiatives. Mr. Zeidman was appointed Chairman of the US Holocaust Memorial Council by President George W. Bush in 2002, and served until 2010, and is Chairman Emeritus. He was Chairman of the University of Texas Health Science System Houston and is Chairman Emeritus. Mr. Zeidman was a Director of the Texas Heart Institute. He is on the board of the Development Corp of Israel (Israel Bonds) and served on the Board and Executive Committee of the National World War II Museum.


Jeffrey A. Rosen, 63 
Independent Director Nominee

During 2019-2021, Mr. Rosen served as the 38th Deputy Attorney General, and ultimately, as the acting Attorney General of the United States (Dec.2020-Jan.2021). As the Chief Operating Officer of a Department with a budget in excess of $30 billion and more than 110,000 employees, Mr. Rosen oversaw all of the Justice Department’s law enforcement agencies, litigating divisions, U.S. Attorney offices, and its management and policy offices. During 2017-2019, Mr. Rosen was the 21st U.S. Deputy Secretary of Transportation, which made him the Chief Operating Officer of a Department with a budget in excess of $80 billion and more than 55,000 employees. In that role, Mr. Rosen also served as Chair of DOT’s Safety Council, Chair of DOT’s Council on Credit and Finance, Chair of DOT’s Non-Traditional and Emerging Technologies Council, Chair of DOT’s Economic Growth Council, as DOT’s Regulatory Reform Officer, a member of FAA’s Management Advisory Council, as well as Chair of the Union Station Redevelopment Corporation board of directors. Earlier, Mr. Rosen had served as General Counsel at the U.S. Department of Transportation (2003-2006), where he also served as the government’s representative on the Amtrak board of directors (2005-2006). Mr. Rosen also previously served as General Counsel and Senior Policy Advisor for the White House Office of Management and Budget (2006-2009). In 2013, Mr. Rosen was appointed as a Public Member of the Administrative Conference of the United States, and served until 2017. Mr. Rosen was formerly a partner at the law firm of Kirkland & Ellis LLP, where he worked for nearly three decades (1982-2003 and 2009-2017). During his years in private law practice, Mr. Rosen handled complex business litigation and regulatory matters and served in the firm’s management. Mr. Rosen received a B.A. (economics) with Highest Distinction from Northwestern University (1979) and a J.D. Magna Cum Laude from Harvard Law School (1982).


Linda L. Addison, 69 
Independent Director Nominee

Ms. Addison is an experienced independent director, chief executive and global business leader. Since 2018. Ms. Addison has been a member of the Board of Directors of Globe Life Inc. (NYSE: GL) (formerly Torchmark Corporation (NYSE: TMK)), an S&P 500 company, and became Chair of its Compensation Committee in 2020. Since 2018. Ms. Addison served as an independent board member of KPMG LLP, the Big 4 US audit, tax and advisory firm. Ms. Addison previously served on the Advisory Board of Northern Trust Bank, N. A. From 1984 to 2017, Ms. Addison was a partner at Norton Rose Fulbright, one of the world’s largest law firms, where she served as US Managing Partner (CEO equivalent), Chair of the US Management Committee, and global board member. Ms. Addison earned the CERT Certificate in Cybersecurity Oversight from Carnegie Mellon University’s Software Engineering Institute. Ms. Addison earned a J.D. from The University of Texas School of Law, where she was Managing Editor of the Texas Law Review, and earned a B.A. from The University of Texas at Austin (Plan II Honors Program). Ms. Addison was named a Distinguished Alumna of the University of Texas at Austin. As a global business leader with more than three decades of practical experience, Ms. Addison brings a broad array of skills to the Board, including expertise in corporate governance, cybersecurity oversight, technology, strategic planning, risk assessment and risk management, regulatory/compliance, compensation, mergers and acquisitions, human capital management, and marketing.


Stephen J. Harper, 61 
Independent Director Nominee

Mr. Harper served as Canada’s 22nd Prime Minister from 2006 to 2015. Since 2016, Mr. Harper has served as the Chairman and CEO of Harper & Associates, a global consulting and investment advisory business, and since 2016 Mr. Harper has served as a Director of Colliers International Group Inc. and Recover Inc. Since 2018, Mr. Harper has also served as Chairman of the International Democrat Union and the Friends of Israel Initiative. Mr. Harper has a bachelor and master’s degrees in economics from the University of Calgary, an honorary doctorate from Tel Aviv University and an honorary degree from the Jerusalem College of Technology. Mr. Harper is a Companion of the Order of the Canada and the recipient of numerous international awards.


Adelmo Lopez, 55 
Independent Director Nominee

Mr. Lopez founded Finca Terrerito in 2008, now Alma Coffee, LLC and is its Chairman and Chief Executive Officer. Alma Coffee, roasts and wholesales premium coffees from Latin America. From 2008-2017, Mr. Lopez was also a member of Gerson Lehrman Consulting Group. Prior to that, from 2006-2008 he was President and Chief Executive Officer of Blair Corporation, a $400+ million multi-channel direct marketer of apparel and home goods. He served in several capacities including as Group General Manager of Russell Corporation, a $1.4 billion athletic and activewear company from 2004-2006. Earlier positions include: Chief Financial Officer of Dole Fresh Fruit International, a $1.6 billion subsidiary of Dole Food Company, Regional Vice President of Frito Lay, Inc., and in two divisional Chief Financial Officer roles with Sara Lee Corporation. Mr. Lopez is a certified public accountant and began his business career with Coopers & Lybrand. He also served in the United States Army. Mr. Lopez earned a Bachelor of Science degree in Accounting from the University of Illinois in Chicago and a Master of Business Administration from the Owen Graduate School of Management at Vanderbilt University.