SEC Initiates Second SPAC Crackdown

The Daily Dish (09/28/21)

SEC is Expanding its Crackdown on SPACs 

The US Securities and Exchange Commission is beginning a second crackdown on SPACs and is now looking into SPAC equity accounting treatment. SEC staff have privately told auditors of SPACs that ‘redeemable’ shares issued must be treated as temporary (known as ‘mezzanine’ equity) in a break from the long-standing industry practice of treating them as permanent equity.

The change will cause most SPACs to fall below the minimum equity capital requirement on Nasdaq’s Capital Market tier, pushing SPACs looking to list onto the Nasdaq Global Market tier, which has no equity requirement.

The development marks the second time the SEC has tightened SPAC accounting guidance. Back in April, the SEC had issued guidance that SPACs should account for equity warrants as debt, putting a damper on the market.

The new wave of regulations is in line with SEC Chairman Gary Gensler’s view on SPACs, who recently stated that SPACs can hurt investors as they are incentivized to find bad deals.

Exosuit Vendor Completes SPAC Listing, Targeting 2022 Commercial Launch

Commercial Exosuits are now one step closer to reality as Exosuit maker Sarcos Robotics completed a successful SPAC merger. Sarcos Robotics completed its Nasdaq Listing yesterday after a successful SPAC merger with Rotor Acquisition Corp. The merger provides Sarcos with $260 million in funding to roll out its exosuits, which will allow workers to lift heavy loads for logistics and manufacturing.

Sarcos, which was previously a subsidiary of Raytheon Corp, believes that the funding prevents dilution while ensuring that it meets its goal of a commercial launch by the end of 2022.

Sarcos believes that its technology could enable logistics and warehousing companies to bridge the gap between manual and assisted lifting activities. Most delivery companies handle the challenge of heavy goods by assigning teams of works to lift the product, raising the risk of workplace injuries and fulfillment delays.

Sarcos believes that by combining the judgment and physical flexibility of a human warehouse worker with the power of robotics, they can easily lift goods up to 200 pounds.

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Proterra Announces Redemption of Public Warrants and Private Placement Warrants 

Proterra announced that It would redeem all of its public and private warrants dated as of June 14, 2021, for a redemption price of $0.1 per warrant.

Largest EV Company Valuation Comparison 

Jasper Therapeutics Shares Drop 19% on Debut

Jasper Therapeutics, which made its Wall Street Debut yesterday through a SPAC merger with Amplitude Healthcare Acquisition Corp, saw shares drop 19%.

Investors were disappointed that the deal raised substantially less than first expected as the Redwood City Based company announced that it had proceeds of $107 million compared to an estimated cash injection of $200 million when the merger was announced.

An overwhelming majority of Shareholders of Amplitude Healthcare (93%), choose to redeem shares instead of funding the merger, resulting in a shortfall.

Jasper was found in 2018 and specializes in the development of antibodies that can help in bone marrow transplants. Jasper had raised $42 million in seed and Series A funding before going public through a SPAC deal.

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