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Mountain Crest Acquisition Corp. V *

Mountain Crest Acquisition Corp. V *

Oct 7, 2021 by sam.beattie

PROPOSED BUSINESS COMBINATION: CUBEBIO Co.

ENTERPRISE VALUE: $tbd million
ANTICIPATED SYMBOL: tbd

Mountain Crest Acquisition Corp. V proposes to combine with CUBEBIO Co.

CUBEBIO is an in-vitro diagnostic company that has developed a technology that can distinguish the presence of cancer in the body at an early stage by analyzing the concentration of specific metabolites in urine using urine that can be easily collected, with a focus on increasing the accessibility of cancer screening. CUBEBIO holds 37 Korean patents related to cancer diagnosis, based on which it has developed CEED-PG/PGS in addition to the pancreatic cancer diagnostic kit CEED-NOVUS-P and the multi-cancer detection kit CEED-NOVUS. Recently, through a KRW 20 billion or approximately $14.5 million contract with Taiwan Biotech Co., Ltd. to supply cancer screening products, CUBEBIO will exclusively supply its products to Taiwan, Vietnam, and Malaysia (the “Taiwan Biotech Contract”). CUBEBIO does not expect to generate revenues under the Taiwan Biotech Contract until CUBEBIO’s products are approved for sale in Taiwan, Vietnam, and Malaysia which may take up to 24 months or more. CUBEBIO is in the process of working on agreements to supply its cancer screening products in the United States and Japan.

EXTENSION – 11/12/24 – LINK

  • The SPAC approved the extension from November 16, 2024 to November 16, 2025.
    • 418,217 shares were redeemed.
    • No contribution will be made into the trust account.

TRANSACTION

  • Pursuant to the BCA, the pre-transaction equity value for CUBEBIO is $375 million based on the issuance of 37.5 million PubCo Ordinary Shares valued at $10 per share, subject to a potential earnout payment to the shareholders of CUBEBIO of an additional $245 million through the issuance of 24.5 million PubCo Ordinary Shares valued at $10 per share.
  • The parties expect the Business Combination to close in the first quarter of 2025.

SPAC FUNDING

  • The parties intend to enter into additional sources of financing prior to the Closing.

EARNOUT

  • Company
    • 24.5 million PubCo Ordinary Shares valued at $10 per share, can be earned based on PubCo’s audited financial statements for the fiscal year ending December 31, 2026.
      • PubCo shall have revenues during such fiscal year as reported on such financial statements in an amount equal to or greater than $42,700,000.

LOCK-UP

  • Company
    • The parties intend to enter into a lock-up prior to the Closing.
  • Sponsor
    • 50% at the earlier of six months or if the share price equals or exceeds $12.50 for 20/30 trading days
    • 50% six months from the Closing Date.

NOTABLE CONDITIONS TO CLOSING

  • A minimum cash condition was not specified.

NOTABLE CONDITIONS TO TERMINATION

  • By either SPAC or CUBEBIO, if the closing shall not have occurred by May 15, 2025,

ADVISORS

  • Company
    • Nelson Mullins Riley & Scarborough LLP is serving as legal counsel.
  • SPAC
    • Loeb & Loeb LLP is serving as legal counsel.

SUBSEQUENT EVENT – 5/2/24 – LINK

  • The SPAC and CUBEBIO Co., Ltd., a Korean company specializing in early-stage cancer diagnostics, announced a non-binding agreement for a merger aimed at taking CUBEBIO public on Nasdaq.
    • This transaction, which values CUBEBIO at approximately $620 million, could adjust based on further evaluations and market conditions.

EXTENSION – 8/22/23 – LINK

  • The SPAC approved the extension from November 16, 2023 to November 16, 2024.
    • 9,653 shares were redeemed.
    • $0.10/share per 3-months will be deposited into the trust account.

EXTENSION – 5/12/23 – LINK

  • The SPAC approved the extension from May 16, 2023 to February 16, 2024.
    • 1,405,134 shares were redeemed.
    • No contribution will be made into the trust account.

SUBSEQUENT EVENT – 2/13/23 – LINK

  • The Company will extend the Outside Date in the Business Combination Agreement from February 15, 2023 to May 15, 2023. 

