The Morning SPAC Update (Jun 28, 2024) 🔒

SPAC & De-SPAC Daily Trading (prev. session)

SPAC Gainers & Losers

SPAC Volume Leaders

De-SPAC Gainers & Losers

De-SPACs listed from 2019- in descending order with the 3 Gainers followed by the 3 Losers

News

Canna-Global ($CNGL) has set into motion the latest scandal that has evoked spirited reactions through the SPAC community.

Here is the high-level overview as we see it and per this report filed by CNGL yesterday:

CNGL and EF Hutton executed an agreement in which CNGL retired the $8.05M deferred underwriting fee it owed to EF Hutton in connection with its IPO. EF Hutton sold the debt to a hedge fund called Liqueous for $1.25M.

In exchange, CNGL agreed to issue Liqueous 1,544,531 new shares at a future date, as the charter did not permit the issuance of additional shares until the closing of a business combination (of course, this is a SPAC…).

Liqueous submitted the agreement and legal opinion to CNGL's transfer agent, Continental, and somehow was able to sell 724,000 of the shares, supposedly set for future issuance, into the market. These were unregistered shares that were sold into the market, effectively becoming public shares and diluting the trust for existing shareholders.

CNGL held a snap meeting, without any filing or notice to public shareholders, supposedly with 84% of the shareholders approving the amended charter. Following the approval, CNGL issued the remaining 829,531 shares instead of the planned future issuance after the merger closing.

Shareholders affected who either bought shares at the IPO or in the open market have been diluted by 40% with the 724,000 share sale and could be diluted further, assuming the remaining 829,531 shares are sold or were already sold.

As these shares were unregistered, this should not have been able to happen, and it could potentially be fraudulent activity. Beyond the SPAC, Canna-Global, the underwriter, EF Hutton, and the hedge fund that sold the unregistered shares, Liqueous, there are other capital markets parties that either erred in allowing this to occur or at the least should work to remedy this. Namely: the trust and transfer agent, Continental, the trade clearing and settling agent, DTCC, and the exchange, Nasdaq.

CNGL shares are now halted, with hopes for investigation and resolution. If unaddressed, this threatens the integrity of SPAC investments, undermining their perceived risk-free nature.

For more information, refer to this X (formerly Twitter) post. If you're a CNGL shareholder, you can add your username to this X post to be included in a potential class action lawsuit or send your name and email to us, and I will forward it to the organizer.

If you purchased shares yesterday, contact your broker to request trade invalidation due to the shares being unregistered. Additionally, email Nasdaq, DTCC, and Continental urging them to investigate and keep CNGL shares halted until resolved. See the list of email addresses to which to send the email here.

De-SPAC Updates

• GRIID Infrastructure ($GRDI) announced it will be acquired by CleanSpark ($CLSK) in an all-stock deal that values GRIID at a $155M enterprise value. — PR

• Benson Hill ($BHIL) confirmed receipt of a preliminary, non-binding indication of interest from Argonautic Ventures to acquire the company for $0.2236 per share in cash. — PR

• Chijet Motor ($CJET) was approved to effect a 1-for-30 reverse stock split. — PR

• Jet.AI ($JTAI) announced the commencement of its warrant exchange offer to receive 0.3054 shares per redeemable warrant and 1.0133 shares per merger consideration warrant. — PR

The Deals

1) Arogo Capital ($AOGO) & Ayurcann (OTC: AYURF) — PR

• Target Details:

  • HQ: Canada

  • Description: Ayurcann is focused on its operational expertise and gaining market share in every product category, and its management team believes that Ayurcann’s strong market share capture is driven by the quality and reputation of its brands. By continuously providing high-quality products, innovations and value that complement our current market offerings, Ayurcann continues to look for opportunities to increase revenue.

• Valuation: $210M Pro-forma enterprise value

SPAC Updates

Liquidations / Terminations

• Denali Capital ($DECA) & Longevity Biomedical mutually terminated the BCA. According to the report, the parties plan to "seek alternative ways to consummate an initial business combination". — SF

Deal Updates

• Ault Disruptive ($ADRT) & Gresham Worldwide filed the BCA for the deal. — SF

• Bayview ($BAYA) & Oabay amended the BCA to revise the earnout milestones. — SF

• AIB ($AIB) & PSI Group reported that PS International is entitled to terminate the merger if AIB is delisted from Nasdaq for 60 days. AIB was suspended by Nasdaq on May 9 and will be officially delisted 10 days after June 28. PS International doesn't intend to waive the ability to terminate, but according to the report the parties intend to close the merger before the 60-day period expires. — SF

• ExcelFin ($XFIN) & Baird Medical filed an updated investor presentation. — SF

Extensions

• Breeze (BREZ: currently delisted) was approved to extend up to Dec 2024. ~23% of the public SPAC shares were redeemed. Remaining in trust: ~$10.4M / 893,712 shares. — SF

• Trailblazer Merger I ($TBMC) used its 2nd of 2 3-month extensions to extend to Sep 30. — SF

Listings

New Issues: IPOs, New S-1s

IPOs

• Graf Global ($GRAF-U) closed its $230M IPO including the full greenshoe exercise. — PR 

Filings

• AA Mission Acquisition Corp. (AAM) — S-1

  • $300M, 1/2 Warrant

  • Focus: Asia

  • UW: Clear Street

Listing Warnings / Transfers:

• Corner Growth (COOL: currently delisted) which was suspended by Nasdaq due to non-compliance with listing rules intends to list OTC under the same symbol, COOL. — SF

• ShoulderUP Technology ($SUAC) began trading OTC under the same symbol, SUAC. — SF

• Iris ($IRAA) granted continued listing until Sep 3. — SF 

Key Filings

Extensions:

• Alpha Star ($ALSA) — DEF

• Hudson I ($HUDA) — DEF

S-4 Filings*:

• InFinT ($IFIN) & Seamless Group — S-4/A

Post-Merger S-1 Filings**:

• Montana Technologies ($AIRJ) — S-1/A

• NKGen Biotech, Inc. ($NKGN) — S-1/A

*Latest S-4 filings are found in the “Deal Details” view under the column “S-4 Link”

**including PIPE resale registrations where applicable — latest post-merger S-1 filings are found in the “De-SPAC" view under the column “Post-Close S-1”

Key Event Calendar:

See the full calendar with proxy links and view it in a sortable table form here.