SPAC extends deadline to merge — again; Flagship's Evelo borrows $45M to refinance debt
A SPAC deal announced in August may need a bit more time to dot all the i’s and cross all the t’s.
Ocean Biomedical and its blank check partner, Aesther Healthcare Acquisition Corp., extended the deadline to wrap their merger talks by three months, they said Friday. The two entities will now have until March 16, 2023, to merge and bring Ocean to Nasdaq.
This is the second time Aesther and Ocean have extended their merger deadline, and it’s the last time they’ll be able to do so. Should they be unable to finish their discussions and put together the requisite raise, the SPAC will have to return its money to investors.
The merger has proven emblematic of the 2022 biotech bear market, as Ocean was one of several candidates Aesther sought to combine with. Talks previously fell apart with at least three potential partners, including an electric vehicle parts maker, before Ocean and Aesther agreed to reverse-merge.
Flagship biotech refinances debt
A Flagship-founded biotech is looking to secure more cash through a loan.
Evelo Biosciences is borrowing $45 million from Horizon Technology Finance Corporation, the company announced Friday, in order to refinance its existing debt that would have started affecting its balance sheet next March. The new loan allows Evelo to only pay interest for three years on most of the new loan, before a two-year period where it would have to repay the rest.
$35 million of the total $45 million will be subject to this, while the remaining $10 million will be repaid on Jan. 1, 2028, when the loan matures, according to SEC filings.
The outstanding loan balance will also be charged interest at one of two rates. It can be charged at 11% interest, or it can be charged at whatever the Wall Street Journal’s “Prime Rate” plus “Loan Rate Spread” is listed as, whichever is higher.
Evelo also “repaid in full all outstanding indebtedness” to its previous lender, K2 HealthVentures.