425: Integrated Wellness Acquisition Corp Announces Business Combination Agreement with Btab Ecommerce Enterprises

Integrated Wellness Acquisition Corp (IWAC) has entered into a definitive Business Combination Agreement with Btab Ecommerce Enterprises, Inc., paving the way for Btab to become a publicly listed company.

Summary

• Integrated Wellness Acquisition Corp (IWAC) has signed a Business Combination Agreement with Btab Ecommerce Enterprises, Inc.
• The merger will result in Btab becoming a wholly-owned subsidiary of IWAC, with IWAC expected to be renamed Btab Ecommerce Holdings, Inc.
• Prior to the merger, IWAC will convert its Class B ordinary shares into Class A ordinary shares and domesticate as a Delaware corporation.
• Btab will amend its articles of incorporation to create a new class of voting common stock with 10,000 votes per share (Btab Class V Shares).
• Binson Lau, the CEO of Btab and Chairman of IWAC, will exchange his Btab preferred stock and a portion of his common stock for 100,000 Btab Class V Shares.
• The transaction consideration is valued at $250,000,000, to be paid by IWAC issuing 25,000,000 new shares of common stock to Btab shareholders.
• This consists of 24,900,000 IWAC Class A Common Shares and 100,000 IWAC Class V Common Shares, each valued at $10.00 per share.
• IWAC will adopt an equity incentive plan, reserving 20% of IWAC's post-closing fully diluted equity for grants.
• The agreement includes customary exclusivity restrictions for both IWAC and Btab, preventing them from soliciting alternative acquisition proposals.
• Btab is required to deliver PCAOB audited financial statements for the fiscal year ended December 31, 2023, and auditor-reviewed financial statements for the quarter ended March 31, 2024, within 60 days.
• The deal is subject to customary closing conditions, including regulatory approvals, shareholder approvals, and IWAC having at least $5,000,001 of net tangible assets after the merger.
• The Business Combination Agreement may be terminated under certain circumstances, including mutual consent, breach of representations, warranties, or covenants, or failure to consummate the merger by IWAC's business combination deadline.
• Concurrently with the execution of the Business Combination Agreement, the Sponsor, IWAC, Btab, and certain other IWAC Class B shareholders will enter into a letter agreement.
• Significant Company Shareholders have delivered shareholder support agreements to IWAC.
• IWAC shall enter into lock-up agreements with each Significant Company Shareholder.
• IWAC intends to file a Registration Statement on Form S-4 with the SEC, including a prospectus and proxy statement.
• The transaction is expected to qualify as a reorganization within the meaning of Section 368 of the Code.

Sentiment

Score: 7

Explanation: The document is a formal announcement of a business combination agreement. The sentiment is neutral to positive, reflecting the potential benefits of the merger for both companies. The score reflects the potential upside but also acknowledges the inherent risks and uncertainties associated with such transactions.

Positives

• Btab will gain access to public markets and capital through the merger.
• IWAC shareholders will participate in the potential growth of Btab's business.
• The transaction is structured as a stock-for-stock deal, minimizing immediate cash outlay.
• Lock-up agreements provide stability and confidence in the long-term prospects of the combined company.
• The equity incentive plan aligns management's interests with those of shareholders.

Negatives

• The deal is subject to shareholder approval, and there is a risk that it may not be obtained.
• Regulatory approvals are required, and there is a risk that they may be delayed or denied.
• IWAC shareholders may redeem their shares, reducing the cash available to the combined company.
• The market price of IWAC's shares may be affected by the announcement or pendency of the transaction.
• Btab's financial statements must be audited to PCAOB standards, which may require additional time and expense.

Risks

• The proposed Transactions may not be completed in a timely manner or at all, which may adversely affect the price of IWAC's securities.
• The proposed Transactions may not be completed by IWAC's initial business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by IWAC.
• The failure to satisfy the conditions to the consummation of the Transactions, including the approval of the Merger Agreement by the shareholders of IWAC.
• The occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement.
• The failure to achieve the minimum amount of cash available following any redemptions by IWAC's shareholders.
• Redemptions exceeding a maximum threshold or the failure to meet the New York Stock Exchange's initial listing standards in connection with the consummation of the contemplated Transactions.
• The effect of the announcement or pendency of the Transactions on Btab's business relationships, operating results, and business generally.
• Risks that the proposed Transactions disrupts current plans and operations of Btab.
• The outcome of any legal proceedings that may be instituted against Btab or against IWAC related to the Merger Agreement or the proposed Transactions.
• Changes in the markets in which Btab competes, including with respect to its competitive landscape, technology evolution or regulatory changes.
• Changes in domestic and global general economic conditions.
• Risk that Btab may not be able to execute its growth strategies.
• Risk that Btab may not be able to develop and maintain effective internal controls.
• Costs related to the Transactions and the failure to realize anticipated benefits of the Transactions or to realize estimated pro forma results and underlying assumptions, including with respect to estimated shareholder redemptions.
• The ability to recognize the anticipated benefits of the proposed Transactions and to achieve its commercialization and development plans, and identify and realize additional opportunities, which may be affected by, among other things, competition, the ability of Btab to grow and manage growth economically and hire and retain key employees.
• Btab's limited operating history, its limited financial resources, domestic or global economic conditions, activities of competitors, and the presence of new or additional competition, and conditions of equity markets.

Future Outlook

The document contains forward-looking statements regarding the anticipated benefits and timing of the transaction, future financial condition and performance of Btab and the combined company, and expected financial impacts of the transaction.

Industry Context

The announcement reflects the ongoing trend of SPACs merging with private companies to bring them to the public market. The focus on e-commerce aligns with the continued growth and investor interest in the online retail sector.

Comparison to Industry Standards

• Comparable companies in the e-commerce space that have gone public via SPAC mergers include companies such as BarkBox (through a merger with Northern Star Acquisition Corp) and Enjoy Technology (through a merger with Marquee Raine Acquisition Corp).
• These transactions often involve similar structures, including stock-based consideration, earn-out provisions, and lock-up agreements for key shareholders.
• The success of these mergers depends on the target company's ability to execute its growth strategy and achieve its financial projections.

Related Party Transactions

• Binson Lau, the CEO of Btab and Chairman of IWAC, will exchange his Btab preferred stock and a portion of his common stock for 100,000 Btab Class V Shares.

Stakeholder Impact

• Shareholders of IWAC will have the opportunity to participate in the potential growth of Btab's business.
• Employees of Btab may benefit from the increased resources and opportunities available as a public company.
• Customers of Btab may see improvements in products and services as a result of the merger.
• Suppliers and other business partners of Btab may experience increased stability and growth opportunities.

Next Steps

• IWAC and Btab will prepare and file a Registration Statement on Form S-4 with the SEC.
• IWAC will hold a shareholder meeting to vote on the proposed transaction.
• Btab will obtain the Shareholder Support Agreements and the written consent of its shareholders.
• The parties will work to satisfy the closing conditions and complete the merger.

Key Dates