EXTENSION – 12/21/22 – LINK

  • As approved by its stockholders at the special meeting of Stockholders held on December 20, 2022, Mountain Crest Acquisition Corp V entered into an amendment to extend the time for SPAC to complete its business combination for a period of 3 months from February 16, 2023, to May 16, 2023, and to the extent SPAC’s Amended and Restated Certificate of Incorporation is amended to extend the Business Combination Period, by depositing $300,000 into SPAC’s trust account.
  •  4,965,892 shares were tendered for redemption.

PROPOSED BUSINESS COMBINATION: AUM Biosciences Pte. Ltd. [TERMINATED]

ENTERPRISE VALUE: TBD
ANTICIPATED SYMBOL: tbd

Mountain Crest Acquisition Corp. V proposes to combine with AUM Biosciences Pte. Ltd., a clinical-stage biotechnology company, advancing a clinical stage pipeline designed to deploy multi-faceted inhibition strategies to reverse cancer resistance.

  • AUM is advancing a broad portfolio of precision oncology therapeutics. AUM001 is a selective and synergistic MNK inhibitor as shown in current studies and expected to begin Phase 2 enrollment in the fourth quarter 2022.
  • AUM601 is a promising therapy for TRK fusions and mutations within the kinase domain and is on track to enter Phase 2 planning.
  • AUM302 is a potentially first-in-class macrocyclic oral kinase inhibitor rationally designed small molecule to uniquely combine pan-PIM kinase, pan-PI3K and mTOR inhibition in a single agent. Comprised of pharma industry veterans with decades of research and development experience, the AUM leadership has an extensive track record of selecting distinctive early-stage assets, successfully exiting virtual biotech models, and has contributed to over 50 INDs and over 150 oncology clinical trials, and development of several currently marketed oncology treatments with annual peak sales up to $3 billion.

TRANSACTION

  • The transaction reflects a pre-money equity value of $400 million for AUM Biosciences
  • As part of the transaction:
    • (i) all outstanding AUM shares will be canceled in exchange for approximately 40 million Holdco ordinary shares valued at $10 per Holdco share, subject to closing adjustments,
    • (ii) each outstanding Mountain Crest unit will be automatically detached, (iii) each unredeemed outstanding share of Mountain Crest common stock will be canceled in exchange for the right to receive 1 Holdco ordinary share,
    • (iv) every 10 outstanding Mountain Crest rights will be canceled and cease to exist in exchange for 1 Holdco ordinary share.
  • Mountain Crest has not issued any warrants. The transaction is expected to provide approximately $69 million of cash held in Mountain Crest’s trust account, assuming no redemptions.

STOCK PURCHASE AGREEMENT

  • The Sponsor and the Company entered into a stock purchase agreement, pursuant to which the Company purchased 100,000 shares of SPAC Common Stock from the Sponsor for a purchase price of $1,000,000.
  • Subject to the satisfaction of conditions set forth in the Stock Purchase Agreement, the Sponsor shall cause the SPAC Shares to be transferred to the Company upon the Closing of the business combination.

LOCK-UP

Company:

  • The Company has agreed that it will cause certain shareholders representing at least 93% of outstanding Company Shares, which amount shall include all shareholders owning greater than 1% of Company Shares, to enter into a Lock-Up Agreement with Holdco to be effective at the Closing, pursuant to which the securities of Holdco held by such shareholders will be locked-up for a period of time following the Closing.
  • The securities held by such shareholders will be locked-up until the six-month anniversary of the date of the Closing, during which time 50% of such securities shall be subject to early release if the closing price of the shares equals or exceeds $12.50 per share for any 20 trading days within any 30 trading day period following the Closing.

Sponsor:

  • Founder shares will be locked up for a period of 12 months following the business combination or until a VWAP of $12.00 for any 20 trading days within any 30 trading day period following the Closing.

NOTABLE CONDITIONS TO CLOSING

  • The obligations of the parties to consummate the Transactions are subject to SPAC having a minimum of $5,000,001 of net tangible assets on its pro forma consolidated balance sheet after giving effect to the Closing.

