In a significant financial move, RF Acquisition Corp., a special purpose acquisition company (SPAC), has entered into a convertible note purchase agreement, securing $20 million in funding from accredited investors. This transaction is aimed at supporting the company's merger plans with GCL Global Holdings Ltd.
The agreement, which took place between September 30 and October 7, 2024, involves the issuance of convertible notes by RF Acquisition Corp.'s subsidiary, Epicsoft Asia Pte. Ltd., to various investors. These notes are set to convert into ordinary shares that would be exchanged for shares in the post-merger entity at the closing of the business combination.
An interesting feature of this financial arrangement is the inclusion of Bonus Shares, which will be held in escrow for three years following the conversion. Depending on the performance of the share price, investors may be entitled to additional shares or a cash payout.
The transaction comes with certain conditions, such as a minimum funding requirement of $20 million and a stipulation that the merger must be completed by March 28, 2025. Additionally, the agreement specifies that if the merger's share exchange ratio falls below $10.00 per share, investors will receive 110% of the outstanding principal balance of the notes.
This strategic move by RF Acquisition Corp. is part of the company's efforts to meet its obligations under the previously announced merger agreement with GCL Global Holdings Ltd. The merger is subject to customary closing conditions, including shareholder and regulatory approvals.
In other recent news, RF Acquisition Corp., a blank check company, has announced an extension to its merger agreement deadline with GCL Global Holdings Ltd. The deadline for completion of their business combination has been extended to March 28, 2024, as part of the company's ongoing efforts to finalize the merger process. The amendment to the agreement stipulates that GCL Global will cover up to $500,000 in extension fees and other related expenses by RF Acquisition Corp. The companies have been working towards a merger since late 2023 and this latest amendment signifies a continued commitment to the process.
RF Acquisition Corp. also recently secured approval from its stockholders to extend the deadline for completing a business combination. The deadline was moved from September 2024 to March 2025, following a special meeting where stockholders voted in favor of the amendment. As part of this amendment, RF Acquisition Corp. will deposit $0.03 into the trust account for each share of Class A common stock not redeemed in connection with the extension.
InvestingPro Insights
RF Acquisition Corp.'s recent $20 million funding agreement through convertible notes aligns with several key financial indicators and trends highlighted by InvestingPro. The company's market capitalization stands at $65.35 million, reflecting its current valuation as a SPAC preparing for a merger.
InvestingPro Tips reveal that RF Acquisition Corp. has been aggressively buying back shares, which could be seen as a strategic move to enhance shareholder value ahead of the planned merger with GCL Global Holdings Ltd. Additionally, the stock is trading near its 52-week high, with a price at 94.32% of its peak, indicating investor optimism surrounding the company's prospects.
It's worth noting that the company is not currently profitable, with a negative P/E ratio of -124.31 over the last twelve months as of Q2 2024. This is not unusual for SPACs pre-merger, as they typically do not have operational businesses. The upcoming merger may change this financial picture significantly.
For investors seeking a more comprehensive analysis, InvestingPro offers 6 additional tips that could provide deeper insights into RF Acquisition Corp.'s financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.