Mountain Crest Acquisition Corp. II
PROPOSED BUSINESS COMBINATION: Better Therapeutics, Inc.
ENTERPRISE VALUE: $184 million
ANTICIPATED SYMBOL: BTTX
Mountain Crest Acquisition Corp. II proposes to combine with Better Therapeutics, Inc. a prescription digital therapeutics company delivering cognitive behavioral therapy to address the root causes of cardiometabolic diseases. The transaction values Better Therapeutics at a pro forma fully diluted enterprise value of approximately $187 million with existing Better Therapeutics shareholders rolling over 100% of their equity into equity of the combined company. Upon completion of the transaction, which is anticipated in the summer 2021, the combined company will operate as Better Therapeutics and securities are expected to be listed on Nasdaq under the symbol “BTTX.”
Better Therapeutics has created a platform for the development of prescription digital therapeutics (PDT) for the treatment of diabetes, heart disease and other cardiometabolic conditions. The Better Therapeutics platform blends clinical, behavioral and psychological inputs into a series of therapy lessons and skill-building modules designed to isolate and shift the underlying thoughts and beliefs which guide diet and lifestyle behaviors that are the root causes of a wide range of cardiometabolic diseases. The delivery of behavioral therapy enables changes in neural pathways of the brain and leads to behavioral change. These therapies and the resulting changes hold the potential to lower healthcare costs to treat these conditions and improve patient health.
Better Therapeutics’ first PDT (BT-001) is being evaluated in a pivotal trial as a treatment for type 2 diabetes used under physician supervision. It is anticipated that following marketing authorization, primary care providers will prescribe, and insurers will reimburse Better Therapeutics’ PDTs much like they would a traditional medication.
TRANSACTION
PIPE
- $50 million fully committed PIPE at $10.00 per share led by Farallon, RS Investments, Sectoral, and Monashee, with participation from other undisclosed investors
LOCK-UP
- BTX shareholders agree to restrictions on shares until 6 months after the closing date
SUPPORT AGREEMENTS
- Certain holders of MCAD and BTX common stock have agreed to approve the Merger Agreement and the proposed Merger
NOTABLE CONDITIONS TO CLOSING
- After giving effect to all redemptions of MCAD Common Stock in connection with the merger, the net tangible assets held by MCAD shall be equal to at least $5,000,001
- The PIPE Financing discussed below shall have been consummated pursuant to the Subscription Agreements
- Certain BTX Shareholders have entered into a lock-up agreement
NOTABLE CONDITIONS TO TERMINATION
- The outside date for the closing of the Business Combination is October 8, 2021 (edited 9/1/21) – LINK
ADVISORS
- Cowen is acting as exclusive financial advisor and capital markets advisor to Better Therapeutics.
- Lake Street is also serving as a capital markets advisor to Better Therapeutics.
- Goodwin Procter LLP is acting as legal counsel to Better Therapeutics.
- Chardan is acting as exclusive M&A advisor and financial advisor to Mountain Crest II.
- Loeb & Loeb LLP is acting as legal counsel to Mountain Crest II.
- Cowen is acting as sole placement agent to Mountain Crest II on the PIPE.
- Shearman & Sterling LLP is acting as legal counsel to the placement.
MANAGEMENT & BOARD
Executive Officers
Suying Liu, 32
Chairman and Chief Executive Officer
Dr. Suying Liu has been the Chairman and Chief Executive Officer of Mountain Crest Acquisition Corp (Nasdaq: MCAC) since November 2019. He served as the Head of Corporate Strategy of Hudson Capital Inc. (Nasdaq: HUSN) between May 2020 and September 2020, where he led the company’s strategic development for both general operations and specific growth areas. Dr. Liu integrated corporate finance opportunities with business fundamentals of Hudson Capital, leveraging his as well as the company’s broad network of relationships across a variety of industries such as financial services, general industrials and real estate. Between November 2018 and April 2020, Dr. Liu served as the Chief Strategist of Mansion Capital LLC, a privately-held real estate investment firm with brokerage and property management operations serving clients from both North America and Asia for their investments in the U.S. real estate market. With extensive property transaction experience, Dr. Liu has a breadth of connections to operating businesses that incorporate tactical real estate considerations into their business development strategies. Prior to joining Mansion Capital, Dr. Liu was an investment strategist at J.P. Morgan Chase & Co. from July 2015 to October 2018. With a primary focus in commercial mortgages, Dr. Liu assessed the operational strength and financial health of a multitude of commercial real estate operators such as Starwood, Simon and Westfield, providing investment strategies to major Wall Street institutions spanning private equity, hedge funds and insurance companies. Dr. Liu began his career in academia, teaching a variety of degree programs from bachelor’s to executive education at Washington University Olin Business School between January 2013 and May 2015 while completing his doctoral studies, for which he received a PhD in finance in May 2015. Dr. Liu obtained a master’s in finance in December 2012 and his BA in economics and mathematics summa cum laude in May 2010 from Washington University in St. Louis.
