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Alpha Healthcare Acquisition Corp. III (NASDAQ:ALPA) ("ALPA"), a special purpose acquisition company led by Mr. Rajiv Shukla, today announced the execution of a non-binding letter of intent (the "LOI") to acquire a commercial stage regenerative medicine company (the "Target") conditioned upon the closing of ALPA's initial business combination with Carmell Therapeutics Corporation, a Phase 2 stage regenerative medicine platform company developing allogeneic plasma-based biomaterials for active soft tissue repair, aesthetics and orthopedic indications ("Carmell").
ALPA has set a Stockholders Meeting (the "Meeting") to consider the previously announced business combination with Carmell for July 11, 2023 at 11 am EST. Stockholders of record as of June 20, 2023 (the "Record Date") are eligible to vote at the Meeting with a redemption deadline of July 7, 2023. If the proposals at the Meeting are approved, the parties anticipate that the business combination will close shortly thereafter, subject to the satisfaction of all other closing conditions. Upon closing, the combined company will be renamed Carmell Therapeutics Corporation and the common stock is expected to be listed on the Nasdaq Capital Market under the ticker symbol "CTCX". Mr. Shukla will serve as Executive Chairman and Mr. Randy Hubbell will serve as Chief Executive Officer of the combined company.
The Target manufactures and develops human allograft products for active soft tissue repair, aesthetics and orthopedic indications. The Target's marketed products meet all criteria for regulation under section 361 of the PHS Act and 21 CFR part 1271 as affirmed by the FDA Tissue Reference Group (TRG). As of March 31, 2023, the Target had achieved approximately $50 million in unaudited trailing twelve month ("TTM") net revenue and approximately $5 million in unaudited TTM EBITDA from the sales of its products. During the second quarter of 2023, two of the Target's products were added to CMS Part B Drug and Biological Average Sales Price pricing files and the Target became a preferred vendor via a national pricing contract with one of the top 3 largest group purchasing organizations serving over 1,500 hospitals in the United States.
Per the terms of the LOI, the Target's shareholders will receive $65 million in Initial Equity Value (structured as $8 million in cash and $57 million in CTCX stock at Closing), plus up to $75 million in Milestone Equity Payments (structured as 12% cash and 88% in CTCX stock) linked with the achievement of revenue and business milestones. The Target's shareholders will be locked up for 12 months following closing.
The transaction is subject to completion of due diligence, customary documentation, shareholder approval and other customary conditions. The transaction is expected to close in the second half of 2023. Upon closing of the transaction, the Target would operate as wholly owned subsidiary of the Combined Company.
Posted In: ALPA
