Redwoods Acquisition Corp., a publicly traded special purpose acquisition company, or SPAC, and ANEW MEDICAL, Inc., an early-stage biotechnology company focused on developing disruptive new therapies to treat neurodegenerative diseases, have entered into a definitive merger agreement. ANEW MEDICAL, Inc. is a company that focuses on developing disruptive new therapies to treat neurodegenerative diseases. At this time, ANEW’s common stock may be seen being traded on the OTC Markets under the ticker “LEAS.”
Existing ANEW investors will have the opportunity to roll over 100% of their shares into the merged business as part of this transaction, which will result in the combined company having a pro forma enterprise value of approximately US$94.0 million (assuming there will be no redemptions). Following the completion of the deal, ANEW investors will be able to receive additional shares as part of an earn-out based on the performance of the merged company’s stock.
In the event that Redwoods stockholders do not exercise their option to redeem their shares, the transaction is anticipated to result in cash proceeds of roughly US$54 million. These prices do not take into account the possibility that ANEW stockholders might receive up to five million extra earn-out shares in the event that certain stock performance-based conditions are satisfied. Following the conclusion of the deal, the merged business will do business under the name ANEW MEDICAL and intends to maintain its listing on NASDAQ.
ANEW is committed to achieving the potential of gene therapies to give revolutionary patient outcomes in areas of high unmet medical need and to expanding the reach of gene therapies to highly prevalent neurodegenerative illnesses. These goals will be accomplished through a combination of research, development, and commercialization efforts.
The company has created a core team with vast expertise in the areas of gene therapy, medication development, and commercialization, and has compiled a portfolio of gene treatments in conjunction with major scientific institutions. In the beginning, ANEW will concentrate its efforts on advancing gene therapy approaches that are based on alpha Klotho for the treatment of ALS, Alzheimer’s disease, and Parkinson’s disease.
“ANEW is focused on developing disruptive new gene therapies to alleviate and/or reverse the progression of devastating neurodegenerative diseases,” Dr. Joseph Sinkule, CEO and Founder of ANEW, said in response to the signing of the agreement, which he considered to be a positive development. We are ecstatic to have reached this significant milestone, and we are confident that doing so will be of tremendous assistance to the accomplishment of our company’s purpose.
The listing on NASDAQ and the cooperation with Redwoods provide an ideal approach to generate additional funds and finance our strategic ambitions moving ahead in the future. The management of ANEW is looking forward to the next several years, during which product development and commercialization will take place, to the creation of considerable shareholder value.
Mr. Jiande Chen, the CEO of Redwoods, expressed his excitement about the planned merger with ANEW. “We are delighted to announce the proposed merger with ANEW,” he stated. “Our board of directors and management team feel that this deal with ANEW provides the best chance to produce considerable value for our investors. We reached this conclusion after engaging in a detailed process with external consultants to investigate and assess a large number of possible business combination partners.
If this corporate merger goes through as planned, the investors of Redwoods will be able to purchase a stake in the equity of a corporation that is dedicated to the research, development, and commercialization of potentially transformative gene treatments in order to enhance the quality of life for patients suffering from neurodegenerative illnesses. We are happy to be able to assist ANEW in its move to become a public company and to make it possible for ANEW to quickly reach its development objectives.
The pro forma enterprise value of the merged firm is up to 94 million U.S. dollars. This valuation takes into account cash reserves of up to 54 million U.S. dollars held in a trust account by Redwoods, which are subject to redemption by Redwoods investors. These prices do not take into account the possibility that ANEW stockholders might receive up to 5 million extra earn-out shares in the event that certain stock performance-based conditions are satisfied.
The transaction, which has been unanimously authorized by the boards of directors of both ANEW and Redwoods, is subject to approval by the stockholders of each company, in addition to the satisfaction of any other criteria that must be met before the deal can be finalized. The proposed corporate merger assumes that ANEW’s stockholders will roll 100% of their equity into the merged company and will be eligible to acquire additional shares in accordance with an earn-out depending on the future stock performance of the combined company. In addition, the stockholders will be entitled to vote on the proposed merger.
It is anticipated that the merged business will put any residual cash on its balance sheet at the time of the conclusion of the deal, following the payment of transaction-related expenditures, to use for working capital, expansion, and other general corporate purposes. It is anticipated that the planned corporate combination would be finalized sometime during the fourth quarter of 2023.