Dong Liu, 35
Chief Financial Officer and Director
Mr. Dong Liu has been the Chief Financial Officer and Director of Mountain Crest Acquisition Corp (Nasdaq: MCAC) since November 2019. He has been the Chief Financial Officer of Dongguan Zhishang Photoelectric Technology Co., Ltd., a regional designer, manufacturer and distributor of LED lights serving commercial customers throughout Southern China since November 2016, at which time he led a syndicate of investments into the firm. Mr. Liu has since overseen the financials of Dongguan Zhishang as well as provided strategic guidance to its board of directors, advising on operational efficiency and cash flow performance. From March 2010 to October 2016, Mr. Liu was the Head of Finance at Feidiao Electrical Group Co., Ltd., a leading Chinese manufacturer of electrical outlets headquartered in Shanghai and with businesses in the greater China region as well as Europe.
Board of Directors
Nelson Haight, 55
Director
Mr. Haight has served as a member of the board of directors of Mountain Crest Acquisition Corp (Nasdaq: MCAC) since January 2020. A veteran in the oil and gas industry with over 30 years of professional experience, Mr. Haight currently serves as Senior Vice President, Chief Financial Officer and Treasurer for Key Energy Services, Inc., which he joined in June 2020. From September 2019 to June 2020, Mr. Haight was the interim Chief Financial Officer for Element Markets, LLC, an environmental commodities firm. From November 2018 to June 2019, Mr. Haight was the interim Chief Financial Officer for Epic Companies, LLC, a family office backed oilfield service company. Epic Companies filed for bankruptcy in August 2019. Between July 2017 and September 2018, Mr. Haight was the Chief Financial Officer of Castleton Resources, LLC, a privately held exploration and production company. From December 2011 to July 2017, Mr. Haight served in various capacities from Vice President to Chief Financial Officer at Midstates Petroleum Company, Inc., an exploration and production company founded in 1993 and focused on the application of modern drilling and completion techniques to oil/liquids-prone resources in previously discovered yet underdeveloped hydrocarbon trends. In 2015, Mr. Haight led the team that raised $625 million in new capital for Midstates Petroleum. Midstates Petroleum filed for Chapter 11 bankruptcy in April 2016, and Mr. Haight was instrumental in its successful reorganization and emergence from bankruptcy in October 2016. Mr. Haight received an MPA and BBA from the University of Texas at Austin in May 1988 and is a Certified Public Accountant and member of the American Institute of Certified Public Accountants.
Todd Milbourn, 51
Director
Mr. Milbourn has served as a member of the board of directors of Mountain Crest Acquisition Corp (Nasdaq: MCAC) since January 2020. Dr. Milbourn is the Vice Dean and Hubert C. and Dorothy R. Moog Professor of Finance at Washington University Olin Business School, where he has researched and built academic programs in the areas of corporate finance, executive compensation and credit ratings since June 2000. With expertise on valuation, corporate finance, corporate governance, executive compensation and corporate risk-taking, Dr. Milbourn has been retained as an expert by private firms as well as the U.S. Department of Justice in cases related to fair rates of return, breach of contract damages and executive compensation programs, among others. Dr. Milbourn is also the Director and Chair of the Audit Committee of the Xanthus Fund at Oppenheimer. Dr. Milbourn obtained his PhD in finance from Indiana University Kelly School of Business in December 1995 and BA in economics and mathematics from Augustana College in May 1991.
Wenhua Zhang, 50
Director
Mr. Zhang has served as a member of the board of directors of Mountain Crest Acquisition Corp (Nasdaq: MCAC) since January 2020. Mr. Zhang has been a Partner at Azia Capital Fund LP, a private investment firm, since October 2014. Mr. Zhang began his career in the financial industry as the Vice President of Equity Research in the technology, media and telecom sector with T. Rowe Price from August 2001 to May 2008, and later joined Bain Capital as Director of the Brookside Fund, a long short equity investments fund, between July 2008 and December 2010. From February 2011 to August 2012, Mr. Zhang was Senior Vice President and Portfolio Manager at Harvard Management Company, a wholly owned subsidiary of Harvard University charged with managing the university’s endowment assets, and then as Partner and Portfolio Manager at Newport Asia LLC between October 2012 and October 2014, investing in Asia’s high-growth companies on behalf of clients from institutions, endowments, and family offices. Mr. Zhang received an MBA with dual majors in finance and technology innovation from the Wharton School at the University of Pennsylvania in May 2001.