NOTABLE CONDITIONS TO TERMINATION

  • The Business Combination Agreement contains certain termination rights, including if the Closing has not occurred on or before February 15, 2023 (the “Outside Date”).
    • The Company will extend the Outside Date in the Business Combination Agreement from February 15, 2023 to May 15, 2023. – LINK
  • In the event of the termination of the Business Combination Agreement by SPAC for any reason and provided the Company is not in material breach of the Business Combination Agreement, SPAC shall be obligated to pay the Company a break-up fee of $1,750,000 (the “Break-up Fee”), within 5 Business Days after the termination of the Business Combination Agreement by SPAC.
  • Or by written notice from the Company or SPAC to the other if any Governmental Authority shall have enacted or entered any Governmental Order which has become final and non-appealable and prevents or prohibits the consummation of the Transactions.

ADVISORS

  • Global Fund LLC is acting as M&A advisor to AUM.
  • DLA Piper LLP (US) is serving as legal counsel to AUM.
  • Loeb & Loeb LLP is serving as legal counsel to Mountain Crest.

MANAGEMENT & BOARD

Executive Officers

Suying Liu, 33
Chairman, Chief Executive Officer, and Chief Financial Officer

Mr. Liu has been the Chairman and Chief Executive Officer of Mountain Crest Acquisition Corp. II (Nasdaq: MCAD) since July 2020. He has been serving as the Chairman, Chief Executive Officer, and Chief Financial Officer of Mountain Crest Acquisition Corp. III (Nasdaq: MCAE) since March 2021. He also has been serving as the Chairman, Chief Executive Officer, and Chief Financial Officer of Mountain Crest Acquisition Corp. IV (Nasdaq: MCAF) since March 2021. Dr. Liu was a director of PLBY Group, Inc. (Nasdaq: PLBY) from the closing of its business combination with Mountain Crest Acquisition Corp (Nasdaq: MCAC) in February 2021 until August 2021. He was the Chairman and Chief Executive Officer of Mountain Crest Acquisition Corp from November 2019 until it closed its business combination with PLBY Group, Inc. 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. 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. Prior to joining Mansion Capital, Dr. Liu was an investment strategist at J.P. Morgan Chase & Co. from July 2015 to October 2018, providing investment strategies to major Wall Street institutions spanning private equity, hedge funds and insurance companies, with a primary focus in commercial mortgages. 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.

Board of Directors

Nelson Haight, 56
Director

Mr. Haight served as a member of the board of directors of Mountain Crest Acquisition Corp (Nasdaq: MCAC) from January 2020 to February 2021, and has been serving as a member of the board of directors of Mountain Crest Acquisition Corp. II (Nasdaq: MCAD) since October 2020. He has been serving as a member of the board of directors of Mountain Crest Acquisition Corp. III (Nasdaq: MCAE) since March 2021. He has also been serving as a member of the board of directors of Mountain Crest Acquisition Corp. IV (Nasdaq: MCAF) since March 2021. 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, 52
Director

Mr. Milbourn served as a member of the board of directors of Mountain Crest Acquisition Corp (Nasdaq: MCAC) from January 2020 to February 2021, and has been serving as a member of the board of directors of Mountain Crest Acquisition Corp. II (Nasdaq: MCAD) since October 2020. He has been serving as a member of the board of directors of Mountain Crest Acquisition Corp. III (Nasdaq: MCAE) since March 2021. He has also been serving as a member of the board of directors of Mountain Crest Acquisition Corp. IV (Nasdaq: MCAF) since March 2021. 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, 51
Director

Mr. Zhang served as a member of the board of directors of Mountain Crest Acquisition Corp (Nasdaq: MCAC) from January 2020 to February 2021, and has been serving as a member of the board of directors of Mountain Crest Acquisition Corp. II (Nasdaq: MCAD) since October 2020. He has been serving as a member of the board of directors of Mountain Crest Acquisition Corp. III (Nasdaq: MCAE) since March 2021. He has also been serving as a member of the board of directors of Mountain Crest Acquisition Corp. IV (Nasdaq: MCAF) since March 2021. 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.

 

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