DEF 14A: Bellevue Life Sciences Acquisition Corp. Seeks Extension to Complete Business Combination, Proposes Amendment to Remove NTA Requirement

Bellevue Life Sciences Acquisition Corp. is seeking stockholder approval to extend the deadline for completing a business combination and to remove a net tangible asset requirement from its charter.

Summary

• Bellevue Life Sciences Acquisition Corp. is holding an annual meeting on November 12, 2024, to vote on several proposals.
• The primary proposals include extending the deadline to complete an initial business combination from November 14, 2024, to February 14, 2025, and removing the net tangible asset (NTA) requirement from the company's charter.
• The company has signed an Amended and Restated Business Combination Agreement with OSR Holdings Co., Ltd., but believes more time is needed to finalize the deal.
• The NTA requirement currently mandates the company to have at least $5,000,001 in net tangible assets upon consummation of a business combination.
• Removing this requirement aims to provide the company with more flexibility and avoid being subject to penny stock rules.
• Stockholders can elect to redeem their shares for approximately $11.15 per share based on the trust account balance as of October 23, 2024.
• The board unanimously recommends voting in favor of the extension and NTA requirement amendment proposals.
• If the extension amendment proposal is not approved, the company will liquidate and the warrants and rights will expire worthless.

Sentiment

Score: 6

Explanation: The document is neutral to slightly positive. While it highlights the need for an extension and potential risks, it also emphasizes the board's recommendation to approve the proposals and the potential benefits of completing the business combination.

Positives

• The extension provides additional time to complete the business combination with OSR Holdings Co., Ltd.
• Removing the NTA requirement offers greater flexibility in pursuing a business combination and avoiding penny stock rules.
• Stockholders have the option to redeem shares at a price potentially higher than the current market value.
• The board of directors unanimously recommends voting for the extension and NTA requirement amendment proposals.

Negatives

• Significant redemptions could reduce the amount in the trust account, potentially requiring the company to seek additional funding.
• If the extension is not approved, the company will liquidate, and warrants and rights will expire worthless.
• There is no guarantee that a business combination will be completed even with the extension.
• The Sponsor may have a conflict of interest due to their investment in the company and affiliation with OSR Holdings Co., Ltd.

Risks

• Failure to complete the business combination by the extended deadline will result in liquidation.
• Significant redemptions could leave insufficient cash to consummate a business combination on acceptable terms.
• The company is currently not in compliance with the Nasdaq continued listing requirements.
• The company may be subject to a 1% U.S. federal excise tax on share redemptions.
• The proposed business combination may be subject to U.S. foreign investment regulations and review by a U.S. government entity such as the Committee on Foreign Investment in the United States (CFIUS), and ultimately prohibited.

Future Outlook

The company intends to continue seeking a business combination with OSR Holdings Co., Ltd. and will work towards completing the transaction by the extended deadline of February 14, 2025, if the extension amendment proposal is approved.

Management Comments

• The Board, including the M&A Committee, currently believes that there will not be sufficient time before November 14, 2024 to complete an initial business combination.
• Our Board has determined that the Extension is necessary in order to be able to consummate an initial business combination and believes that it is in the best interests of our stockholders to extend the date by which the Company must consummate an initial business combination to the Extended Date in order to provide our stockholders with the opportunity to participate in the prospective initial business combination.

Industry Context

This announcement is typical for special purpose acquisition companies (SPACs) nearing their deadline to complete a business combination. Seeking extensions and modifying charter requirements are common strategies to provide more time and flexibility in deal-making.

Comparison to Industry Standards

• Many SPACs, such as Gores Metropoulos II, Inc. and Churchill Capital Corp IV, have sought extensions to complete their business combinations, indicating a common challenge in the SPAC market.
• The proposed redemption price of approximately $11.15 per share is comparable to redemption prices offered by other SPACs seeking extensions, reflecting the pro rata share of the trust account.
• Removing the NTA requirement is a strategic move similar to those made by other SPACs facing potential redemptions that could jeopardize their ability to meet minimum asset thresholds, such as CF Acquisition Corp. VI.

Related Party Transactions

• The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below (i) $10.175 per public share or (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.175 per share due to reductions in the value of the trust assets, less taxes payable, provided that any such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable), nor will it apply to any claims under our indemnity of the underwriters of the Companys initial public offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended.
• On February 9, 2024, the Company issued an unsecured promissory note (the First JCW Promissory Note) in the principal amount of $75,000 to Jun Chul Whang, a member of the Companys Board.
• On April 8, 2024 and April 17, 2024, the Company issued unsecured promissory notes to Sponsor in the aggregate principal amount of $1,250,000 (the April Sponsor Notes).
• On May 14, 2024, the Company issued an unsecured promissory note to the Sponsor (the May Sponsor Note) in the principal amount of $140,000.
• On July 11, 2024, the Company issued to the Sponsor an unsecured promissory note (the July Sponsor Note and together with the April Sponsor Notes and the May Sponsor Note, the Sponsor Notes) in the principal amount of $300,000 to the Sponsor.
• On October 10, 2024, the Company issued an unsecured promissory note to Jun Chul Whang, a member of the Companys Board (the Second JCW Promissory Note) in the principal amount of $40,000 to Mr. Whang for its receipt of $40,000 to fund working capital and other expenses of the Company.
• On October 25, 2024, the Company advanced a loan to OSR Holdings Co., Ltd. (OSR Holdings) in the amount of $300,000 evidenced by a promissory note (the OSR Holdings Promissory Note) that bears interest at a rate of 3.96% per annum, compound semiannually, and is due on October 25, 2025.

Stakeholder Impact

• Stockholders have the opportunity to redeem their shares for cash.
• The extension provides an opportunity for stockholders to participate in a potential business combination.
• If the extension is not approved, stockholders will receive a pro rata share of the trust account, but warrants and rights will expire worthless.
• The Sponsor and insiders have interests that may differ from those of public stockholders.

Next Steps

• Stockholders will vote on the extension amendment proposal, the NTA requirement amendment proposal, the director election proposal, and the adjournment proposal at the annual meeting on November 12, 2024.
• If the extension amendment proposal is approved, the company will file an amendment to the charter and continue to seek a business combination by February 14, 2025.

Key Dates

Keywords

business combination, extension, redemption, NTA requirement, SPAC, liquidation, proxy statement, OSR Holdings, amendment, stockholders