This morning, we had another new SPAC filing with the addition of Fellazo Inc. (FLLCU), a $50 million SPAC IPO focused on health food and supplements in Asia. Fellazo will be led by Nicholas Ting Lun Wong, who is currently a director of Shanghai Linxin Food and Beverage Management Ltd.
Looking at this SPAC’s structure, there are a few changes to the terms we usually see in Asia-focused SPACs. Namely, there is no Right included in the Unit and the amount the sponsor will contribute to trust for each 3-month extension has been reduced from $0.10 per extension to $0.075. Fellazo will be allowed to extended up to three separate times, which means if they need to use all three extensions the total amount contributed to trust will be $0.225, rather than $0.30.
Regarding the removal of a Right from the Unit, Fellazo is instead offering a full Warrant rather than the usual 1 Warrant for 1/2 share. However, we do still see a $16.50 warrant call trigger, which is typical for the smaller Asia-focused deals, but still lower than the $18.00 found in most SPACs.
In total, is the reduction in the extension contribution significant enough to turn off SPAC investors? Well, it’s definitely going to be a conversation point. Usually you need a strong team when a change in terms is considered “unfavorable” to investors by making the case that the team’s deal-making abilities supercede any potentially less attractive returns. However, the Fellazo team’s strength feels about the same level as the other SPACs of this size and focus (not much deal-making capability, but are well-connected), hence, there is most likely going to be pushback. However, $50 million is a small enough size that this deal should get sold even if they lose a few of the typical SPAC players. The trade-off being, it might not trade that well.
Summary of terms below:
At the SPAC of Dawn After a tepid month for SPAC activity in April, prominent teams are already scheduling things to make for some fireworks in early May. AltC (NYSE:ALCC) has already been turning heads as being the rare SPAC to trade significantly above trust value before close, and it has now booked the completion...
At the SPAC of Dawn There are signs that the macro environment for SPACs is gradually improving, but the Screaming Eagle team yesterday announced a non-redemption agreement for its combination with Lionsgate Studios. Such agreements are generally a lever one pulls when a SPAC expects a potentially turbulent closing. All in all, the terms for...
Israeli tech firms have made up an outsized proportion of SPAC activity and despite the ongoing tensions in its region, that dealmaking is continuing unabated. In fact, the SPAC named for the particular mission of taking Israeli firms public through SPACs, Israel Acquisition Corp. (NASDAQ:ISRL) in fact just took one step closer in completing that...
At the SPAC of Dawn Although the market has largely recovered from a negative stretch last week, the roller coaster is tilted back downward for Trump Media (NASDAQ:DJT), which slid -8% yesterday to $32.57 – one of its lowest points since closing with Digital World last month. Other SPACs and de-SPACs are having a more...
Remember the metaverse? Many do not. Meta’s (NASDAQ:META) attempted transition to virtually living and working seemed to mark a trend that went up and down quickly, but one SPAC deal has both survived that roller coaster and may rise with a second. Back in December 2022, Newbury Street (NASDAQ:NBST) announced a $1.85 billion combination with...