ANEW MEDICAL, INC., an early-stage biotechnology company focused on developing disruptive new therapies to treat neurodegenerative diseases, announced today that it has entered into a definitive merger agreement with Redwoods Acquisition Corp. (NASDAQ: RWOD), a publicly traded special purpose acquisition company, or SPAC. ANEW currently has its common stock quoted on the OTC Markets under the symbol “LEAS”.
The transaction values the combined company at a pro forma enterprise value of approximately US$94.0 million (assuming no redemptions) with existing ANEW stockholders rolling over 100% of their equity into the combined company. ANEW stockholders will be eligible to receive additional shares pursuant to an earn-out based on the combined company’s stock performance following the closing of the transaction. The transaction is expected to provide approximately US$54 million of cash proceeds, assuming no redemptions by Redwoods stockholders. These values exclude up to five million of additional earn-out shares that would be issued to ANEW stockholders if applicable stock performance-based requirements are met. Upon completion of the transaction, the combined company will operate as ANEW MEDICAL and expects to remain listed on NASDAQ.
ANEW is dedicated to realizing the potential of gene therapies to offer transformative patient outcomes in areas of high unmet medical need and extending the reach of gene therapies to highly prevalent neurodegenerative disorders. The Company has assembled a portfolio of gene therapies in partnership with leading scientific institutions and has built a core team with extensive experience in the gene therapy, drug development, and commercialization space. ANEW is initially focused on progressing programs that include alpha Klotho-based gene therapies for ALS, Alzheimer’s disease, and Parkinson’s disease.
Management Comments
Dr. Joseph Sinkule, CEO and Founder of ANEW, welcomed the signing of the agreement, saying, “ANEW is focused on developing disruptive new gene therapies to alleviate and/or reverse the progression of devastating neurodegenerative diseases. We are thrilled to be reaching this important milestone and we believe it will be incredibly beneficial for our mission as a company. The partnership with Redwoods as well as the listing on NASDAQ constitute an ideal pathway to raise additional capital and fund our strategic initiatives going forward. ANEW management looks forward to creating significant shareholder value over the next several years of product development and commercialization.”
“We are delighted to announce the proposed merger with ANEW,” said Mr. Jiande Chen, CEO of Redwoods. “After undertaking a comprehensive process with external advisors to explore and evaluate numerous potential business combination partners, our board and management team believe this transaction with ANEW represents the best opportunity to create substantial value for our stockholders. This business combination, if completed, will result in Redwoods investors having an equity stake in a company that is focused on developing and commercializing potentially disruptive gene therapies to improve the lives of patients with neurodegenerative diseases. We are thrilled to support ANEW in its transition to a public company and to provide an avenue for ANEW to expeditiously meet its development milestones.”
Key transaction terms
The pro forma enterprise value of the combined company is up to US$94 million, which includes up to US$54 of cash held in the trust account of Redwoods, which is subject to redemption by Redwoods stockholders. These values exclude up to 5 million of additional earn-out shares that would be issued to ANEW stockholders if applicable stock performance-based requirements are met. The transaction, which has been unanimously approved by the boards of directors of ANEW and Redwoods, is subject to approval by their respective stockholders and other closing conditions. The proposed business combination contemplates that ANEW’s stockholders will roll 100% of their equity into the combined company and will be eligible to receive additional shares pursuant to an earn-out based on the combined company’s future stock performance.
All cash remaining on the combined company’s balance sheet at the closing of the transaction, after the settlement of transaction-related expenses, is expected to be utilized by the combined company for working capital, growth, and other general corporate purposes. The proposed business combination is expected to be completed by the fourth quarter of 2023.
A more detailed description of the transaction terms and a copy of the definitive merger agreement will be included in a Current Report on Form 8-K to be filed by Redwoods with the United States Securities and Exchange Commission (the “SEC”) and available at www.sec.gov.
Advisors
Chardan is acting as M&A and capital markets advisor to ANEW. Cyruli Shanks & Zizmor, LLP is acting as legal counsel to ANEW. Loeb & Loeb LLP is acting as legal counsel to Redwoods.
About ANEW
ANEW is a Wyoming corporation with a primary focus on developing disruptive new therapies to alleviate and/or reverse the progression of neurodegenerative diseases through the use of cell and gene therapy. ANEW has assembled a team of highly experienced pharmaceutical professionals and has licensed technologies that are essential and life-saving. Deploying the cell and gene therapy that integrates a proprietary gene splice variant called secreted klotho (s-KL) and delivery of the gene construct to the cytoplasm of cells using an adeno-associated virus (AAV) serotype 9 that concentrates the expressed protein in the central nervous system (CNS) and another AAV9 that has been shown to concentrate in muscle tissue.
About Redwoods
Redwoods Acquisition Corp. (NASDAQ: RWOD; “Redwoods”) is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities.
