Atlantic Coastal Acquisition Corp. II (NASDAQ:ACAB), a special purpose acquisition company, has entered into significant agreements with Abpro Bio International Inc. and Celltrion, Inc. as part of a planned business combination with Abpro Corporation, a biological products firm. The agreements were signed on August 22, 2024, and disclosed in a recent SEC filing.
Under the terms, Abpro Bio will purchase 622,467 shares of Atlantic Coastal's Series A common stock at $10.00 per share, totaling $6,224,670. This transaction includes the forgiveness of $4,224,663.33 under a previous loan from Abpro Bio to Abpro Corporation. Additionally, Abpro Bio will receive 1,244,934 incentive shares previously earmarked for private investment in public equity (PIPE) financing.
Celltrion has also agreed to buy 500,000 shares of Series A common stock at the same share price, amounting to a $5 million investment. They will further receive 1,000,000 incentive shares. These PIPE shares will be exempt from the lock-up agreements typically entered at the closing of such business combinations.
The completion of these share purchases is contingent upon the successful closing of the business combination between Atlantic Coastal, Abpro Corporation, and Abpro Merger Sub Corp., initially announced on December 11, 2023. Atlantic Coastal has committed to filing a registration statement with the SEC within 30 days post-Closing to facilitate the resale of the PIPE shares.
Additionally, an Investor Rights Agreement with Celltrion grants them the right to nominate a director to the board of the surviving company after the merger.
The securities to be issued in connection with these PIPE Subscription Agreements will not be registered under the Securities Act of 1933, relying on exemptions from registration provided by law.
This strategic move precedes the anticipated business combination intended to expand Atlantic Coastal's presence in the biotechnology sector. The company aims to leverage the partnerships and expertise of Abpro Bio and Celltrion to enhance its market position following the merger. The information reported is based on a press release statement.
In other recent news, Atlantic Coastal Acquisition Corp. II has announced major developments. The company has extended its business combination deadline to September 19, 2024, providing more time to finalize its merger activities. This extension was filed with the Securities and Exchange Commission and is in accordance with the company's Amended and Restated Certificate of Incorporation.
Simultaneously, Atlantic Coastal has received a notice from the Nasdaq Stock Market for non-compliance with the exchange's continued listing standards, specifically failing to maintain the minimum requirement of 400 holders of record and/or beneficial owners for its primary equity securities.
The company now has a 45-day window to submit a plan to regain compliance. If accepted, Atlantic Coastal could be granted an additional 180 days to meet the minimum holders requirement.
These are the latest developments in the company's ongoing operations. As always, investors and stakeholders are encouraged to stay informed about Atlantic Coastal's progress towards its business combination goals and its efforts to regain compliance with Nasdaq's listing standards.
InvestingPro Insights
As Atlantic Coastal Acquisition Corp. II (NASDAQ:ACAB) navigates through its strategic business combinations, the financial landscape depicted by InvestingPro data and tips sheds light on its current market position. With a market capitalization of approximately $90.41 million, the company's valuation reflects its status in the biotechnology investment space. The InvestingPro data also reveals a challenging profitability outlook, indicated by a negative P/E ratio of about -67.27 over the last twelve months as of Q2 2024 and an operating income adjusted to approximately -$2.24 million in the same period. These financial metrics suggest that while Atlantic Coastal is making strategic moves, it is doing so in the context of recent financial performance that includes not being profitable over the past year.
InvestingPro Tips further highlight areas of financial caution, noting that the company suffers from weak gross profit margins and that its short-term obligations currently exceed its liquid assets. Additionally, the company is trading near its 52-week low, which could signal a potential undervaluation or a reflection of investor sentiment regarding its future prospects. Notably, Atlantic Coastal does not pay a dividend, which may influence the investment decisions of income-focused shareholders.
For investors considering a stake in Atlantic Coastal as it expands into the biotechnology sector, these insights may be critical. The full set of InvestingPro tips, which includes several additional tips, can provide further guidance for those looking to make an informed decision. Access to these comprehensive tips is available at https://www.investing.com/pro/ACABU.
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